Hostname: page-component-586b7cd67f-r5fsc Total loading time: 0 Render date: 2024-11-28T16:20:06.407Z Has data issue: false hasContentIssue false
  • English
  • Français

Re-examining British Welfare-to-Work Contracting using a Transaction Cost Perspective

Published online by Cambridge University Press:  18 May 2016

HAYLEY BENNETT
HAYLEY BENNETT*
Affiliation:
Politics and IR, University of Edinburgh, 4.02, 4f1, 18 Buccleuch Place, Edinburgh EH8 9LN, Scotland. email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This article critically reflects on the administration of activation services in the UK. It describes the welfare-to-work quasi-market and focuses on the impact of 2008 commissioning reforms that advocated amalgamating small contracts into larger ‘lots’, creating a top tier of prime providers to manage subcontractors, and increasing outcome-based funding. Drawing on transaction cost theory and empirical case study research, it is demonstrated that these changes led to an increase in a range of activities and costs for competing service providers that undermine government rhetoric of choice and efficiency. This article adds to the existing literature on welfare-to-work contracting by demonstrating the difficulties some organisations face in the context of welfare markets and questioning public service out-sourcing processes. It concludes by reflecting on the implications for future market-based social policy reforms.

Type
Articles
Information
Journal of Social Policy , Volume 46 , Issue 1 , January 2017 , pp. 129 - 148
Copyright
Copyright © Cambridge University Press 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Armstrong, D., Byrne, Y., Cummings, C. and Gallen, B. (2010), The Commissioning Strategy: Provider survey on early implementation. Research Report 704, London: DWP Google Scholar
Bennett, H. (2011), The demise of the third sector? Social and market legitimacy in the UK welfare-to-work industry, Paper given at the 7th International Critical Management Studies Conference, University of Naples, Italy, 4–6 July.Google Scholar
Bennett, H. (2013), The marketisation of UK employment programmes: the impact on a third sector organisation. PhD thesis, University of Edinburgh.Google Scholar
Bredgaard, T. and Larsen, F. (2008), Quasi-markets in employment policy: do they deliver on promises? Social Policy and Society, 7:3, 341–352.Google Scholar
Carter, E. and Whitworth, A. (2015), Creaming and Parking in Quasi-marketised welfare-to-work schemes: Designed out of or designed in to the UK Work Programme? Journal of Social Policy, 44:2, 277–296 CrossRefGoogle ScholarPubMed
Considine, M. (2001), Enterprising states: The public management of welfare-to-work, Cambridge: Cambridge University Press.Google Scholar
Crouch, C. (2011), The strange non-death of neo-liberalism. Cambridge: Polity Press.Google Scholar
Department for Work and Pensions (DWP) (2006), A New Deal for Welfare: Empowering People to Work. Green Paper, Cm 6730, Norwich: The Stationery Office.Google Scholar
Department for Work and Pensions (DWP) (2007), Reducing Dependency, Increasing Opportunity: Options for the Future of Welfare-to-Work, Norwich: The Stationery Office.Google Scholar
Department for Work and Pensions (DWP) (2008a), Commissioning Strategy. Cm 7330, Norwich: The Stationery Office.Google Scholar
Department for Work and Pensions (DWP) (2008b), FND phase one ITT, London: DWP.Google Scholar
Department for Work and Pensions (DWP) (2010a), Framework for the Provision of Employment Related Support Services. Specification of the Commercial Requirement. http://www.dwp.gov.uk/docs/framework-specification.pdf (Accessed 30.05.11)Google Scholar
Department for Work and Pensions (DWP) (2010b), Work Programme ITT London: DWP.Google Scholar
Department for Work and Pensions (DWP) (2011a), The Work Programme London: DWP.Google Scholar
Department for Work and Pensions (DWP) (2011b), Framework for the Provision of Employment Related Support Services. London: DWP.Google Scholar
Department for Work and Pensions (DWP) (2011c), Work Programme contract award data. London: DWP.Google Scholar
Department for Work and Pensions (DWP) (2012a), Work Programme provider payment schedule http://www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services/provider-guidance/work-programme-provider.shtml (Accessed 14.09.12.)Google Scholar
Department for Work and Pensions (DWP) (2012b), Merlin Standard http://www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services/merlin-standard/ (Accessed 14.09.12.)Google Scholar
Farnsworth, K. (2006), Capital to the Rescue? New Labour's Business Solutions to Old Welfare Problems, Critical Social Policy 26; 4, 817–42.Google Scholar
Farnsworth, K. and Holden, C. (2006), The Business-Social Policy Nexus: Corporate Power and Corporate Inputs into Social Policy, Journal of Social Policy, 35: 3, 473–494.Google Scholar
Farnsworth, K. (2013), Bringing Corporate Welfare In, Journal of Social Policy, 42: 1, 1–22.Google Scholar
Finn, D. (2009), The Welfare Market and the Flexible New Deal: Lessons from other countries, Local Economy, 24: 1, 51–58.CrossRefGoogle Scholar
Grayling, C. (2011), How to tackle unemployment – a speech to the Oxford and Cambridge Club, Tuesday 17 May 2011. London, DWP.Google Scholar
Grover, C. (2009), Privatizing employment services in Britain Critical Social Policy, 29: 3, 487–509.CrossRefGoogle Scholar
Heins, E. and Bennett, H. (2016), Best of both worlds’? A comparison of third sector providers in health care and welfare-to-work markets in Britain. Social Policy and Administration, 50:1, 39–58.Google Scholar
HOC (2014a), Transforming contract management, Twenty-third Report of Session 2014–15 Report, together with the formal minutes relating to the report, House of Commons Committee of Public Accounts HC 585 [Incorporating HC 586], London: The Stationery Office Limited.Google Scholar
HOC (2014b), The Work Programme Twenty –first Report of Session 2014 –15. Report, together with the formal minutes relating to the report, Committee of Public Accounts HC 457, London: The Stationery Office Limited.Google Scholar
Krippner, G.R. (2012), Capitalizing on crisis. The political origins of the rise of finance, London: Harvard University Press.Google Scholar
Le Grand, J. (1991), Quasi-markets and Social Policy. The Economic Journal, 101:408, 1256–1267.CrossRefGoogle Scholar
Le Grand, J and Bartlett, W. (1993), Quasi-markets and Social Policy. Basingstoke: Macmillan Press.Google Scholar
Lindsay, C., McQuaid, R.W. and Dutton, M. (2007), New approaches to employability in the UK: combining ‘human capital development’ and ‘work first’ strategies? Journal of Social Policy, 36:4, 539–560 Google Scholar
NAO (2011), Reducing costs in the Department for Work and Pensions by the Comptroller and Auditor General HC 1089 Session 2010–2011, London, The Stationery Office.Google Scholar
NAO (2012a), The introduction of the Work Programme Report by the Comptroller and Auditor General HC 1701 Session 2010–201224 January 2012, London, The Stationery Office.Google Scholar
NAO (2012b), Preventing fraud in contracted employment programmes. Report by the Comptroller and Auditor General HC 90 Session 2012–2013 16 May 2012, London, The Stationery Office.Google Scholar
Purnell, J. (2008), Introduction to Commissioning Strategy. http://www.dwp.gov.uk/previous-administration-news/press-releases/2008/february-2008/emp063-280208.shtml (Accessed 22.9.12)Google Scholar
Rees, J., Taylor, R. and Damm, C. (2013), Does Sector Matter: The Role of the Third Sector in the Work Programme, Third Sector Research Centre Working Paper No. 92, University of Birmingham: Third Sector Research Centre.Google Scholar
Rees, J, Whitworth, A and Carter, E. (2014), ‘Support for all in the UK Work Programme? Differential payments, same old problem,’ Social Policy and Administration, 48: 2, 221–239.Google Scholar
Sayer, A. (2014), Why We Can't Afford The Rich, Bristol: The Policy Press.Google Scholar
Sol, E. and Westerveld, M. (Eds). (2005), Contractualism in Employment Services, A New Form of Welfare State Governance, Netherlands: Kluwer Law International.Google Scholar
Stake, R. (1995), The Art of Case Study Research. California: Sage Google Scholar
Streek, W. (2014), Buying time, the delayed crisis of democratic capitalism. London, Verso.Google Scholar
Struyven, L. and Steurs, G. (2005), ‘Design and redesign of a quasi-market for the reintegration of jobseekers: empirical evidence from Australia and the Netherlands’ Journal of European Social Policy, 15: 3, 211–229.Google Scholar
Taylor-Gooby, P. (1999), ‘Markets and Motives Trust and Egoism in Welfare Markets’ Journal of Social Policy, 28: 1, 97–114 Google Scholar
Van Berkel, R. (2009), ‘The Provision of Income Protection and Activation Services for the Unemployed in ‘Active’ Welfare States. An International Comparison’ Journal of Social Policy, 39:1, 17–34 Google Scholar
Williamson, O. E. (1975), Markets and Hierarchies, New York, Free Press.Google Scholar
Williamson, O. E. (1981), The economics of organisation: The transaction cost approach, American Journal of Sociology, 87:3, 538–577.Google Scholar
WPC (2012), ‘The Work Programme’ Monday 19 March 2012 (Uncorrected transcript) http://www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/uc1903/uc190301.htm (Accessed 18.09.12)Google Scholar