Public sector contractors, including voluntary organisations, should be obliged to disclose how much funding they receive from government contracts to provide public services such as the Work Programme, new research says.
A report published today by the Institute for Government, Making Public Service Markets Work: professionalising government’s approach to commissioning and market stewardship, calls for government to reform the markets for public service delivery contracts because it says Whitehall lacks the expertise to design and manage complex programmes effectively.
It looks at four services that are reliant on markets to deliver them: employment services (the Work Programme), care for older people, schools and probation services.
The report says the government should increase the transparency of its public services contracts through measures such as publishing information about forthcoming government contracts online.
It says the government contracts should also oblige all providers of public services, including voluntary organisations, to publish details of "the funding they receive from government, their performance against contractual obligations, the suppliers to whom they subcontract services, the value of these contracts and, where practical, their performance user satisfaction levels".
Some charities complained last year that some Work Programme contracts prevented them from talking publicly about the programme without approval from the Department for Work and Pensions.
Nehal Panchamia, a researcher at the Institute for Government and one of the authors of the report, said that more transparency about services such as the Work Programme would help the DWP identify whether well-performing subcontractors were being forced to leave the service.
"The reason we want more transparency at a subcontractor level is that the DWP does not appear to have any idea of which subcontractors are under financial strain, even if they are not underperforming," she said.
The report also addresses issues within the public services market that are affecting the voluntary sector, such as "creaming and parking", where the main contractors pick up claimants that are easy to help and send the more complex cases elsewhere.
The report highlights the difficulties faced by some voluntary sector organisations taking part in the Work Programme.
"Some of those who could enter as specialist subcontractors have come under severe financial strain," it says. "As a result, some high-capability voluntary and community sector organisations are voluntarily choosing to leave the market, such as St Mungo’s, a homelessness charity.
"If this trend continues, there is a risk that the Work Programme could lose the diverse and responsive supply chains that the hardest-to-help jobseekers rely on."
Panchamia said the report also emphasised the importance of streamlining the current procurement process to make it easier for smaller organisations to bid for public service contracts by, for example, using standardised expression of interest forms.