33390 wdi] voice & choice cover-1 - brotherhood of st

June 2008

Choice and voice in welfare reform

www.workdirections.co.ukwww.ingeus.com

33390 WDI] Voice & Choice Cover-1 11/6/08 10:48

WorkDirections I Choice and voice in welfare reform

Choice and voice in welfare reformDr May LamIngeus Centre for Policy and ResearchJune 2008

Overall, performance management is not a long-term solution. What is needed instead is asystem with incentives for reform embedded within it. These incentives should come fromempowering service users. One way of doing this is to strengthen what’s called in the jargon‘voice’. ‘Voice’ mechanisms allow users to express their views directly with providers, eitherinformally or through more formal ways, such as complaints procedures, becoming a parentgovernor, patient and public forums, joining a foundation trust board, and so on.

These forms of voice have their place. But, fundamentally, they are not the answer. Partly thisis because they are often cumbersome to operate, but principally it is because they are largelyimpotent in the absence of choice, or power of ‘exit’. Only if the dissatisfied can go elsewhereis there a real incentive to improve. Choice, in other words, gives power to voice.

Julian Le Grand, 2006 1

1 - Julian Le Grand, ‘A better class of choice’, Public Finance, 31st March 2006

33390 WDI] Voice & Choice** 11/6/08 10:49 Page 1

1. Introduction p 5

2. Public policy signposts to choice and voice p 7

3. Choice and voice in the case of welfare reform p 9

4. Market research techniques and concepts p 15Focus groups p 15Market segmentation p 15Customer satisfaction ratings p 16Customer loyalty and return visits p 18Brand recognition p 19Social marketing p 19

5. Customer voice case studies p 20Focus groups at WorkDirections UK p 20Attitudinal segmentation - Australian Government p 21Customer satisfaction survey - WorkDirections UK p 22Value Creation Workshops - Australia p 24

6. Customer choice case studies p 25Employment Zones choice of provider - UK p 25Job Network choice of provider - Australia p 28Job Network Job Seeker Account - Australia p 29Work for the Dole choice of work experience placement - Australia p 31Individual Learning Accounts - UK p 32

7. Choice, voice and exit: who, when and why p 35

8. The future of UK welfare-to-work services p 471. Service design p 482. Information system support p 493. Contracting strategy p 504. Research and evaluation p 52

Appendix 1: WorkDirections UK client survey p 54

Appendix 2: WorkDirections UK focus group findings p 57

WorkDirections and the Ingeus Group p 58

Contents



Executive summary

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As the UK Government seeks to outsource welfare-to-work service provision more comprehensively, it facessome serious challenges in engaging and supporting a diverse range of long-term benefits claimants. In thiscontext, there is a powerful case to be made for introducing more user choice and voice in welfare-to-workservices: to improve service design, performance measurement and contractor accountability.

This paper argues that much can be learned from the intended beneficiaries of welfare-to-work servicesthemselves. During 2006-2007, WorkDirections undertook a series of focus groups with a wide range ofclients and developed a customer survey as part of a company-wide programme to enhance its customerfeedback system. This coincided with the introduction of choice, in April 2007, for the four multipleprovider Employment Zones in which the company operates. The wealth of practical learning that arose isincorporated into this paper.

The paper starts by sketching the general trend in public sector management to enhance the role of usersas 'co-producers', partners in designing services that would work best for them. Acknowledging that therights and responsibilities regime and the threat of sanctions might affect the reliability of welfare-to-workcustomers' views, the discussion considers some market research concepts and techniques relevant towelfare-to-work.

Case studies of applied research into customer views from Australia and the UK, together withWorkDirections research, show how customer populations can be defined and their views gathered in variousways. Learning from such studies reveals, for example, the need for richer information about people's pasthistory and workforce orientation before categories such as 'work avoiders' can be deployed and acted upon.The case studies also point to significant potential to explore a range of satisfaction factors in connectionwith employment outcomes.

The paper then considers some case studies of how customer choice has been incorporated into variousprogrammes in Australia and the UK, and how policy intentions to ensure choice have played out in deliveryexperience. These case studies and other sources inform a longer discussion of the ethical and efficiencyarguments for more choice and voice, and the practical implications of delivering it to users of welfare-to-work services.

In light of compelling evidence that people claiming benefits are a critical source of information about theservices that will work best for them, the paper concludes by making a series of recommendations: in theareas of service design, contracting strategy, a research agenda, and the nature of the information systemthat could support these.


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1. Introduction

Contemporary public policy is characterised by programmes to cultivate among individuals practices andcommitments to taking personal responsibility for an ever wider set of risks that they may face…Perri 6, 20062

The complexity of clients’ perceptions around choice is one of the key messages to emerge from reportedcustomer experiences.Multiple provider Employment Zones review of evidence, 20073

How can we draw a balance between ‘universal’ and ‘individual’ positions? This is the crucial task facingmodern public services.National Consumer Council, 20074

At their most basic, public services are intended to deliver various kinds of social or economic ‘good’ withincertain funding limits. Decisions about what forms such good should take have in the past largely been madein the centre and from the top, to determine where, how, when, and by whom services will be delivered.

More recently in the UK, policy makers have begun to pay serious attention to the devolution of funding anddecision-making power to individuals and communities, recognising that the identification of needs andplanning for delivery is in many cases managed more efficiently closer to the locus of intended benefits. Thismore user-focused perspective is consistent with the privatisation of public services, sharpening the recognitionof citizens as consumers and drawing attention to their potential to improve the efficiency of services by takinga more active part in defining their needs, expressing preferences, and making choices.

In the case of welfare-to-work services, those aspirations have considerable and unique resonance. Whenemployment and the income and status it brings can so powerfully determine social and economic position andwell-being, it is not surprising that most people on benefits are intensely engaged with their service experienceand have many views and opinions about it, whether they are mandated or voluntary clients, and whether theservice is good or poor. Even those reluctant to engage hold critical information about how the Government canbest meet its aspiration to have them join the labour force.

This policy paper is written at a time when the Government is designing a comprehensive system of welfare-to-work services that will require all people on benefits, assessed as having the capacity to work, to be broughtinto a system of mandated active job search. That system will rationalise the roles and interface of JobcentrePlus, an Adult Advancement and Careers Service, skills funding, and job brokerage contracted to private,voluntary and public sector organisations. The greatest challenge in designing such a system is to match eachindividual – at the right time – to service interventions that will best achieve long-term employment andearnings.

2 - Perri 6, ‘Just who are you asking to show more respect?’, Conference paper, 28th APPAM Research Conference, November 2006.3 - Rita Griffiths and Stuart Durkin, Synthesising the evidence on Employment Zones, Research Report No 449, Department for Work and

Pensions, 2007, p.34.4 - Richard Simmons, Johnston Birchall, and Alan Prout, Our say: User voice and public service culture, National Consumer Council, July 2007, p.3.



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In that context, this paper is intended to review some of the ways that choice and voice have been available inwelfare-to-work programmes to date, both in the UK and in other countries. Some are directly relevant towelfare-to-work programme design, others only potentially so. The paper does not attempt to propose ‘a’recommended system for implementing service choices and harvesting customer feedback, given that there arevarious contracting options currently in play for the Department for Work and Pensions (DWP) at the time ofwriting this paper. Recognising the range of different possibilities for configuring the market, this paper isintended to inform and support DWP’s strategic planning for contracting and performance measurement ratherthan to promote a particular approach.

There is much to be gained from listening more attentively to welfare-to-work service users5, and frombringing them into sharper focus in the decision-making process. A series of focus groups during 2006 and2007 with WorkDirections Employment Zone and New Deal for Disabled People clients shows vividly andinspiringly how good service is appreciated, how it can change people’s lives, and how the service can bemade more responsive. But resource limits for Jobcentre Plus and for contracted services, and the nature ofthe labour market, make it obvious that the system cannot accommodate every kind of option for choice andvoice. The two sharpest reminders of this are mandated job search requirements and sanctions, and formany job seekers the lack of choice in terms of jobs at higher than minimum wages.

In other policy papers, WorkDirections has advocated terms of performance measurement and contractingthat will promote longer-term employment retention and earnings growth. This review of choice and voiceoptions is both informed and sobered by the reality that the mandated requirement to look for work can giverise to negative feelings, and that for many the start of any workforce engagement, or formalisedengagement, is likely to be in minimum wage jobs. For this reason amongst others, some customers willavoid ‘the system’ to varying degrees, no matter how keenly they are pursued by a customer-focusedJobcentre Plus.

Focus group discussions with WorkDirections clients reveal that limited wages prospects on one hand, andconditional benefit payments on the other, confer immense importance on the ability of the system both tolisten more sensitively and pursue frank and open exchange. This relies on sufficient time with a skilledadvisor who can build trust and mutual respect, and lays the best ground from which to explore and identifypathways towards employment that will be right for each individual. This concept of ‘the customer’ and hisor her choices and preferences recognises the possibility of choosing and acting differently for immediate orfuture benefit. The Government’s intention to contract for longer-term outcomes will be served by thoseways of working with clients.

5 - The terms ‘customer’ and ‘client’ will be used variously throughout this paper. Though attempts have been made to use the most appropriate term in the context of the discussion, no term is entirely adequate.

Introduction


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One can hit the target but miss the point.Julian Le Grand, 20066

The trick is to measure performance in ways that illuminate the quality of the service experience ratherthan focusing solely on operational performance. Organisations need to measure what users value, as wellas what organisations and service systems value. Sophia Parker and Joe Heapy, 20067

In his review of the past 10 years of Government achievements and the challenges to be met in future,Anthony Giddens put the case for market competition bluntly: ‘Social democrats these days have to be moremarket-friendly, and accept that capitalism has proved vastly more effective in raising living standards than anyversion of socialism or communism.’8 Political parties on both sides have sought ways to reduce social andeconomic inequality by exploiting market forces, not just through the achievement of economic growth overall,but by promoting competition in the delivery of public services, most notably in education, health and socialcare. This is consistent with a view of the user of public services as an active agent in the service process andits outcomes.

Competition – the systemThough there is considerable debate about the options and strategies for the Government about how best toimplement competition and choice in the range of public services to which they might apply, it is possible tocharacterise this broad public policy consensus in terms of the following objectives:9

1. The pursuit of increased accountability and service quality for public service users, and the promotion of opportunities to engage them.

2. An intention to devolve decision-making power away from the centre and out to localities and individualcitizens.

3. The promotion of choice through contracting alternative service providers from the private and voluntary sectors.

4. New forms of cost-benefit analysis for investment in public services10, with greater spending flexibility for system users and providers and financial reporting systems to support it.11

5. Recognition that performance definitions and targets should be designed to avoid perverse outcomes; alsothe need to balance or supplement targets or league tables with additional ways to assign value.

Co-production – the system userThese concepts in service design describe a narrative that engages and makes sense to the service user.1. Users of public services encounter them as one part of a broader journey, which will have implications for

the timing of intervention points, the relevance and appropriateness of information to be provided over time, and service coordination and delivery across agencies.

6 - Julian Le Grand, ‘A better class of choice’, Public Finance, 31st March 2006.7 - Sophia Parker and Joe Heapy, Journeys to the interface: How public service design can connect users to reform, Demos, 2006.8 - Anthony Giddens, Over to you, Mr Brown, 2007, p.4.9 - See, for example, Patrick Diamond (ed.) Public Matters: The renewal of the public realm, 2007.10 - David Freud, Reducing dependency, increasing opportunity: options for the future of welfare to work, 2007. This report recommends that the

Government should make a larger investment in longer-term employment outcomes by using funds that otherwise would have been used to pay benefits.

11 - See, for example, Charles Leadbeater and Hilary Cottam, ‘The user-generated state: Public Services 2.0’ in Patrick Diamond (ed.) Public Matters:The renewal of the public realm, 2007.

2. Public policy signposts to choice and voice



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2. The journey of the service user can usefully be reviewed in terms of his or her touch points with the agency,which might involve engagement, information exchange, guidance, support and service delivery. This involves recognition of how the service user has a physical, phone or virtual encounter with the agency, and whether service delivery can or should occur face-to-face, on-site or by outreach, by phone, text message, or the internet, or through intermediaries or user communities.

3. Taking the perspective of the service user means considering how performance measures and associated targets can assign value to service users’ goals and aspirations as they define them. Some emerging work inthe UK is exploring how I-metrics, or my-metrics sharpen a focus on outcomes for the intended beneficiaries of services.

4. Just as information technology and the use of the internet has transformed retail and financial services, there is significant potential for the growing capabilities of applied information technology to record individual needs, track responses and monitor outcomes achieved by contracted public services.

You have to do as much as possible to manage getting into people’s shoes: psychologically, emotionally,physically…Alison Platt, head of BUPA Hospitals, 200612

12 -Sophia Parker and Joe Heapy, Journeys to the interface, 2006, p.18. BUPA has mapped its processes, technology and interventions to an end-to-end journey for its customers.

Public policy signposts to choice and voice


We all want to be in control of our own lives. So, that desire is always there. It can be overt or covertbut it’s still there, that you are in control of your life, not somebody dictating to you. Once you’ve takenthat decision, whether it works for you or not, it’s your responsibility and you are in a better position toaccept that as your responsibility.Southwark Employment Zone lone parent client, 2007

My friend told me [provider X] are not too good, then told me about this place. So, I asked [at JobcentrePlus] if I could come here and she said it’s up to the computer, it’s not up to me.London, multiple provider Employment Zone, 2006 (before choice of provider was introduced)

Customer experience will play an important part in the commissioning of provision… We will promotemore active customer involvement in our programmes, and their experience will be important in shapingour future programmes. DWP Commissioning Strategy interim report, November 2007

Contracted-out provision for welfare-to-work services is a large and growing market, worth around one billionpounds a year in 2008.13 Though Jobcentre Plus records and regularly reports its performance againstcustomer services targets, for contracted providers there is no common comprehensive system of collectingand reporting customer feedback information. Ofsted inspects the extent to which the contracted provisionmeets the learning and development needs of its customers, an emphasis not entirely reconciled to the‘work-first’ orientation of Employment Zones. In April 2007, the Department for Work and Pensionsintroduced choice of provider for the approximately 22,000 clients who start on the programme annually inthe six multiple provider Employment Zones. It is too early to say, however, whether market competitionbetween multiple providers or customer choice of provider improves employment outcomes.14

There have long been debates in welfare-to-work policy about the respective merits of hard and softoutcomes, with the means of achieving outcomes, including how customers feel about the service, or thedistance they travel towards employment, typically regarded as less important and valued information thanthe employment result. This is most notably and most understandably the case in defining the terms ofprovider payments.15

The current system of contracting and performance measurement in both Australia and the UK tends toemphasise the achievement of job outcomes that can be sustained for a minimum period, usually 13weeks. Typically, this is expressed in terms of the percentage of referred caseload placed into sustainedemployment. Emphasis on this success measure means that little is known about those not placed inemployment. More than 50% of those currently in Employment Zones do not achieve a sustainedemployment outcome, and for those in New Deal or Employment Zones who do, 50% are out of work again10 months later, according to a longitudinal survey.16

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3. Choice and voice in the case of welfare reform

13 - In work, better off: Next steps to full employment, Department for Work and Pensions, July 2007, p.60.14 - This figure is based on DWP monthly data reporting programme referrals and starts to providers of the Employment Zone programme in

multiple provider Zones.15 - Ingeus Centre for Policy and Research, Performance measures for welfare-to-work programmes, WorkDirections policy paper, 2007. This paper

discusses various kinds of performance measures and their uses in more detail.16 - Over a longer period, relatively few jobs in either Employment Zone or New Deal areas were sustained. Of participants who were in work at

the time of the first cohort survey, only half remained employed at the second stage approximately 10 months later. Rita Griffiths and Stuart Durkin, Synthesising the evidence on Employment Zones, 2007, p.24.



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While this ‘no-result’ group typically earns a place in evaluation reports under the heading ‘the harder tohelp’, and recommendations are made to look further into the multiple factors preventing workforceengagement, the current system of provider performance measurement does not include metrics that reflectcustomer experience, or other kinds of outcomes – good or bad – that might have been achieved throughtheir programme participation.17 What are providers doing for these groups?

Customer feedback information and other customer perspective reporting would be a vital source ofinformation about what worked and what did not, in terms of particular provision delivered to andexperienced by individuals, rather than in terms of evaluations which tend to attribute success to largerfeatures of overall programme design. The timely and thoughtful harvesting of customer feedback aboutcontracted provision might also provide opportunities to redress problems in a shorter time frame than ispossible with the programme evaluation commissioning and reporting cycle.

The Government and contracted providers could learn much from those who are still looking for work, andstill claiming benefits. In both improving short-term service provision and longer-term policy development,each client - especially ‘the other half’ who don’t get jobs - represents an opportunity for direct learningabout system failure or mismatched expectations in the rights and responsibilities contract.

Acknowledging the validity of maintaining the emphasis on payment by results, there is still considerablescope to revisit the designation of customer perspective information as ‘optional extra’ performanceinformation, based on:• Greater recognition of the sometimes perverse effects that can accompany rewards for ‘hard’ outcomes.18

• The need for a degree of regulation and quality standards that qualify providers for initial, continuing, orrenewed contracts.

• The potential of improved information technology systems and improved customer communications to monitor and report customer experience.

• The ability to incorporate ‘soft’ forms of performance information such as customer feedback into the conditions under which ‘hard’ employment outcomes are achieved and paid. This might mean, for example, using customer perspective performance metrics to establish the qualification for providers to receive referrals, make fee claims, or win more business, either through the award of greater market share or through customer choice.

It is possible to envisage a number of potential benefits for DWP, contracted providers, and the people they serve: • Both DWP and contracted providers would better understand how to meet clients’ needs and achieve

labour force attachment.• Clearer and more relevant definitions of good performance could arise, clarifying the terms of contracting

and contract management.• The extent to which providers are perceived by customers to meet their needs could assist decision-

making about awarding contracts or adjusting market share.• Discretionary spending and investment in skills would be better targeted. • Benefits claimants would experience a more engaging, seamless, user-friendly and accountable service.

17 - Recognising this, there is an aspiration in the star ratings model being developed by DWP for future star ratings to incorporate customer satisfaction with the service they have received. The current weighting for this is notionally set at 20%.

18 - For example, some providers have held over registration of programme starts to a subsequent month to improve job outcome-to-start ratios and thereby earn bonuses. Rita Griffiths and Stuart Durkin, Synthesising the evidence on Employment Zones, 2007, p.68.

Choice and voice in the case of welfare reform


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The unique nature of welfare-to-work services

When the Jobcentre first told me I had to go to an employment agency I was not impressed.Employment Zone client, Birmingham, 2006

I think them pushing me here was the kick up the bum that I needed. Even though at first they neverwent around it the right way.Employment Zone client, Brent, 2007

In a way, I’ve been forced to come here, I didn’t come on my own choice, the Jobcentre sent me here,basically said that I have to come here or they’re going to cut my benefits, so that’s the reason I’mreally in here, to be honest with you… My advisor is all right, she’s a nice woman, she is helping me asbest she can. In fact this place has helped me out a lot…Employment Zone client, Brent, 2007

Before I came I didn’t know anything about WorkDirections. So, it was something completely new forme. I was just told [at the Jobcentre] you are at this stage and this is what you have to do now. Employment Zone client, Southwark, 2006

Welfare-to-work is unique within public services. Most people using education and health services knowwhat to expect. People who are unwell know they want to get better; parents know why their children shouldattend school. In the case of welfare-to-work services, what people should be getting, what form it takes andhow it will help is not so immediately obvious. If people do not get an education or put off going to see thedoctor, the initial consequences will be borne largely by them. When welfare-to-work services fail, it is at amore obvious and immediate cost to the Government.

In that sense, there are two kinds of ‘customer’ for contracted welfare-to-work service provision: theGovernment who pays for the service, and service users. Though the language of service delivery uses theterms ‘client’ or ‘customer’, people who use the services – whether on a mandated or voluntary basis – donot fit the picture of the sovereign consumer. Essentially the difference lies in the Government policy ofmandating, with sanctions for non-attendance at interviews or non-participation in programmes. Theconcept of mandating implies a view about the capacity of customers to act in their own interests, intereststhat are not always consistent with the intentions of the state for them.

Welfare-to-work service design must therefore recognise and reconcile two notional types of service users.One is the ‘autonomous agent’: the person whose desire to work, capacity for longer-term goal setting, andself-direction fits with the state’s objective to reduce benefits dependency. The other is the ‘dependentclaimant’: someone who resists or undermines government interventions to connect him or her to work, andwhose behaviour and outlook warrants modification - to the point of requiring sanctions.19

Though these two notional service users can be discerned in policy debates and papers, in practice, programmeexperience indicates a subtle capacity for the customers to undergo shifts in attitude and motivation through aprocess of engagement with an advisor which emphasises choices and respects job aspirations.

19 - Each of these notional service types can be associated with a type of contracting model. The Australian Job Network system, with manyperformance process measures associated with monitoring attendance, reporting and sanctions, and strict controls on discretionary spending, implies a view of system users as ‘dependent claimants’. The UK Employment Zone contract terms, emphasising payment by results and greater flexibility in approaches to discretionary spend, indicates a contract oriented more towards ‘autonomous agents’.



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A 2007 review evaluating the evidence to date for multiple provider Employment Zones finds that there isimmense capacity to engage people in this way, and support them into work – even work they may notpreviously have considered.

The Employment Zone approach is based on the premise that, regardless of the content ofinterventions, the attitudes and motivations of customers, and in particular, securing their ‘buy in’, isparamount to their effectiveness. As customer aspirations are not rejected out of hand – indeed aresupported to a degree – customers often discern there to be more choice and less compulsion in thismodel to that of New Deal, and become more responsive and willing to consider alternative employmentroutes. The evidence thus suggests that choice and mandatory participation are not necessarily suchincompatible bedfellows as proponents of earlier prototype Employment Zones had perhaps assumed.Having their job aspirations taken seriously and not feeling compelled to accept work they do not wantare important differentiating features of the two approaches and a key factor in explanation ofcustomers’ greater reported satisfaction with Employment Zones compared with New Deal…

The complexity of clients’ perceptions around choice is thus one of the key messages to emerge fromreported customer experiences. Though the customer’s employment objective may undergo radicalchange during the time on the Zone, they still perceive, by and large, that Employment Zones allowthem to pursue employment goals of their own choosing. Somewhat paradoxically, this greater sense ofchoice was apparent even among mandatory customers directed to attend an EZ under the threat ofbenefit sanctions.DWP research report20

That finding is supported by WorkDirections’ experience and has significant implications for service designand performance measurement. These points are explored further in the concluding section of this paper.

The diagram that follows indicates the range of points in the current UK welfare-to-work system wherechoice and voice are relevant, or might be delivered. It is intended to recognise the roles and relationshipsof different stakeholders in the system, as well as key decision points where choice might be exercised. This map of opportunities will help to locate the range of case studies of market research techniques andpossible strategies to promote choice and voice that follow.

20 - Rita Griffiths and Stuart Durkin, Synthesising the evidence on Employment Zones, 2007, p.33-34.



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Policy challenges and questions1. There is not yet a well-articulated account in Australia or the UK of the range of choice and voice

mechanisms that could inform the emerging roll-out of contracted employment services, despite frequently stated aspirations to achieve innovation and flexibility.

2. There is a lack of research exploring possible connections between customer satisfaction, the exercise ofchoice, and the chances of achieving an employment outcome.

3. The design of meaningful measures of customer service experience will depend on whether the information can simultaneously serve such functions as:• Performance measurement, rating and allocating more business. • Informing customer choice.• Diagnosing unmet needs or identifying poor service, informing contract management and

performance improvement.• Informing programme evaluation alongside analyses of employment outcomes.

4. Could customer satisfaction metrics be more efficiently replaced simply by letting people vote with their feet in choosing or continuing to work with a particular provider?

5. How do choice and voice mesh more broadly, and what would be the implications – in terms of market share and fair systems for performance measurement if people favour providers to the point of significantly increasing their market share?

6. There are questions about whether the purchaser or the provider should generate the information about customer needs and experiences.

7. If increased flexibility and discretion is given to Jobcentre Plus and also contracted providers’ advisors (for example in the area of promoting skills development or in determining a rights and responsibilities contract) is this likely to result in the potential for more disputes and complaints?

8. With the potential of the system to involve a series of referral points and hand-offs, including those fromlead providers to sub-contractors, how can the success of the system as a whole be monitored, managed and reported? Does this need an independent body?



15

4. Market research techniques and concepts

One of the most startling features of working with the public sector is how little data exists on consumerneeds and behaviours. Deloitte’s Government and Public Sector Group, 200721

The attitude here at BUPA about customer research used to be that of an interested spectator – now weuse it to drive decisions. Alison Platt, head of BUPA Hospitals, 200622

Market research related to public services is complex. Public services are not developed in the space ofpossibility represented by the hypothetical open market, where needs can be matched with products for themutual benefit of buyers and sellers.

Focus groups

Focus groups are typically undertaken to explore and characterise opinions, perspectives, expectations, or experiences of a social group of some kind. Caution should be exercised in generalising from focus group discussions to wider groups or in making significant business decisions based on this source ofinformation alone.

A series of 13 WorkDirections focus groups was conducted between July 2006 and August 2007, in order to:1. Improve understanding of clients’ orientation to and engagement with WorkDirections in the broader

context of their encounters with Jobcentre Plus, experiences with other providers and programmes, and the policy context of voluntary or mandated participation.

2. Develop an understanding of services’ satisfaction factors to inform the development of a customer satisfaction survey.

3. Identify any common issues of concern or dissatisfaction that might exist.

Participants were very willing to express their views and provide feedback, and it is possible from the seriesof groups conducted to observe that the mandated/voluntary status of clients has no evident link to theirwillingness to provide feedback, though lone parents (voluntary clients) more frequently and moreemphatically characterise their service experiences as satisfactory.

Though many mandatory clients in focus groups reported that they had initially been unhappy about amandatory requirement to attend, with the threat of a financial sanction for non-compliance, by the time ofthe focus group those attitudes had in general changed to a more positive view overall (see p.25-27).

Market segmentation

Market segmentation is an attempt to recognise and address what Parker and Heapy call ‘the complexdimensions of need, belief and behaviour that shape peoples’ responses to service.’ 23 They identify threepossible approaches to segmentation relevant to public services. One is attitudinal segmentation, whichdistinguishes the values or beliefs of users with respect to a service. An attempt to segment the claimantpopulation in Australia in this way is reported on p.21.

21 - Deloitte’s Government and Public Sector Group, ‘United Kingdom: The delivery challenge for the next government: From targets to engagement’, May 2007.

22 - Parker and Heapy, Journeys to the interface, 2006, p.18.23 - Parker and Heapy, Journeys to the interface, 2006, p.21.



16

Behavioural segmentation groups the practical reasons people use a service and what they need from it, andjourney segmentation which maps a range of possible routes different users might take to a destinationaccording to their needs and circumstances.

The range of UK welfare-to-work programmes and contracts represents a notion of market segmentationwhich in retrospect seems unnecessary. The original New Deal programme was designed for 18 to 24-year-olds, but was adapted and extended to people aged over 25, lone parents, and even musicians. Asimilar case applied to Employment Zones, which have been extended from longer-term Jobseeker’sAllowance claimants to include lone parents and those aged 18 to 24.

Segmentation of provision according to a key claimant characteristic such as benefit type or age does notmake sense when clients manifest a variety of employment barriers not exclusive to a particular category.Programme design needs to ensure the capacity to address a mix of circumstances faced by eachindividual. Employment Zones institute the personal advisor as a kind of hub providing assistance,assessment and referral, with discretion and flexibility to arrange other provision as needed.

Customer segmentation to determine types of service needs or approaches is less relevant in this kind ofmodel, though segmentation will still be important for marketing and communications purposes, and fordetermination of fees to be paid and how to rate performance.

The personal advisor model represents a supply-side approach to employment, equipping individuals tocompete in the labour market. Though customer segmentation in that case is less warranted, it couldcertainly be applied to an employer-demand approach to provision, supporting aggregated business servicesto employers and improving the efficiency of client job search efforts.

Given that kind of service orientation, client groups could be usefully defined in terms of theirindustry/occupation goals, job requirements, or willingness to try for work known to be available. This wouldcorrespond with services aimed at pre-employment training and placement, the brokering of supply anddemand for part-time work, or specialised vacancy matching. This kind of industry/employer-oriented servicewas requested by some people participating in WorkDirections focus groups, who felt their job-search effortswould have been more efficient with such information and support.

Customer satisfaction ratings

The supermarket chain Tesco has five customer value metrics: the aisles are clear, I can get what Iwant, the prices are good, I don’t want to queue, the staff are great. These simple measures can informthe whole organisation, from the boardroom to the stockroom.Sophia Parker and Joe Heapy, 200624

This example invites consideration of what clear and simple measures might be found for welfare-to-workcontracted provision, and whether and how they might inform DWP and provider practices. Contractedmeasures of success for Employment Zones do not currently include customer satisfaction.

24 - Parker and Heapy, Journeys to the Interface, 2006, p.69. Though the differences between public services and supermarket shopping are well understood, the example is still helpful in illustrating clear measures of customer value.

Market research techniques and concepts


Customer expectations of

service

Previous experience

Word of mouth communication

Explicit service communication

Voluntary or mandatory participant

CHANGE OVER TIME

Labour market prospects

CHANGE OVER TIME

Implicit service communication*

Personal needsCHANGE OVER

TIME

17

Figure 2 - Public services: sources of customer expectation, applied to the case of welfare-to-work25

* ‘Implicit service communication’ refers to factors such as the physical appearance of buildings andstandards of facilities, which may lead customers to expect higher standards of services.

The UK market research company Ipsos MORI, which undertakes a considerable amount of public sectormarket research, added ‘values/beliefs’ and ‘views about Government’ to its account of influences onexpectations of public services.26 MORI notes that global assessments of public services tend to benegative, becoming more positive as more specific questions are asked about specific services.

To achieve greater relevance to the welfare-to-work context, MORI’s ‘values/beliefs’ and ‘views aboutGovernment’ have been replaced here (as shown) with more direct influences on of welfare-to-work services:people’s job aspirations and prospects, and the mandatory nature of the participation requirement, asidentified from WorkDirections’ client focus groups.

25 - Measuring and understanding customer satisfaction, A MORI review for the Prime Minister’s Office of Public Services Reform, 2002, p.8.The diagram has been differently labelled (as shown) for the purpose of this paper.

26 - Measuring and understanding customer satisfaction, 2002, p.8.

During 2006-2007, WorkDirections UK developed and trialled a customer feedback survey, discussedfurther on p.22. This project confirmed that one of the key challenges of measuring customer satisfaction in welfare-to-work services is the central role played by customer expectations. These are derived from anumber of sources, identified in Figure 2. Most categories in the diagram are self-explanatory.



18

Apart from providing practical help to improve a person’s ability to get a job, it is typically the very nature ofwelfare-to-work services to pursue a change in a person’s orientation to the labour market. This frequentlymeans re-examining and re-defining a person’s needs through extended discussions with a personal advisor.In some cases, people can be encouraged to look for and achieve a better job than they might haveexpected to get; in many cases, people’s hopes or aspirations for pay and job level have to be reconciledmore realistically to the kinds of jobs actually available. This puts the ‘expectations’ benchmark, typicallythe point of reference for rating satisfaction, onto shifting ground.

Another influence on service expectations for welfare-to-work clients is whether they are mandated to attendthe service. Expectations in relation to this can change over time. We have learned from focus groups withpeople on Employment Zones that though mandated attendance with the risk of a financial sanction initiallyprompted negative feelings, in retrospect mandated attendance was recognised as eventually helpful, whenthe service experience is a good one.

Explicit service communications are usually clear and, particularly for voluntary lone parent clients orIncapacity Benefit recipients, provide focused reasons to register with the service. These simpleundertakings can readily be translated to terms for rating satisfaction can subsequently be rated, with anoverall likelihood of higher satisfaction once clients discover the several ways that the service has beenhelpful. For mandatory clients, what to expect is less clear, often obscured by feelings about the terms ofreferral, and given that most have spent at least a year looking for work, before accessing the service, theycan arrive with a lack of belief in its capacity to help.

MORI notes that low expectations can generate higher subsequent satisfaction. This has been confirmed byfocus groups and interviews with WorkDirections clients,27 who regularly compare WorkDirections’ servicefavourably against other poor service. This is sometimes a negative experience of service from anotherprovider but the comparison more frequently refers to job search help from Jobcentre Plus. Suchcomparisons are hardly fair, given the entirely different resources and services delivered by Jobcentre Plusand Employment Zone providers.

Though Fortnightly Job Reviews, Work-Focused Interviews, and self-help job search do not serve as a validbenchmark for comparison with Employment Zone assistance, and the satisfaction differential mightreasonably be attributed to the entirely different resources available, WorkDirections clients will still ascribeto their advisor and the company qualities of greater helpfulness and effectiveness. This illustrates the needfor caution in interpreting polling about public service users’ views of the merits of private or publicprovision.

Customer loyalty and return visits

Welfare-to-work services, like other public services, can generate over-reliance or extended attachment whenthe client should have moved on. It was not uncommon to find ‘over-engaged’ Work for the Dole clients inAustralia, for example, who had so enjoyed their regular two-day-a-week unpaid work experience placementon a community programme that they wished to continue on placement indefinitely.28

27 - See, for example, Work in Progress: 10 people’s stories about finding employment, WorkDirections.28 - Reported to the author by Work for the Dole contracted providers, 2002-2005.

Market research techniques and concepts


19

Brand recognition

‘I went to one place, I forget the name’, said one lone parent in a WorkDirections focus group in London,recalling a provider that she had registered with to look for a job. The service there proved so unsatisfactoryshe changed to WorkDirections. While a company like WorkDirections works hard at its client and corporatecommunications to generate brand recognition, this is a sobering reminder that corporate brand and imagemay be less important and memorable for clients than the name of their advisor, for example, or themessage that the service is free, or reimburses travel costs, or helps people find a job that suits their health condition.

Social marketing

Social marketing is emerging as a community of thought and practice which applies marketing conceptsand techniques to achieve specific behavioural goals for a social good. It has arisen in a public policycontext in which governments, notably the UK Government in the past 10 years, have sought to transfer riskfrom the state back to citizens. The Government’s methods have been more extensive in scope and moreinterventionist than those used previously, involving various forms of persuasion, dissuasion, financialincentive, conditionality and sanctions. They have applied to a wide range of areas such as health care,environment preservation, education, crime reduction, the promotion of saving and employment for peopleon benefits.29

29 - A national review of social marketing commissioned in 2006 by the Department of Health analysed social marketing concepts and practices. Refer to http://www.nsms.org.uk/public/default.aspx



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5. Customer voice case studies

The following case studies provide a summary of some techniques of market research applied in thewelfare-to-work context. They summarise the intention, broad findings, and methodological issues, in termsof both the validity of findings and practical delivery of the research. Though they have not been spelt outin the case study summaries, differences of policy and market contexts between different countries shouldbe acknowledged. Findings are therefore reported to illustrate what kind of information the research methodyields rather than to promote the information itself or what it might imply. References to more detailedaccounts of these case studies are provided.

Focus groups at WorkDirections UK

Institutional context and objectives• The aim was to learn about clients’ past history and job aspirations, experience and perceptions of past

and current services, what worked and didn’t, ways to improve WorkDirections’ service, and whether marketing and communications materials were working as intended.

• Focus groups informed the development of a customer survey (see Appendix 1 p.54).• Key terms used by focus group participants to describe good and poor service are reported at the end of

this paper (see Appendix 2 p.57).

Method and sample• Eleven focus groups of between eight and 10 clients were conducted with Employment Zone clients in

Brent, Haringey, Southwark, and Nottingham and three with New Deal for Disabled People clients in Birmingham. Groups were facilitated by a person not associated with on-site programme delivery.

• Clients were randomly selected from those registered for between eight and 16 weeks.

Findings and uses of findings• Along with intense feelings about employment and their prospects, clients have intense feelings

about their engagement with welfare-to-work programmes and readily report their stories, experiencesand perceptions with surprising frankness.

• Differences of individual personality, past employment history and perceptions of needs meant wide variation in what customers sought and valued, but being listened to and treated with respect, being encouraged and kept positive were consistently expressed need and satisfaction factors.

• Mandated participation and low or no expectations can be turned around remarkably quickly. • Focus group analysis was used to help develop customer feedback questionnaires.

Learning• The potential risk that focus groups would descend into ‘complaining sessions’ did not occur. • Many people remarked on how they had enjoyed participating, perhaps due to the opportunity to see

their own individual job search in the context of a shared community of service users, and the chance toengage with another person from the company willing to listen to their opinions.

• Conversations about being unemployed might be explored as an aspect of the service where groups sharecommon experiences, for example, lone parents and men over 50.


21

Attitudinal segmentation – Australian Government

Institutional context and objectives• This research was commissioned by the Department of Employment and Workplace Relations (DEWR) in

2001 to segment the job seeker population into the dimensions of motivation levels and levels of limitation towards the type of job and job search activities acceptable to the job seeker.

• Originally the research was intended to be replicated over time, to quantify the proportion of job seekers in each segment, as a way of tracking the effect of government interventions and to inform future policy.

Method and sample• Fifty-two in-depth interviews were conducted with unemployed people to identify different job seeker

attitudes to work. • A segmentation tool was used to conduct 3,500 interviews, in which a series of 21 statements were

rotated for response and scored on a 1-10 scale. Example statements were: ‘You really want to work’, ‘You can’t be bothered looking for a job’, ‘You would rather be unemployed than take a job you don’t like’.

Findings and uses of findings• Eight job seeker segments were identified according to the two dimensions of motivation and job scope

‘openness’: Drivers, Selectives, Struggling, Dependent, Drifting, Cruising, Disempowered, Withdrawn.• The research was associated with messages the Government wanted to convey to unemployment benefits

claimants during 2002: There will be a lot more activity required by both the Job Network members andhence the unemployed, so there’ll be no rest, if you like, it’s activity, activity, activity, and we know that leads to jobs and it also messes around these people who say ‘No, I just like the lifestyle of being unemployed.’ 30

• The findings did not result in any policy changes, and the research programme ended in 2002.

Learning• There were concerns from welfare organisations that the 3,500 interview sample included lone parents

and people with disabilities, at that time not required to look for work. This would have had the effect ofincreasing the proportion of the apparently less motivated.

• This example of attitude and motivation research critically overlooked the factor of financial incentives to work. The survey instrument asked people about their attitude to ‘work’, or ‘a paid job’. For example, the statement ‘You would rather be unemployed than take a job you don’t like’ does not acknowledge thecritical qualifier likely to be relevant to unemployed people: How much? In that sense, it was research designed around government perspectives and priorities (to move people off benefits) rather than to acknowledge and understand the importance of a key job seeker need (to improve income prospects).

• Methodological rigour and transparency of research design could help to build trust that attitude and motivation research like this does not necessarily pursue the confirmation of existing negativestereotypes, and can inform policy.

30 - Mal Brough, then employment minister, 2002, cited in Australian Broadcasting Corporation Radio National programme Out of Work, Out of Sight, 13th February, 2005.



22

31 - Tony Winefield, School of Psychology at the University of South Australia, interviewed for Australian Broadcasting Corporation Radio Nationalprogramme Out of Work, Out of Sight, 13th February, 2005.

32 - A copy of the survey tool is included as Appendix 1.

• There is considerable scope further to explore attitude, motivation and behaviour segmentation as a way to inform effective service design. Examples might include types of jobs sought (full-time, part-time, flexible hours), willingness to re-train, and attitudes/perceptions of the value of minimum wage work. This could inform ways to communicate with and deliver services to job seekers and to work with employers.

This kind of pigeonholing assumes that people can be neatly put into one pigeonhole, whereas in factthey might show behaviours or characteristics which would make sense for them to be put into morethan one pigeonhole… Professor Tony Winefield, 200231

Customer satisfaction survey – WorkDirections UK

Institutional context and objectives• The survey was developed for WorkDirections UK during 2006 to create a single common survey tool

for customer feedback across programmes and sites and to support comparisons between groups and over time.32

Method and sample• Survey design was preceded by focus groups with clients (see above) to inform development of

meaningful indicators of service effectiveness and satisfaction. The survey tool was reviewed by the market research company Ipsos MORI.

• A survey was conducted at one site to ask clients the communication mode through which they prefer togive feedback.

• Future plans for survey development include the analysis of survey responses to check whether survey returns represent the client population profile, and putting prompts to complete the survey on computersused by clients for job search.

Findings and uses of findings• The most favoured feedback modes were written and computer-based surveys.• An estimated 30% of customers complete surveys. Survey completion rates can be substantially

increased by the active involvement of reception and Job Station staff (a supported job search facility with access to PCs, internet and publications).

• There are plans to deliver the survey across all sites within a common time frame to generate a sufficiently large data pool to analyse the sample and permit programme and site comparisons.

• Early surveys at individual sites have helped to gauge levels of satisfaction, which tend to be high on general service aspects. There is not yet sufficient data to determine patterns of dissatisfaction and obvious areas for improvement.

Customer voice case studies


23

Learning• The development of the survey tool posed considerable challenges in terms of:

o Recognising individual customer differences and needs which may not have been captured by the broad categories of benefit type and duration on benefit, age, ethnic background or sex.

o Designing survey strategy and/or indicators that might capture the ‘before-and-after’ effect of the service, which is its raison d’être, and therefore important to measure.

o Recognising in addition to the ‘change-over-time’ dimension, the complex interplay of the following factors, and how they contribute to the chances that someone will get a job:

- how satisfied people are with the quality of the service they are getting (how they feel), and- whether the service has a discernible impact on job search activity or preparedness for work (what

they do, or what progress they have made).• The interrelationship of those three kinds of measures is characterised in Figure 3 below. Different

stakeholders in the service (purchaser, provider and individual) have different reasons to be interested inthe measures and different ways to use them.

• Progress milestones are difficult to standardise.33

Customer satisfaction indicators

Job outcomes measures

Distance travelled

measures / milestones

33 - Indicators attempting to characterise the impact of the service are included in the survey tool at Appendix 1.

Figure 3 - Related customer metrics in welfare-to-work



Value Creation Workshops - Australia

Institutional context and objectives• Centrelink is the public agency contracted to administer benefits and refer customers to employment

programmes and social services.• In 1997, Centrelink contracted the Value Creation Group (VCG) Pty Ltd to provide consultancy services

to deliver customer feedback workshops incorporating Centrelink staff and other stakeholders, using a range of what the VCG termed proprietary methodologies.

• To 2005, 1,500 workshops were conducted, involving 27,000 Centrelink staff members, various community sector representatives and several thousand customers.

• The aim of the programme was to understand customers’ primary needs overall, service improvementpriorities for Centrelink, and to guide change at policy, strategic and operational levels.

Method and sample• The method was an unusual approach, combining some characteristics of the facilitated focus group

with multiple choice and open-ended survey questions which are compiled and reported back during the group.

• This relied on trademarked methodology for the workshop, including proprietary software and electronic polling devices to provide real-time reporting of customers’ responses.

• Workshops were attended by recipients of social security entitlements, Centrelink customer service staff,specialist staff and managers, community group representatives, and contracted providers of employment services.

Findings and uses of findings• Each workshop generated a report, provided to the relevant Centrelink customer service centre, detailing

findings and recommending areas for service improvement.• Management information contained in individual Value Creation Workshops reports includes:

o Identification of customers’ positive experiences, concerns/irritants and their relative importance.o Evaluation of Centrelink’s overall performance.o Evaluation of Centrelink’s performance on specific aspects of service.

Learning• An Australian National Audit Office (ANAO) review of the workshops identified some concerns about:

o Possible bias in the selection of workshop participants, with opportunities for staff to eliminate thosethought unable to engage with the questions.

o The risk that people might feel intimidated about giving honest feedback.• The ANAO also identified a lack of systematic follow-up, or accountability for follow-up from workshops,

which inhibited their ability to result in demonstrated service improvement. One sign of this was recurrent reports over the years of the same service irritants being identified, indicating a lack of impact of the feedback to promote change in the organisation.

• The ANAO was also concerned about the procurement process for the workshops, in terms of the opennessof tendering and the risk that the Value Creation Workshops’ proprietary methodology and contract termslimited Centrelink’s capacity to identify alternative suppliers and pursue better value for money.

24

Customer voice case studies


25

The following case studies of choice mechanisms summarise how different strategies work in welfare-to-work programmes. They cover the institutional context and objectives, delivery strategy, broad findings, andsome key learning points.

Though in principle the concept of customer choice is desirable, the forms that customer choice might takein welfare-to-work programmes are many and varied. The case studies have been selected to illustrate thekey choice points that might arise in the welfare-to-work context: the choice of a provider, the choice of acourse of action once a person has been assigned to a provider, and the choices (and mix of decision-making between client and advisor) about discretionary spending to help someone get a job and keep it.

There is also an account, illustrated in the Work for the Dole example, of how free choice (in this case of akind of work experience placement) works within a no-choice context of mandated participation with benefitsanctions for non-attendance. This confirms the critical and positive role played by choice in building trustand engagement in mandatory programmes.

These case studies map the landscape of administrative options for implementing choice, and provide aconcrete basis from which to inform the more general discussion about choice and voice in welfare-to-workthat follows.

Employment Zones choice of provider - UK

Institutional context and objectives• Employment Zones are outcome-oriented contracts which incentivise providers to achieve early job-entry

and 13-week sustained job outcomes. Providers have the flexibility and freedom to design tailored interventions for clients.

• Since 2004, six of the 13 Zones have been multiple provider Zones, with two or three providers in each multiple provider area receiving a quota of mandatory customer referrals according to their contracted market share.

• That arbitrary random allocation process was replaced in April 2007 by one of choice-based referrals. Jobcentre Plus informs customers about their requirement to participate in a programme, provides information about the provider options available, and makes referrals after giving clients a set period of time in which to decide.

• Customers not making a choice are randomly allocated to a provider. It is not known whether these kindsof referrals are being made to restore market share to providers who might otherwise be below their expected numbers of referrals.

Reporting and analysis• The DWP compiles data on the numbers of customers who choose a provider.• Focus groups with WorkDirections clients explored with them the factors involved in making a choice.

On the basis of this and advisor experience, a simple survey was devised to ask newly referred customerstheir main reason for choosing WorkDirections.

6. Customer choice case studies



Findings • Employment Zone clients are utilising the opportunity they have been given to choose a provider. To

December 2007, a total of 15,039 clients had started on an Employment Zone. Of these, 87.5% chose their provider, 6% were randomly allocated, and in 6% of cases the basis of the referral was not recorded or not known.

• A significant 31% of customers have previously been registered with a Zone provider, indicating that choice is being made based on some previous experience.34

• Although data analysis suggests that location is the most frequently mentioned main reason for clientschoosing WorkDirections, when numbers for main reasons linked to service quality are aggregated, theyfar outweigh location as the motivation for choosing. This ‘service quality’ group of positive choicefactors includes having previously been registered with WorkDirections, and being recommended by apartner organisation, or by a friend or family member.

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0 50 100 150 200 250 300 350 400

Location of WorkDirections office

July to December 2007 N=1,928

Previous WorkDirections client

Previous competitor client

WorkDirections leaflet

Recommendation - friend/family

WorkDirections contact atJobcentre Plus

Recommendation - partnerorganisation

Other

WorkDirections contact

34 - This is based on DWP data (N = 10,829) made available to multiple provider Employment Zone providers about customer choice.

Figure 4 - Reasons for choosing WorkDirections: all Employment Zone registrations

Customer choice case studies


27

• Previous registration with a competitor may indicate that the experience was negative, as describedsometimes emphatically in focus groups. However, people in focus groups sometimes mentioned aninclination simply to try something new after being with a different provider.

• Market share changes based on client choice can be significant. In the DWP data to December 2007, for example, one provider had increased its 50% notionally contracted market share to 65%. In a different Zone, a provider had ‘lost’ 14% of its 50% share.

• For contracted providers it is helpful to know where to direct attention to improve the chances of increasing market share, for example, by reviewing location convenience, improving printed communications materials for prospective customers, developing a word of mouth recruitment strategy or increasing advisor presence at Jobcentre Plus offices.

LearningWorkDirections has identified the following key factors as informing choice where people have exercised it35:

o Perception of provider based on personal experience of working with the provider.o Perception based on other people’s opinions or recommendations.o Perception based on provider-generated information/marketing. o Location convenience of provider.

• Customers without previous experience of Employment Zones are sometimes choosing a service about which they know comparatively little.

• Experience of providers’ services creates more informed choosers and generates clearer preferences. WorkDirections customers in focus groups repeatedly and emphatically reported having experienced marked differences in service quality, and experiences of both good and poor service quality related strongly to the desire to choose or change providers. Nearly a third of people starting an Employment Zone between April and December 2007 are people returning to the programme, and are by implication relatively informed choosers.

• In principle, all providers can offer the same range of general and specialist services, and many WorkDirections customers have indicated that the promotional literature does not particularly distinguisha unique provider offer. However, voluntary clients have often been attracted to WorkDirections by fairly generic messages, such as ‘help with child care’, ‘you will be financially better off in work’, or ‘we’ll finda job that suits your health condition’.

• Though clients have the option to visit a provider to inform their choice, this happens relatively rarely, and it is not clear how much this kind of experience of a provider might reliably inform choice.

• There is a question about the degree to which the Department for Work and Pensions would wish to moderate the sometimes significant losses and gains attributable to choice and the rationale for doing it.If providers are being rejected on the basis of unappealing services or poor previous or reported experience by system users, it seems unfair to ‘top up’ referrals to poorer performers in this way.

• If a common survey question to find out ‘reasons for choosing’ could be agreed and implemented by providers in an Employment Zone, it would be interesting to analyse the distribution of reasons for choosing and impact on market share (to the extent that there is tolerance to increase market share). Reasons for choosing might also have an impact on the capacity of a provider to achieve an outcome for clients.

35 - Based on discussions with advisors, focus groups with clients, and a simple survey completed by advisors when people start on the programme.



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Job Network choice of provider - Australia

Institutional context and objectives• Enabling people to choose the provider that would help them get a job was one of the cornerstones of

major reforms to employment assistance that introduced the Job Network in 1997. • In all but 16 of the 137 contracted areas, there are multiple (usually between three and five) competing

providers delivering Job Network services. • In 2003, the introduction of the Active Participation Model was designed to ensure the continuous

engagement and ‘activation’ of job seekers in job search and related activities. The same provider delivers all of a client’s self-help job search, job search skills training, and intensive assistance to find a job should they remain unemployed. Customers return to their original Job Network provider should they return to claiming benefits, and changing provider is only possible when the relationship between a provider and client has broken down and an alternative provider agrees to register the client.

• Job Network customers are referred by the benefits processing agency, Centrelink, which passes on to them information provided by Job Network agencies and makes the referral. Job seekers are advised thatthough attempts will be made to refer them to the provider of their choice, placement with the provider of choice is not guaranteed.

• People who do not choose are randomly allocated to a provider.• To accommodate job seeker preferences, Job Network providers can increase their market share by up to

20% above the contracted share of business for an employment service. Conversely, contract managers attempt to maintain the financial viability of providers by ensuring that providers do not fall below 80% of their contracted market share. However, this may be varied in certain circumstances, for example, to suit local transport and population distribution conditions.

Reporting and analysis• A 2002 job seeker choice of service provider study was based on computer-assisted telephone interviews

with a representative sample of 3,018 job seekers.36 This is referred to below as the 2002 study. • An ANAO review of the implementation of the Job Network contract 2003-2006 examined whether

unemployed people were given an informed choice of provider.37

FindingsFindings from the 2002 study of choice (as it worked in the Job Network before 2003):38

• 71% of job seekers chose a provider for their job search training or intensive assistance.• 45% of those referred to job search training or intensive assistance had chosen a provider because it

was conveniently located. This finding should be extrapolated to the UK with caution.39

• Of those not choosing a provider, only 3% did not want to choose. The main reasons for not choosing a provider were: they didn’t know they could choose; the referral letter specified the agency; and Centrelink chose a provider for them. The referral letter named an agency and advised job seekers they could change it if they wished to choose their agency instead, but this created some confusion.

36 - NFO Donovan Research, Job seeker choice of service provider: Findings from the 2002 Job Seeker Survey, commissioned by the Department of Employment and Workplace Relations, 2002.

37 - Australian National Audit Office (ANAO) Report No.6, Implementation of Job Network Employment Services Contract 3, 2005–06.38 - NFO Donovan Research, Job seeker choice of service provider, 2002.39 - Location is arguably a more significant choice factor in Australia, where the distances between job seekers’ homes and town centres are

greater than in the UK, and where public transport is more sparsely distributed and less frequent..



29

Findings from the ANAO review:40

• Centrelink Preparing for Work information seminars were the primary vehicle for giving job seekers information to help them choose a provider, but the adequacy of information provided at seminars was sometimes poor, with the extent of commitment to remain with a provider, and how to change a providernot properly explained. In some cases, job seekers were required to choose a provider without having attended the information seminar.

• 50% of customer complaints in the Job Network transition between contracts were associated with requests to change provider.

Learning• There is very little evidence that job seekers are not willing to choose a provider. • The extent to which job seekers are able to make an informed choice of provider depends on the quality

and timing of information provided to them.• Where choice is to be offered, the referring agency (in this case Centrelink) should be subject to a

specific contractual agreement about the kind of information to be provided and standards of information provision to support informed choice.

• Although the Job Network star ratings have been likened to a hotel rating system,41 and were originally intended to inform the choice of a provider, there is little evidence that they were used in this way. One reason for this is the website navigation necessary to extract the information, requiring the download of aDEWR report on every Job Network site’s performance in the country.

Job Network Job Seeker Account – Australia

Institutional context and objectives• The Job Seeker Account shares the risk of investing in job seekers’ return to work expenses between

providers and the Government. It was introduced to the Job Network in 2003 after evaluations suggestedthat Job Network organisations were not investing adequate funds on goods and services to assist job seekers into work, especially the most disadvantaged.

• The Job Seeker Account enables the Government to track the variety and nature of expenditure made onjob seekers.

Reporting and analysis• By recording types of expenditure made using the Job Seeker Account, the DEWR can analyse links

between kinds of expenditure and job outcomes (for example, outcomes associated with types of training- see more below).

• The ANAO investigated the administration of the Job Seeker Account in a report published in 2007 andthis has resulted in additional information.42

• As far as can be determined, there are no studies or reports available about the extent of job seeker involvement and discretion in Job Seeker Account spending.

40 - ANAO Audit Report No.6, 2005–0641 - Minister for Employment Services, Star Ratings press release, July 2007.42 - ANAO Audit Report No.32, Administration of the Job Seeker Account, 2006–07.



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43 - ANAO Audit Report No.32, 2006-2007, p.13.44 - Jobseeker Account Evaluation Report, Department of Employment and Workplace Relations, August 2006.45 - Research conducted as part of the Department’s Job Network best practice study reported in the DEWR Annual Report, 2005-2006, Chapter 3.

See also Stephen Powrie and Cary Duffy, ‘JSKA: What Works’, DEWR conference presentation, Grand Waldorf 2006.46 - ANAO Audit Report, Figure 1.3, p.39.

Findings• The five largest Job Seeker Account expenditure categories were:43

1. Employer incentives (29%) with most spent on wage subsidies (averaging AUD$2,611 for an individual job seeker). These are typically made at 13 weeks and 26 weeks of employment to align with the periods required to trigger outcome payments.

2. Job seeker training (24%), including enrolment costs or related books and equipment. 3. Clothing and equipment (12% of expenditure, but the most common category of spending). 4. Professional services (13%) - includes vocational counselling and rehabilitation; drug, alcohol and

mental health counselling; medical services; and marketing job seekers to potential employers (reverse marketing).

5. Transport assistance, fares and petrol (9%).• Job Seeker Account spending on a client more typically involves more than one single type of

expenditure. Fifty eight per cent of job seekers received more than one type of assistance.44

• It is possible to report types of spending in relation to outcome rates. For example, completed security training had the highest off-benefit rate of 47% (10 percentage points higher than the average), whilejob search skills and information technology courses (the first and third most common types of training)had the lowest levels of off-benefit outcomes, with only around 33% of customers being off benefits sixmonths later.

• Of all forms of Job Seeker Account assistance, wage subsidies resulted in the highest levels of sustainedemployment, with 56% of these expenditures associated with 13-week outcomes.45 However, wage subsidies are applied to a small number of people, around 7% of those for whom some kind of Job Seeker Account assistance is claimed46, and the ANAO reported that more than half of wage subsidy dollars are spent on job seekers who are not classified as highly disadvantaged.

Learning and implications• Extensive guidelines and rigorous contract manager scrutiny of spending restricts opportunities to use

the Job Seeker Account in ways that would transfer to clients the freedom and responsibility to decide how to spend this potential investment.

• Evidence of substantial expenditure on wage subsidies invites close scrutiny of whether they are warranted. The ANAO and DEWR both noted that organisations with higher star ratings also spent more on wage subsidies. The ANAO reported concerns in the industry that organisations are simply using subsidies to ‘buy’ outcomes that will not be sustained beyond the qualifying period for an outcome fee. The ANAO also noted that Job Network organisations are spending only half the funds for wage subsidieson the most disadvantaged people.

• Analysis that associates particular types of job seeker spending with job outcomes needs to be treated with some caution, because it is difficult to isolate their impact from other kinds of expenditure on job seekers and other interventions. The ANAO noted that in trying to ascertain the extent to which job placements can be attributed to use of the Job Seeker Account, it would be necessary to do so within anevaluation of the programme as a whole, which should take account of exogenous factors such as macro-economic conditions and the state of the labour market.



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Work for the Dole choice of work experience placement - Australia

Institutional context and objectives• Work for the Dole aims to provide mandatory unpaid work experience to people unemployed for

six months, to develop their work habits, involve local communities and contribute to their facilities and services.

• Required hours vary according to age and circumstances. The most common attendance requirement is for 15 hours a week, usually over two days, for six months. In 2006, full-time Work for the Dole (25 hours a week for 10 months of the year) was introduced for those out of work for more than two years.

• Work for the Dole was originally regarded as a ‘mutual obligation’ rather than an employment programme so programme performance has been defined in terms of attendance hours rather thanemployment outcomes. Recent changes have required providers to create work experience in areas oflocal skills shortages.

• Work for the Dole participants ‘earn’ training credits of up to AUD$800 by participating in Work for the Dole, to be spent on approved courses.

Reporting and analysis• Departmental research and reporting on the programme has focused on its key performance indicators.

The efficiency indicator is the utilisation of funded places, measured in attendance hours. The ‘effectiveness’ indicator measures the quality and diversity of Work for the Dole places from the perspective of both contract managers and Work for the Dole participants.

• Participants’ views are collected from an in-programme survey.• A large independent study of the Work for the Dole programme was published in 2003.47 Some findings

are reported below.

Findings• During the year ending 30 September 2006, DEWR reported that 85% of people who had participated

in Work for the Dole were satisfied or very satisfied with their Work for the Dole project in terms of overall quality of assistance and service.48

• Though a significant number of people initially object to being required to attend Work for the Dole programme, they later report that they had found their placement satisfying and rewarding.49 Seventy-six per cent of Work for the Dole participants report being satisfied with their (mandatory) work experience placement, which compares quite favourably with alternative elective activities: voluntary work (94%), part-time study (92%), part-time work (88%).50

• Satisfaction with Work for the Dole does not, however, run parallel with its perceived ability to improve employment prospects, which is rated at only 54% for those doing Work for the Dole. The employment improvement prospects ratings are much higher for job search training and for self-selected mutual obligation activities.

• Reviews of the qualitative and quantitative evidence of participants’ views suggest that the mandatory nature of the programme does not have a significant negative impact on subsequently experienced and reported satisfaction with a placement, though satisfaction is more likely to be intrinsic than related to job outcome or job relevance.

47 - Ann Nevile and John Nevile, Work for the Dole: Obligation or Opportunity?, Centre for Applied Economic Research, University of New South Wales, 2003.

48 - DEWR Annual Report, 2005-2006, Part 2.49 - Ann Nevile and John Nevile, Work for the Dole, 2003.50 - DEWR and NFO Donovan Research, Participation and Obligations: Findings from the 2002 Job Seeker Survey, 2002, p.5.



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51 - As described in the DEWR Annual Report of 2006-2007.52 - The 2006-2007 DEWR Annual Report reported 39% off-benefits three months after Work for the Dole. 53 - The author was a member of the Community Work Coordinator Working Party during 2003-2005.

Learning• Work for the Dole is a mandatory programme with an implicit policy intention to ‘shake the tree’ of

benefits claimants not declaring paid work 51 or not intending to work. Lack of evidence about the extentof undeclared work among benefits claimants makes it difficult to inform the debate about whether theprogramme is ‘punitive’ in requiring unpaid work contribution and promoting off-flows from benefits byrequiring regular attendance, or whether it helps people find work by promoting work habits.52

• Community Work Coordinator (CWC) staff are aware that they may encounter resistance and negative feelings among people referred to the programme. Having learned that people will not attend if they are not interested or happy, despite the threat of sanctions, CWCs work hard to offer a range of placement choices, in many cases tailoring placements to meet individuals’ needs and interests. The efficiency indicator, attendance hours, supports these management priorities.53

• The requirement to undertake mandatory work experience is not in itself the most significant factor of customer satisfaction or perceived benefit. As in the case of Employment Zones, attitudes to mandatory referral can clearly change over time. In the case of Work for the Dole, these can be attributed to the opportunity to choose a work experience place that can accommodate individual needs and interests, to work in groups with others, and to do something with demonstrable community benefit.

• Attitudes to the unpaid nature of work experience vary significantly according to perceptions of the intrinsicvalue of what the work will achieve (underlying the importance of choice for the person who has to do it). Italso varies according to people’s perceptions of its value to possible future paid work for them.

• The role of Work for the Dole project leaders is critical. In conjunction with the ability to demonstrate and impart vocational skills in areas such as construction, landscaping, or admin/computer work, they are also required to have a social work-type skill set supporting communication, mentoring and group management. For many Work for the Dole participants, these people and the work itself is a more effective source of learning to promote workforce re-attachment than regular meetings with a personal advisor in the office setting.

• In summary, Work for the Dole is a programme that might be characterised as a hard programme with a soft centre. It compels participants to attend, but within that firm expectation of unpaid work, it restoresto them a degree of autonomy and some sense of the value of their (albeit unpaid) work by providing choices of work experience places.

Individual Learning Accounts - UK

Institutional context and objectives• Individual Learning Accounts were introduced in 2000, the realisation of a pledge made by the

Government to encourage people to invest in their own learning.• The Government also aimed to encourage more flexible delivery of learning through a wider range of

providers, particularly those operating in niche markets and those attracting new, non-traditional learners.• Learners were free to identify the learning they wished to undertake and providers were free to market

their services to learners. By making a small contribution, learners could claim either a flat rate contribution towards the cost of eligible learning, or discounts for the cost of learning to an upper limit.

• Providers needed only to register to be involved and were not subject to quality assurance checks.



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• The objectives for the scheme were defined as a commitment to achieve one million account holders rather than being defined in terms of learning outcomes.

• Thirteen months after the scheme was launched it had 2.5 million registered eligible learners and demand significantly exceeded budget allocation.

• Evidence of fraud by some providers (for example, claiming for non-existent learners or failing to deliver training) closed the programme 14 months after it started.

Reporting and analysis• In 2002, the National Audit Office investigated the management and delivery of the scheme and found

that its early closure was not due to the innovative nature of the programme, but to the speed ofimplementation, inadequate risk identification by the Government, the relationship with the programme’sprivate partner, and inadequate monitoring of demand and learning complaints.54

• The Department for Education and Skills (DfES) commissioned consultations with providers and learnersparticipating in the scheme to explore what form a successor scheme might take.55

FindingsThe views and experiences of learners regarding choosing and using learning providers are reported herefrom the DfES study, which was based on telephone interviews with a representative population of learners.• Though 85% of learning account holders had not received any independent advice to help them find the

most suitable learning/training course for them, 76% were confident that they knew how to find out about training courses in their local area, most often through the local college (58%).

• From a list of options about what would encourage them to take up learning, having a list of training providers guaranteed to offer good quality courses was among the most frequently mentioned, along withhaving an employer helping with training relevant to current work.

• However, the lower the level of qualifications of respondents, the more importance they placed on training/learning provided within the local community (e.g. at a school), and someone to support them while they took part in training/learning

• Account holders were given two options about the best way for them to access training or learning. Two-thirds said the best way would be ‘to be given a list of courses which are free of charge and allowed to turn up at training providers to register for these if I am interested’. The other 33% preferred ‘to be ableto open my own learning account so I could decide what learning or training I would like to buy’.

Learning• Though some pilot schemes had been undertaken before the introduction of the programme, a more

substantial evidence base of the attitude and motivations of providers and learners should have been considered in designing the programme.

• Some service users come to their entitlement with needs and preferences already defined, others are at risk of having those defined by providers pursuing business. In general, older and better qualified peopleneeded less support and guidance about learning options than younger groups and the less qualified.

54 - National Audit Office report, Individual Learning Accounts, October 2002.55 - Department for Education and Skills Research Report no 339, Individual Learning Accounts: A Consultation Exercise on a New ILA Style

Scheme, 2002.



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• The Individual Learning Account programme indicates a need to segment account holders according to their orientation to decision-making about how to use their entitlement.

• Although in this particular case users indicated a general preference for the Government to determine a list of ‘good-enough’ providers, this preference is on the condition that the service is free. The role of part-payment by service users in affecting choice preferences is not known.

• The careful monitoring of complaints can be an important source of learning that is at risk of being overlooked.



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Obviously I started with WorkDirections but I chose to find out what [other provider] could offer andthen I chose to come back to WorkDirections.

[If you get to choose a provider, it means] … They value your opinions. They value you as a person andrealise that each individual has a choice to make.

It gives you more exposure and it helps with competition because it means that you can then offer yourexperience. It gives value to comparison because you can then go in and say I’ve seen this and I’veseen this and then decide.

We all want to be in control in our own lives. So, that desire is always there. It can be overt or covertbut it’s still there, that you are in control of your life, not somebody dictating to you. Once you’ve takenthat decision [to go to a particular provider], whether it works for you or not, it’s your responsibility andyou are in a better position to accept that as your responsibility.Lone parents, Southwark Employment Zone, 2007

Taken together, past experience of welfare-to-work programme delivery and emerging learning confirm thatin welfare-to-work, as in other public services:1. There is need and opportunity to respond to variation in different people’s needs and preferences.2. System users are willing to be consulted about the design and delivery of services that will affect them

and are a rich source of information and expertise.3. Contracted provision needs to be configured so that real choices are available.4. It is important that customers make informed choices, but not everyone will need the same levels of

information and support to make choices.5. There is a need to manage the risk that providers will choose consumers rather than the other way

around, particularly when consumers are handed purchasing power by the Government.6. Although it is too early to tell in the case of contracted welfare-to-work provision, there is good reason

to believe that customer choice could and should lead to higher standards of service and value for money through:o Pressure on low-quality or incompetent providers to improve.o The means to reduce business levels for low quality or incompetent providers, and possibly to

eliminate them.

As indicated in the introduction, however, this paper does not make radical for a particular policy orprogramme approach to welfare-to-work contracting to render the system more responsive to individuals’needs and the forces of consumer-led competition. Instead it signals a more iterative approach involvingtrialling, researching and learning from a range of different possible approaches.

This apparent tentativeness has three sources. There remain some unresolved policy questions threadedthrough the consideration of current contracting options. Essentially they centre around the question ofwhether the locus of power for decision-making to choose a provider and/or the type of service provisionshould lie with individuals or the Government; and also, in relation to this, whether a meaningfuldifferentiation of customer segments can be determined, with some more entitled to exercise choice anddiscretion where they meet particular conditions.

7. Choice, voice and exit:who, when and why



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The second reason to recommend that the Government learns as it goes is owed to the recognition that theparticular circumstances of administration and management can make a sometimes rather confusedprogramme work (as in the case of Work for the Dole) or conversely, take a laudable policy aim and render ita mistake through lack of attention to operational delivery detail (as in the case of Individual LearningAccounts).

Finally, the tentativeness is due to the recognition that contracted welfare-to-work provision involves aunique and shifting mix of government regulation and market freedom, public and contracted provision, anddifferent populations of disadvantaged individuals in changing relationships to the state. The mix of thesefactors in planning and directing policy outcomes involves a complex and frequently mysterious chemistry.Though the Government controls what it can to set performance measures and targets, to calculate fees,create rules for provider competition and promote financial incentives to work, it is necessary to understandthat not all factors can be planned and managed in advance.

This paper embarked from the interest of public sector reform in ‘the individual … as the agent of their owninterests – empowered within the collective framework of provision that constitutes the enabling state’56,along with the recognition that this framework of provision should be more market-friendly. In the followingdiscussion, ways in which the interests of individuals and the state can be served by markets for welfare-to-work provision are considered in more detail.

The criteria for choice: What counts?

When you’re looking at something that changes people, customer satisfaction is, by definition, a far lessvaluable measure than a more objective one, so it could be dangerous… The real satisfaction will besuccessful outcomes, actually getting a job, and I think that should be the measure… David Freud, 200757

What would have been positive if it came down to the choice of which one you wanted to go to, is if youcould see the success rate of anyone who comes to these companies, how much people have beenemployed through coming through these places.Employment Zone client, Brent, 2007

I know the Jobcentre says, we help so many thousand, well that number means nothing. You don’t reallycare how many people have got jobs, you just want one.New Deal for Disabled People client, Birmingham, 2007

A referral is like a doctor who sends you to the best specialist for your problem. But with Centrelinkthey just give you a list and they don’t tell you which one you should go to. But if you don’t pick one intime, they pick one for you.Job Network client, 200258

56 - Patrick Diamond (ed.) Public Matters, 2007, p.6.57 - Interviewed for this paper, December 2007.58 - Cited in NFO Donovan Research job seeker survey, Job seeker choice of service provider, commissioned by DEWR, 2002. Centrelink was

required to observe rules to preserve competitive neutrality, which meant that staff could not recommend one or another provider. Many people referred to the Job Network found this strange.

Choice, voice and exit: who, when and why


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The Job Network customer is describing a process that doesn’t make sense to him. Why shouldn’t theGovernment simply tell you who is the best specialist for your problem? But what is the best? When asked,most people in WorkDirections focus groups come down on the side of ‘getting people into jobs’ rather than‘good quality of service’ if required to make a choice.59 And what kinds of specialists are on offer?WorkDirections focus groups with New Deal for Disabled People customers show that the message ‘we canfind a job that suits your health condition’ has particular appeal in promoting service use and is animportant satisfaction factor.

Though it is in principle logical and desirable for unemployed people to be given a choice of their welfare-to-work provider, the criteria on which they could base a choice needs to be better understood andcommunicated. Being best at getting people into jobs sounds promising, but WorkDirections focus groupparticipants again have expressed a degree of mistrust of claims providers can make, for example about howmany thousands of people they have placed into jobs. For some this is just dismissed as the hyperbole ofmarketing and sales. Even for those inclined to take marketing on trust, the question is frequently ‘Fine forthem, but what about me?’

It is a legitimate question, and one consistent with the qualified response of most unemployed people tothe question of whether they want to be in paid work. ‘What kind of work is it, and how much would I earn?’are understandably the most frequent concerns. Apart from moderating definitions for success claims madeby providers (which the star ratings aim to do), the Government might also consider information aboutprovider differences that could be expressed in terms of earnings and/or levels of jobs achieved, or the jobsachieved for people with particular needs. This might provide a rational basis for decision-making aboutwhich provider to choose.

The previous scenario assumes that the Government and the customer agree that work is a desirableoutcome, one that entails fairly straightforward performance measures (even if, administratively, they mightpose challenges for timely and accurate data collection). But what if the Government and customers don’tagree? Though there was little evidence of work avoidance among people in WorkDirections focus groups(these being selected from those attending the programme), it must be acknowledged that an unspecifiednumber of people claiming benefits do not consider paid work a priority in their lives.

For these kinds of people, could providers’ success rates for job placement have a negative impact onchoosing? Additionally, could a government objective such as the speed of placement be at odds with acustomer’s desire to use a service that might take longer to achieve job placement?

There are other choice criteria which, though legitimate, swim against the Government’s intention tocontract for outcomes. If the ‘enabling state’ is indeed intended to strengthen personal autonomy,interdependence and self-esteem, then why shouldn’t its unemployed and disadvantaged citizens andcustomers choose services according to process measures, the kind that might rate services as fair, friendly,respectful and supportive? By extension, this might include indicators for whether customer serviceundertakings are honoured, a dimension of service performance not currently reflected in, or consistent withemployment outcomes achieved.

59 - This proposition warrants more rigorous testing, as recommended in the final section.


What matters and to whom?

Process The journey

Job outcomesThe destination

What are the agreed common measures

of value?

CUSTOMER GOVERNMENT

Mandatory client preferences?

Satisfaction measures- friendliness / respect- would come back - quality of information- waiting times- convenience, etc.

Voluntary client preferences?

Outcome measures- job placement

- retention- earnings growth

Research needed to establish any link


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If ratings are provided according to these customer-friendliness criteria, however, it might pose aconsequent risk that people with the poorest prospects for finding work are more likely to gravitate towards‘process’ kinds of measures to inform their choices, so that the service journey is satisfying in itself. Or it mightmean that those determined to avoid work could choose a provider who may least threaten to challenge theirexisting work orientation. This assumption needs further testing, in view of the WorkDirections Australia marketresearch finding that this group of ‘reluctant job seekers’ only comprised 11% of the 392 people surveyed.60

The following comments from voluntary New Deal for Disabled People clients in Birmingham illustrate thespectrum of opinion about the kinds of information most helpful in informing a choice of provider.

In the long term, it’s sustainability. You might get 70%, [job placements] but if you can’t sustain that, or ifthese people only have a job for five or six months… You might only help 40%, but if those are sustainable inthe long term, then the 40% will be higher.

I’d probably look at sustained employment, but on the flipside it is important to know the care andhelpfulness as well, but if I had to choose, I will choose the sustained job.

If I was happy with my provider and I didn’t get a job, and I had to use them in two years’ time, I’d go withthe ones I was happy with, rather than go for the one that got more people a job.

I think the question is a bit like being between a rock and a hard place, really. There has to be sustainedoutcomes, but also the service is important, and I would think the two of them work hand in hand, and Ithink somewhere along the line, the two of them have to tally, because you won’t have great sustainabilitywithout the other one. But I would have to go for the sustainability.61

Figure 5 illustrates the tension between the kinds of performance metrics that might inform a choice of provider.One set of these might be characterised as the quality of ‘the journey’ for service users, the other as ‘thedestination’. Each implicates different kinds of measures of value. Both clearly have a place in welfare-to-workcontracting. The question is which separate measures or which mix of them should be used to inform choice.

60 - Colmar Brunton Social Research for Ingeus and WorkDirections Australia, Job Seeker Customer Satisfaction Research, 2004.61 - Focus group with Birmingham New Deal for Disabled People clients, September 2007.

Figure 5 - Common agreed measures of value: process or outcomes?



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The questions here are: What counts? Can the Government and job seekers in general agree, and should theyeven have to agree, about what a ‘best provider’ is, for the purpose of informing choice? Could and should foraysinto profiling customer segments based on people’s attitude and motivation be used to ‘qualify’ people to make achoice? Though this seems unnecessarily complicated, evidence of a person’s dedicated job search efforts shouldsurely, in principle, earn them greater freedom and self-determination to choose what the system has to offer.

John Hutton, former Secretary of State for Work and Pensions, talked about choice being a privilege, with choicereduced over time the longer someone is on benefits,62 but this does not seem to take account of people’s effortsto find work and is at odds with evidence reported in this paper that longer engagement with the systempromotes more informed and therefore arguably more efficient choice-making.

One purpose of the star ratings being developed by DWP is to inform customer choice. Changes to the starratings made in late 2007 mean a much greater emphasis on job placement (40%) and retention (30%) forEmployment Zones, a total of 70%. This is consistent with WorkDirections focus group indications that if achoice had to be made, job outcomes are the most relevant information people would consider in choosing a provider.

The remaining question is whether star ratings should be presented to prospective clients only as an aggregatedrating, or whether job placement, retention and quality measures should be separately reported to choosers(presumably the 10% of the ratings assigned for contract compliance and provider risk rating will not interestchoosers, but who knows?).

Though in the star ratings, placement and retention are weighted at 70% and quality measures at 20%,disaggregating the ratings would allow service choosers to assign performance measures their own terms ofvalue. Some might base their decision entirely on the quality measure, others only on the job outcomesmeasure, while others will consider both in making a decision. There may be a risk that this approach has thepotential for choosers to select the provider they feel is least likely to get them into work. This indicates a needto test and monitor choice factors and their impact on provider caseload profile and ability to achieve outcomeson a level playing field of competition.

For whom and at what point does choice matter?

Then the Jobcentre said ‘You have to pass through New Deal.’ I said ‘What’s New Deal?’ They said ‘You have to goupstairs to sign. They are going to help you find work.’ I said ‘That’s nice,’ because I was looking for work everywhere.Westminster, Kensington and Chelsea New Deal client, London, 2005

Before I came I didn’t know anything about it. So, it was something completely new for me. I was just told [at the Jobcentre] you are at this stage and this is what you have to do now.Southwark Employment Zone client, 2006

If I worked in a Jobcentre, I would have said, it’s coming down to a time where you're going to have to go into anEmployment Zone. These are the three options. Go and see which one you like. That's how I would have done it.So at least you would have felt like you're more involved in the choice. Brent Employment Zone client, 2007

62 - John Hutton, ‘Economic inequality in public services’, Patrick Diamond (ed.) Public Matters: The renewal of the public realm, 2007.



Focus group discussions with mandatory Employment Zone clients reveal that at the point of Jobcentre Plusreferral to WorkDirections, the nature of the service to be provided was not always clear. This might have beenthe Jobcentre staff explanation or the Jobcentre referral letter, but it is in part a result of a lack of interest orwillingness to exercise a choice due to the mandated attendance requirement and threat of sanctions for non-compliance. For a significant number of clients, this is associated with mistrust of Jobcentre Plus processes orassistance, and the sense that they are being made to ‘jump through hoops’. In that context, differencesbetween providers are seen as merely theoretical; the offer of customer choice and its implied intention to putclients in the driving seat experienced as illusory, contradictory and without real value.

For clients at that point in the service cycle, choice can be a somewhat difficult proposition to sell. It is worthnoting, though, that for these mandatory clients the quality of subsequent service is very important, perhapsmore so, and these initially reluctant clients are in general quite willing to later praise the service, recognise itsadvantages, and feel more positive about being registered for assistance.

Voluntary clients (lone parents and people on Incapacity Benefit) who respond to advertising have a clearer andmore direct reason to be attracted to choosing. For those clients (many of whom are in any case clear aboutwanting to work) the offer of support combined with the financial benefits of working is a straightforwardmessage linked to the provider who has placed the advertisement.

A public policy academic, Keith Dowding, explores questions about choice in public services succinctly byasking what meaning the choices have for choosers. In some cases, the choice is between two essentiallysimilar things, a situation Dowding describes as a choice between a red car and a blue car63. This is areasonable way to characterise the choice offered between two competing Employment Zone providers.

For the 31% of multiple provider Employment Zone customers who have previously been through theprogramme, the choice of which colour of car to take for the journey is a fairly informed one, a point borne outby the data on reasons for choice of Employment Zone provider (see p.25).

However, for those unfamiliar with the journey planned, the choice is more difficult. The Employment Zoneprogramme, and its planned successor the Flexible New Deal, are by their nature somewhat difficultprogrammes from which to define service undertakings to customers, due to their emphasis on individuallytailored action plans based on discussion and agreement with personal advisors.

On their part, customers without previous experience of Employment Zones are sometimes choosing a serviceabout which they know comparatively little. Making an informed choice of provider requires knowledge aboutwhat a programme offers or undertakes to deliver. To the question ‘What will I get?’, an answer in the case ofEmployment Zones might be, quite reasonably, ‘That depends.’ In essence, the Government has contracted aservice which is a process, to identify needs and map a way forward to achieve employment. The criteria bywhich to choose a process are difficult to pin down.

To return to Dowding’s metaphor, this implies the need for ‘red car, blue car choosers’63 to take a test drive,both to understand what a car can do at all, as well as to distinguish the unique features of each.

63 - Keith Dowding and Peter John, The Value of Choice in Public Policy, unpublished paper, 2006.

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The point of choice can also be complicated, as mentioned earlier, by the requirement for mandated customersto attend. While some people have long waited for this more intensive assistance, for reluctant customers thechoices are not particularly meaningful, and are associated with previous negative service experiences, lowexpectations from future services and the risk of less initial engagement. It can be due to people’s concernsthat they may be pressured to apply for jobs they do not want, or the perception that they do not have the timefor this programme. These kinds of factors negatively impact on people’s interest in making a choice.

This implies the need for ‘red car, blue car choosers’ firstly to be invited to consider the benefits of workingand to be made clearly aware of the need to undertake the journey as a condition of receiving benefits. On thisbasis, the offer of a test drive is a chance to engage, and to learn their rights as well as their obligations.

The point is to avoid a situation where people unaware of what the mandated programme might do, and notpersuaded about the benefits of working, are forced to choose between unfamiliar modes of transport tounwanted destinations.

The Work for the Dole programme is relevant in this context. Though this programme provoked quite negativeinitial feelings among those compulsorily referred to it, Work for the Dole has reportedly been a positiveexperience for a surprising majority of participants. This is because it offers a choice of work experienceplacement options and, though unpaid, the work is perceived by programme participants to result incommunity benefit. Since the relevance of the unpaid work placements to future jobs is low, this cannot be anargument to expand the programme, but it does illustrate the positive impact of offering choice in an otherwiseno-choice scenario.

Dowding’s metaphor can be extended. Recognising that a choice between a red or a blue car (say twoEmployment Zone providers) is just one model for structuring choice, Dowding poses the introduction of a newchoice entity: the opportunity to take a train. In the case of welfare-to-work policy, this could in theory meanoffering a choice of some differently contracted provision altogether, perhaps a paid or unpaid work experienceplacement, or referral to a specialised industry placement service. Whether DWP should consider alternativemodes of transport is outside the scope of this paper, but it is suggested largely to illustrate the choice model.

Although the services available to help people get a job might not be clearly understood, and some people arereluctant to engage with the process of getting a job, this does not mean that the opportunity to choose fromcompeting providers is not valued and welcome. As the review of evidence to date for multiple providerEmployment Zones suggests, most customers are keen to exercise a choice and do so. The point is rather thatorientations to choice vary between groups and can change over time. This is underlined by very positiveexperiences of switching providers reported by lone parents on Employment Zones, who exercised this righteffectively and with considerable satisfaction (see p.25).

Who knows best?

We discover our preferences through a choice process. It is only by having a menu of alternatives {x, y, z}in the opportunity set that we discover that we prefer x to the others. Without the larger set we would notknow that it is x that we would choose. By having the opportunity to choose we can find out.Dowding and John, 200664

64 - Keith Dowding and Peter John, The Value of Choice in Public Policy, unpublished paper, 2006.



42

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43

Figure 6 illustrates some of the key choice points in welfare-to-work provision that were envisaged couldarise for people on Jobseeker’s Allowance at December 2007. It shows that system users have the capacityto exercise choices not only at the point of choosing a provider but, once referred, at the point ofconsidering options for sub-contracted provision. The diagram also illustrates that even in the case of amonopoly provider, people still have the opportunity to exercise choice about forms of subcontractedprovision.

This outline of contracted provision and service choice points raises questions about who knows best whatservice users will need. On one hand, the provider has considerable experience in working with unemployedpeople and placing them into jobs. On the other, the customer brings his or her needs, job and pay goals,and past history. Although, ideally, the personal advisor and the client review all options and choose thosebest suited to the client’s needs and job prospects, the options arrayed for consideration and advisors’recommendations are also likely to be influenced by:• Speed of likely job outcome resulting (the payment model and the performance ratings system rewarding

retention may affect advisor decision-making).• Amount of discretionary spend required.• Likelihood of a job outcome (return on ‘investment’, where discretionary spend would otherwise be

retained by provider).• The availability and comparative cost of in-house provision, which is likely to be an inherent ‘competitor’

with other potential sub-contractors, due to the economies of scale that this may offer.

In this scenario there are two ‘choosers’ – advisor and client – each with potentially different ways ofinterpreting and assessing customer value.

If Flexible New Deal is to be funded to achieve longer-term outcomes, it implies a little more scope to takea longer view of skills investment and ways to tackle multiple barriers to employment. With a funding modelto support other strategies besides a ‘work-first’ approach, the range of service options and correspondingchoices about sequences of service over time are expanded.

Given this, it is worth considering whether DWP would want to know if and how customers are informedabout their choices and involved in the process of making decisions about whether to take up in-house orsub-contracted provision. Should DWP know whether the journeys to employment are individually tailored orachieved through limited choice between bulk purchased sub-contractor services (since economies of scalewould apply to external provision too)?

Until outcomes data can throw light on how efficient market competition proves to be, and what impact thedifferent funding arrangements have, there is a question about the degree of interest DWP should take inthe different modes of transport to be offered to customers’ job destinations.

The following suggestions for contracting terms and tender assessment criteria are intended to recognise thedifferent material interests that might exist between providers and the individuals for whom they are fundedto achieve outcomes. Recognising the potential for such interests to differ, these suggestions are intendedto balance the nexus of power between them:• What account of customer entitlements and options for choice are reasonable, fair and deliverable.• What information should be made available to customers about their entitlements and options.



44

• How to support service and provision choices made by advisors and their clients (to the extent possible) by providing information about outcomes that have resulted.

• How to design (and to contract) the service so that there is a recognised process for further information and/or appeal if a customer wishes to review the provision to which they have been referred.

• How to ensure that DWP retains access to information about the forms of provision which have resulted in outcomes.

To borrow from the formulation of the social policy analyst and former Government advisor Julian Le Grand,there is a risk that the pursuit of financial self-interest by providers could result in what Le Grand terms‘knavish’ behaviour, with the attendant risk of creating service users as pawns of the system. Though Le Grand urges competition and choice to promote the empowerment of public service users, this becomesmore difficult to ensure at sub-contractor level and he acknowledges, in the context of mandated welfare-to-work programmes, the limitations on exit as a means to respond to unsatisfactory service.65

Le Grand suggests that a more attractive alternative is for individuals or their agents to be given fixedbudgets with which to purchase services from different providers, allowing them the choice of provider butrestraining them from demanding too much of the services concerned.66 This illustrates a market solutionthat can be contrasted with the more regulatory role for the Government implied in the suggestions madeabove to moderate potentially ‘knavish’ behaviour among providers.

My advisor was pushing me to go for jobs and I was not willing… She said ‘Why don't you try voluntary?’And at first I was like, sod off; you know, go away, I don't want nothing to do with voluntary because youdon't get paid. But she said just consider it. So I went to the voluntary service and got loads of places,and now I'm actually doing voluntary work twice a week. So far I would say that's helped me more thananything else. But like I said, before, I wouldn't have even considered voluntary work.Nottingham Employment Zone client, 2007

The market model, and the foregoing discussion, supposes that the person choosing is a) self-aware and b) able to make decisions in his or her own best interest. But Le Grand has noted the public policy concernthat ‘individuals may make wrong decisions about the best balance of present versus future consumptionbecause they are too short-sighted to take proper account of the future.’67 The American columnist Jim Holtalso asks ‘What if it could be shown that even highly competent, well-informed people fail to make choicesin their best interest?’68 Holt cites a study showing that most people, given a choice, will choose to do eighthours of irksome work two weeks later rather than seven hours today, and will defer again at the cost ofmore hours of work when the moment to do the work arrives.

Recognising that people can be unsure about what they think or want, or can be unable to delay presentgratification for future benefit has implications for incorporating choice in programme design. It is areminder that choosers may not be able to act as sovereign consumers even when this role may be bestowedupon them by the system. They may choose to be challenged more now for perceived future benefit, or theymay make a decision to remain as far as possible within a known ‘comfort zone’.

65 - Interview, Monday 30th July 2006. This brief reference does not do justice to the considerable work of Professor Le Grand on choice and competition in public services, and different motivations of the Government, commercial providers and users of the system.

66 - Julian Le Grand, Motivation, agency and public policy, OUP, 2003, p.84.67 - Julian Le Grand, p.88.68 - Jim Holt, ‘The new soft paternalism’, New York Times, 3rd December, 2006.



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Acknowledging that clients might have divided motivations and intermittent work commitment can informways that providers and clients agree to structure systems of sanction and reward, either to incorporateincentives to work, or to apply agreed-in-advance sanctions for non-attendance or for other undertakingsthat have not been met. That is, ‘You know what’s best for you, and we’ll help you to do it.’

To a degree, the knowledge that people are less likely to defer gratification or comfort for future gainauthorises the concept of mandating attendance at programmes, given that ‘before and after’ attitudes toprogramme benefit are capable of changing significantly over time. WorkDirections believes, though, andhas argued elsewhere, that mandated attendance requirements are best applied to the provision ofinformation and reviews of options with clients. This promotes engagement by emphasising the client’sultimate responsibility for choosing his or her own actions.69

Voice

‘Satisfied’ has a range of meanings to individuals.Ipsos MORI, 200270

[Public] service providers consistently told us that a lack of complaint means that service users must behappy with the service; but we did not have to press very hard before they admitted that there might beother reasons for users to keep quiet.National Consumer Council, 200771

A person might mark a provider’s satisfaction survey differently after a first meeting with their advisor, afterexperiencing a sanction for non-attendance, after getting a job, or upon exiting the programme without ajob. The same client might conceivably undergo all these experiences, and though it is possible to guessthat they might unfairly result in praise or blame for a provider, WorkDirections has not to date had accessto a sufficiently large sample of clients to test how much these kinds of events might impact on satisfaction.

For reasons of space it is not possible to undertake here a comprehensive review of methodologicalproblems in harvesting customer voice. A few general points made here are followed up in the concludingsection, which makes some suggestions for a further research agenda.

There is a need to recognise the different uses of customer surveys so that appropriate methodologicalrigour can be observed. The results of providers’ customer surveys might appear on websites, in annualreports, Ofsted reports, or tender submissions. Frequently, these are used to promote the standing of thecompany or the benefits of its services. While such surveys are within the responsibility and discretion ofdifferent providers to collect and report, companies are unlikely to publish results that do not look healthy,and most readers are unlikely to read the small print about the conditions of survey sampling and collectionconditions. In these circumstances, it is a case of ‘reader beware’ in interpreting survey results.

However, if customer satisfaction surveys are to be used to inform customers’ choice of provider, and/or areto be incorporated into star ratings, this would indicate an agreed provider survey instrument, administeredunder like conditions, and involving a representative sample from each provider.

69 - In work, better off: next steps to full employment: A Response From WorkDirections UK, October 2007. 70 - Measuring and understanding customer satisfaction, A MORI review for the Prime Minister’s Office of Public Services Reform, 2002, p.44.71 - National Consumer Council, Our say, 2007, p.3.



An example of an industry-agreed and developed instrument is The National Learner Satisfaction Survey.72 This isintended to gather learner feedback from all people undertaking Learning and Skills Council-funded study ortraining and involves a common survey instrument of nine questions for all types of learning provision. Responses tothe survey serve as a performance indicator for learning providers’ responsiveness to learning, and it is intended tohelp people make informed choices of learning provider.

Customer research with Jobcentre Plus customers in 2003 suggests that customers can accept that they may notget what they hoped for from the service, but they do expect basic standards of politeness, helpfulness andrespect.73 The research proposed in the next section could identify these kinds of essentials for contractedemployment services provision, as well as developing an understanding of what customers might recognise theycan’t reasonably expect from the service, such as responses from employers, or jobs meeting pay aspirations.

What is more difficult, but just as important in the context of future plans for contracted provision, would be toidentify satisfaction with specific aspects of contracted provision such as the consideration of options for an actionplan, discretionary spending, and on-referral processes and liaison with other providers. Separating these processesfrom a ‘satisfaction with service overall’ would help DWP to learn about the design of the system across agencies andproviders, the loci of potential irritants within it, and the enabling aspects of programme design and provider delivery.

Managing and regulating choice and competitionAs the only purchaser of welfare-to-work services, the Government must manage as well as foster the market itcreates to deliver those services. Though financial incentives are the primary drivers of the system, they cannot serveor set in motion all the forms of ‘good’ required by the Government. For purely financial reasons, providers may bepleased to lose unhappy or difficult clients, to ignore complaints, or fail to gather and respond to customer feedback.

This means that in addition to paying for outcomes the Government must take an interest in the collection ofcustomer feedback, instances of complaint and providers’ responses. It must establish a process for handlingunresolved disputes between clients and providers and establish the rules and conditions for exit from providers andtransfer to others. It is likely to involve risk assessment processes for poor provider performance, and a way toimprove performance.

This kind of role to be played by the Government can be characterised in three broad ways: by setting the rules andstating the requirements, by establishing review mechanisms and processes for contract management and thesettlement of concerns and disputes, or by bestowing relative advantage and reward on providers who might achieve‘above expected’ standards of customer service performance. Each of these forms of management and regulationwill find a place in the contracting framework, establishing whether providers qualify for a contract, for referrals, forclaiming payment, for contract continuation, or for more business.

The Government’s role complements and moderates the forces set in play by the financial incentives to achieveemployment outcomes. Rather than inhibiting or limiting providers, it clarifies what is expected of the terms ofrelationship between the citizen and the state that the Government is contracting providers to deliver. Benefitsclaimants represent the most economically and socially disadvantaged groups, and though the aspiration to promotechoice, autonomy and empowerment for them implicates a greater role for market competition, the relationshipbetween these citizens and the state cannot be entirely mediated by financial drivers.

72 - Learning and Skills Council at time of publication: http://readingroom.lsc.gov.uk/lsc/National/NLSS_2007_QUESTIONNAIRE_-_FINAL_070207.pdf73 - Colin Talbot et al, Jobcentre Plus customer service performance and delivery Research Report No 276, Department for Work and Pensions, 2005, p.16.

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The individual is conceived as the agent of their own interests – empowered within the collectiveframework of provision that constitutes the enabling state. The emphasis is on strengthening personalautonomy, interdependence and self-esteem.Public Sector Reform Group, 200774

Everybody likes choice. Lone parent client, Southwark, 2007

From a user’s point of view, the journey from unemployment to work is likely to involve service points at theJobcentre, with training providers, and with welfare-to-work services. How the employment and skills systemmeshes together to achieve employment and progression is critically important. Acknowledging that thereare separate funding streams and accountability that matter to the Government, the challenge will be topursue outcomes for unemployed people and learners, by gathering feedback about what matters to themand what works for them.

This concluding section makes recommendations about an agenda for further work to promote choice andvoice for users of welfare-to-work services. It is based on the following key features and aspirations of ajoined up employment and skills system, as described in two key papers of the DWP and the Department forInnovation, Universities and Skills:75

• A balance of rights and responsibilities for people on benefits. • A personalised and responsive approach to service design and delivery.• Longer-term contracting with the private and voluntary sectors for outcomes using best expertise.• The promotion of employer demand and a response to it with appropriately skilled workers.• The promotion of adult basic and vocational skills.• The engagement of generationally unemployed people, lone parents and people on IB/ESA.• Devolution of programme delivery and decision-making to regions and cities.

The following four areas provide a summary of the challenges for Government and make recommendationsin the areas of service design, system support, contracting strategy, and a research and evaluation agenda.All recommendations made are based on a belief that the welfare-to-work system can be fair, responsive andsensitive to individuals’ needs and circumstances, and that it can be firm at the points needed because it isclear about expectations of customers and accountable for service quality and the basis of decision-making.

The recommendations are also based on a belief that though people’s efforts to learn new skills and look for work are unpaid, this is a human resource being expended, sometimes for months and years withoutsuccess. For many people on benefits, long-term and sometimes life-long habits are being challenged andchanged, and these efforts must be recognised, supported and valued. Promoting more opportunities forvoice in the welfare-to-work system means sharing the work and experience of customers and frontline staff upwards, to managers, executive managers, policy makers and programme designers, whose jobsatisfaction and the human interest of their work will be significantly enhanced by making these simplehuman connections.

8. The future of UK welfare-to-work services

74 - Patrick Diamond (ed) Public Matters, 2007, p.6.75 - Ready for Work, Skilled for Work, Department for Innovation, Universities and Skills, January 2008, and Ready for Work, Department for Work and Pensions,

December 2007.

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1. Service design

Product development and testingThe 2007 Green Paper signalled the Government’s intention to achieve longer-term employment andretention outcomes through greater in-work support and investment in skills. The paper also proposes asystem to move people from self-help to more intense participation requirements as their claim goes on,and asks if this is fair. In this context, the concept of ‘product development’ is helpful, recognising that theintended beneficiaries of the system have a significant investment in the system themselves and areperhaps expert advisors about how it could best work. Clients could be consulted about:• The terms of contracting, to confirm the validity or test the value of employment retention and

progression outcomes as potentially defined, or at least to understand the degree to which they are relevant to people looking for work.

• Service design, in that intended beneficiaries of the system could ‘market test’ the proposed system against their self-identified needs and any concrete experience they have of the way the system currentlyoperates. This could involve mapping service journeys under the current system for comparison with the proposed new system, and could also include some market testing of the kinds of in-work service support that would be helpful (and the communication channels through which this might be delivered).

• The policy on the rights and responsibilities contract; not just in terms of reasonableness but how andwhen this can best be communicated to people on benefits.

Exploring people’s views about possible service models in prospect is less usual than the more typicalevaluation strategy of asking them about what they have experienced in the past. However, a retrospectivereview of previous programme experience, or focus group testing of future possible programme design basedonly on its principles can elide the problems and risks that might be inherent in operational delivery beingdesigned for the future. Experienced customers of the system could more readily identify those risks if givena more a concrete description of how the service would be thought to work.

Front of house service designThe term ‘front of house’ anticipates the system support to be discussed in the following section, and is auseful distinction to make as it separates what information ‘the system’ and its providers need from whatcustomers need from the service they encounter.

Modelling and scenario-testing of customer communication and interface considerations in a whole-of-system approach could involve:1. How to communicate with customers about: • The nature of the continuum they are on, and what this will look like over time; their responsibilities and

service options, and the consequences of choices now and in the future.• The functions of different agencies involved in possible client journeys.2. How to identify for customers the metrics of interest and value to them, whether: • Provider placement and retention success rates• Employment and/or income and/or retention success rates for:

o skills/qualificationso industry/occupation growth areas (current vacancy rates)o providers

• Customer experience and satisfaction ratings.

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The future of UK welfare-to-work services


2. Information system support

The role of information systems management is critical. A previous WorkDirections policy paper, Theperformance measurement of welfare-to-work programmes, makes a number of recommendations for morerigorous approaches to collecting client information, and for more support for real-time performance reporting.

In the context of this paper, it is clear that a seamless service for skills and welfare-to-work customerswould benefit enormously from improved information technology and management capacity. This would: • Ensure that the handovers and referrals associated with possibly complex choice paths are supported by

current and up-to-date records.• Support the keeping of customer information across providers and services, track progress and

achievements, outcomes and progression, and the need for in-work and follow-up support.• Support the collection of client feedback over time and help to relate satisfaction to services used.• Track discretionary spending.

Hypothetical journey mapping could model for key customer groups how the service would work, bybringing together ‘front of house’ service processes with the information systems to support them.

Client types• Lone parent whose child has turned 12.• JSA claimant – recent work experience and current skills.• JSA claimant – new claim and in the system for two years.• JSA claimant – in the system for eight years.

Service journey• Likely previous encounters with the system (baggage and background).• All encounters with staff, referrals and hand-offs between Jobcentre Plus, Adult Careers Service,

Jobcentre Plus personal advisors, Flexible New Deal, Flexible New Deal sub-contracted provision,employers, in-work support.

• Key information to be communicated at each point.• Key choices and options at each point.

System support• Information relevant to the client at each point of service: data entry and retrieval, action plan and

agreement. • Information the client might store on or retrieve from the system, such as a CV.• Responsibilities for data entry by agencies for different information fields.• Confidentiality and disclosure provisions.• Funding and performance targets relevant to each service point.

Risk review the journeys path for:• Confusion.• Client disengagement.• Service duplication.• Information decay/failure to enter.• Perverse or poor client service due to target structure and funding.

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3. Contracting strategy

Suggestions made in the previous two sections have implications for consideration of the contractingstrategy. Some research is outlined here that would help to inform the terms of Flexible New Deal contracts,and the contracts themselves should be reviewed to ensure that they take account of the intention of thesystem to support customer decision-making, empowerment and accountability.

Customer segmentationGiven the importance of clients’ previous work history and current job and pay aspirations, it would be usefulto conduct research into the feasibility of segmenting the customer base along these lines, as a way ofconsidering the implications for services and choice paths, including career guidance and skills, unpaid workexperience placement needs, and the possibility of employer-industry specialisation in service offerings.

Employment retention and progressionGiven that the current labour market generates so many short-term, part-time, and low-paid jobs, it wouldalso be helpful to relate customer segmentation to the likelihood of these kinds of outcomes, and toconsider customer views about the relevance and impact of vocational skills training, post-placementsupport, career planning, motivation and self-esteem, financial planning, or in-work financial incentives. This would contribute to the ability to separate client factors, employer/labour market factors and providerfactors where retention and progression are achieved. It might result, for example, in a customer role indeciding whether in-work support is welcome and helpful, and could also help to inform a reasonable basison which providers might legitimately claim longer-term outcome fees.

Provider choiceResearch into the choice factors in play in the process of choosing a provider, as well as a contracted sub-contractor, would help to inform:• The form of provider (and sub-contractor) performance information to be communicated to clients,

whether expressed in terms of employment placement and retention, industry/occupation and/or pay levels achieved, or by client satisfaction ratings.

• The extent to which market share could or should be client-determined.• How Jobcentre Plus and providers should communicate with and provide information to clients about

their options and choices.• The conditions under which clients can change a provider. This should be allowed where there is a

greater likelihood of a job outcome arising from a change, with monitoring of this provided for in the terms of contract.

Depending on the extent to which provider financial viability and profitability rely on client choice, thecompetition between providers might be strong. This implies the need to strike an appropriate balancebetween provider self-generated marketing and communications, and a role for Jobcentre Plus to distributeand discuss the material with clients.

Performance measurementIt is possible that flows of programme starts based on clients’ choices will lead to different types ofcaseload composition, or to distortions of starts-to-placement ratios month-to-month. This could make thecomparison of provider performance more difficult, and a fair basis of like-for-like comparison would need tobe determined.

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Client-centred decision-makingThe multiple provider Employment Zone review pointed to some changing orientations of providers over timein spending patterns, and a tendency to reduce investments in clients over the life of contracts.76

Contractual terms for Flexible New Deal might include some procedural guidelines for ensuring that a fairrange of clients’ options are communicated by advisors, and a way of checking that they are.

Customer feedbackWith a greater emphasis on accountability to service users, contracts should address the terms on whichproviders will collect and report on client feedback. This will require consideration of the function ofsatisfaction measures in performance measurement. For example, should it be to arrive at a ‘good enough’threshold minimum standard to be met by providers, or should it be expressed as a relative measure ofprovider success? Other considerations include:• Whether an independent agency should collect and report feedback on providers.• Whether and how satisfaction between lead and sub-contractors can be meaningfully understood and

attributed by clients. • Where unhappy customers go to complain and how complaints information is recorded and used?

Figure 7 illustrates how choice might work in a competitive market, and is one example of how competition andregulation might be balanced to reward providers with higher business levels based on customer satisfaction.

QUALITY STANDARDS

Measures include customer satisfaction

scoring

Quality standard qualifies provider for payment of fees (and share of referrals from

non-choosers)

Choosers use star ratings and customer

scores to self-refer to a provider up to a % extra capacity of

market share

DWP DISCRETIONARY

SPENDOpen accounting

DIUSSKILLS ££

OUTCOME FEESStaged fees, higher for

the harder to help

FUTURE BUSINESS based on outcome quality measures

Star ratings focus on outcomes information

76 - Rita Griffiths and Stuart Durkin, Synthesising the evidence on Employment Zones, 2007.

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Principles of this system1. The Government contracts and quality

assures good enough providers 2. Customers choose based on

information relevant to them.3. Providers are paid by

results and...4. ...rewarded with more business by

achieving better results

Figure 7 - Choice and voice in competitive provision



4. Research and evaluation

This research agenda for the DWP is suggested to inform the terms of Flexible New Deal contracts.

Research on choice1. The kinds of choices that would be – or are - most meaningful for clients, whether at:• Provider level (as in the case of multiple provider Employment Zones), or• Service level (as in the EZ Action Plan concept or other structured pathways such as skills training and

work experience).2. The kinds of client groups that may be more or less likely to exercise choice (for example, according to

whether they are voluntary or mandatory, have previously been referred to contracted provision, do not speak English as a native language, or have low levels of education).

For those interested in choosing a provider, the provider features that would be important to them. For example:• Employment outcomes record, including sustainability over a period of 6-12 months.• Customer satisfaction ratings.• Visits to providers.• Location convenience.• Specialisation of service for user groups, e.g. EFL, people with health conditions, lone parents, claimed

industry specialisation or links (e.g. transport, retail, hospitality, social care).• Marketing pitch by providers.• Timing of the exercise of choice, e.g. up-front, following poor service experience, or after a period (or

number of job applications) without success in finding a job.

For those interested in choosing services, the aspects of service design over which it is important to exercisechoice. For example:• Type or mix of pathways: job search skills, basic skills, work experience, occupational rehabilitation.• Choice of advisor, perhaps according to specialty by client group (e.g. Incapacity Benefit or Income

Support recipients, but also perhaps by advisors that have experience in placing older workers, orspecialised industry knowledge).

Research on voiceOnce Flexible New Deal contracts are implemented (and as part of their terms), a large-scale, long-termresearch project is suggested, better to understand the relationship between satisfaction and outcomefactors, as well as the types of services used and considered beneficial.

The large scale is needed to determine the extent to which differences of service provider or provision mightimpact on satisfaction and outcomes. This is clearly a large and ambitious research agenda but in view ofthe cost to the Government of benefit dependency and welfare-to-work programmes, it can be justified.

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This research can also reveal the extent to which satisfaction factors are related to ‘journey’ experiences(such as respect and friendliness) or to ‘destination’ outcome (a job or moving closer to a job). Satisfaction factors to be explored and tested include:• Flexible New Deal and sub-contracted providers.• Type of service being provided.• Mandated/voluntary status and sanctions.• Advisor.• Levels of client expenditure.• Job aspirations (level of salary, industry/occupation).• Expectations arising from previous experiences of employment services.• Extent of job search activity/numbers of jobs applied for.• Point on programme and duration on programme (to test for changing satisfaction over time).

Outcome factors to be explored and tested include:• Job placement (level of salary, industry/occupation).• Retention and progression.• Perception of future employment prospects.

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Appendix 1 - WorkDirections UK client survey

WorkDirections UK client survey questions

These are they key satisfaction/experience related questions only. The complete survey also includesquestions about age, benefit type and duration, ethnic background, programme type, time registered withWorkDirections, indicative frequency of attendance, and time since last paid employment.

Overall service ratingOn the whole, how would you rate the level of service you have received from WorkDirections?- Excellent- Very good- Fairly good- Neither good nor poor- Fairly poor- Very poor- Terrible

Importance of aspects of the serviceHow important are these to you?• Advice about job-related skills training• Help with transport costs • Access to computers to look for jobs• Working out if you'd be financially better-off in work• Advisor suggestions about vacancies to apply for• Advisor help with your CV • Working out a job goal • Advisor help with your job applications• Fax, photocopying, phones• Advisor help to prepare for job interviews• Advisor talks to employers for you• Help with licenses or accreditation• Learning to use the internet to look for jobs• Finding out about how to look for vacancies

- Very important - Fairly important - Not very important - Not at all important - Don't know

Satisfaction with those aspects of the serviceHow do you rate these different aspects of the service?• Advice about job-related skills training• Help with transport costs • Access to computers to look for jobs• Working out if you'd be financially better-off in work

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• Advisor suggestions about vacancies to apply for• Advisor help with your CV • Working out a job goal • Advisor help with your job applications• Fax, photocopying, phones• Advisor help to prepare for job interviews• Advisor talks to employers for you• Help with licenses or accreditation• Learning to use the internet to look for jobs• Finding out about how to look for vacancies

- Excellent - Very good - Fairly good- Neither good nor poor- Fairly poor - Very poor - Terrible- I don't use this service

What difference the service has madeTo what extent do you agree or disagree with the following statements about the service provided byWorkDirections?• I am more confident about being able to get a job• I am more motivated to look for work• I know more about how to look for job vacancies• I know more about how to apply for jobs• The paperwork in my life is more organised• I have improved my CV• I am more clear about jobs that would be suitable for me• I am making more job applications

And, if relevant…• I am better informed about my housing benefit entitlement• I am better informed about how to manage childcare• I am better informed about how to manage my health condition in employment

- Strongly agree - Tend to agree- Neither agree nor disagree- Tend to disagree - Strongly disagree



Service expectationsDid you have any ideas or expectations about WorkDirections service before you came? - Yes- No

If you answered yes to the previous question, has the service from WorkDirections met your expectations?- Better than expected- Same as expected- Worse than expected

Willingness to recommendWould you recommend WorkDirections to someone else who is on benefits and looking for work?- Yes- No- Maybe

Other commentsPlease use this space to tell WorkDirections about:• A service experience that has been satisfactory or unsatisfactory• What you think would help to improve the service.

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Appendix 1 - WorkDirections UK client survey


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Key words identified in WorkDirections UK focus groups 2006-2007

A good service is: • Helpful• Positive • Great • Doing all the right things• Best thing that happened to me • Professional• Treat you like a person• Encouragement• Respect• My advisor does whatever it takes• Feel welcome• Brilliant• Patient• Supportive• Efficient• Like a friend • Like somebody I’ve always known• Always there• Well mannered • Doesn’t judge me• Always asks my opinion• Constructive criticism in a positive way

A poor service is: • Patronising• Negative• Useless, absolutely useless• People yelling and angry• You’re looked down on• No respect• Not concerned• Depressing• Pushes me about• I can’t look for a job on my own, even though I’m trying• Making me lazy

Appendix 2 - WorkDirections UK focus group findings



WorkDirections and the Ingeus Group of Companies

WorkDirections is a member of the international Ingeus Group of Companies which provideshighly effective welfare-to-work services. The Group, which has been operating since 1989,runs employment programmes in the UK, France and Germany.

WorkDirections produces original research, responses to government consultations and businessdevelopment activity in the countries in which we operate.

• Launched in the UK in November 2002, WorkDirections supports socially excluded and disadvantagedindividuals to find suitable and sustainable employment.

• Our welfare-to-work operations assist people who have become long-term unemployed, as well as singleparents, and those who are not working as a result of health issues.

• WorkDirections UK is delivering six three-year Pathways to Work programmes from December 2007which will allow us to support over 98,000 Incapacity Benefit claimants in the London, Birmingham,Nottinghamshire and Edinburgh areas. In Birmingham, the Pathways to Work programme replaced ourNew Deal for Disabled People programme which we ran for over three years.

• We also deliver Private Sector Led New Deal programmes in Central and West London, and EmploymentZones in Nottingham, Birmingham, Brent, Haringey and Southwark.

• In spring 2008, we were awarded contracts to deliver the New Deal for Disabled People programme inDorset and Somerset, as well as programmes funded by the European Social Fund in Central Londonand Lambeth, Southwark and Wandsworth, and a programme funded by the Tower Hamlets Primary Care Trust.

For more information about any of the issues raised in this paper, please contact:

Jane MansourDirector, Ingeus Centre for Policy and [email protected]

The Registry3 Royal Mint CourtLondonEC3N 4QNUnited Kingdom

Tel: +44 (0)20 7265 3000


Ingeus Centre for Policy and Research, June 2008

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June 2008

Choice and voice in welfare reform


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