Title Page
Contents
Acknowledgements 9
The Authors 10
Abbreviations 11
Summary 13
1. Background 27
1.1. Introduction 27
1.2. Background to the study trip 27
1.3. Strategic and policy context 28
1.3.1. Development of welfare to work in Great Britain 28
1.3.2. The DWP Commissioning Strategy 33
1.3.3. Political leadership 33
1.4. Welfare to work in the United States 34
1.4.1. Introduction 34
1.4.2. New York City's experience of welfare to work since 1996 35
1.5. Terms of reference 36
1.6. Approach 37
1.7. Scope and structure of the report 37
2. Welfare to work in the US 39
2.1. Introduction 39
2.2. Socio-economic context 39
2.2.1. Overview 39
2.2.2. The US labour force of the 1990s 40
2.2.3. Unemployment 41
2.3. Legislative overview 42
2.3.1. Overview 42
2.3.6. What next for welfare reform? 43
2.4. Funding 43
2.4.1. Funding streams and structure 43
2.4.2. The impact of funding structures: devolved control 44
2.4.3. The impact of funding structures: reorganised service delivery 45
2.4.4. The impact of funding structures: driving innovation, stifling coordination 46
2.5. Evaluating welfare reform 47
2.6. US welfare reform: successes and challenges 49
2.6.1. Successes 49
2.6.2. Challenges 50
2.7. Conclusion 51
2.7.1. Key US-GB differences 51
2.7.2. Key findings 52
3. The New York City welfare to work market 53
3.1. Introduction 53
3.2. Welfare levels and work requirements 53
3.2.1. Welfare levels and changes 53
3.2.2. Benefit entitlements 54
3.2.3. Work participation requirements 56
3.3. Implementing welfare reform 56
3.3.1. Introduction 56
3.3.2. Overview 56
3.3.3. Operational and administrative changes 57
3.4. Programme design and delivery 58
3.4.1. Design and delivery models 58
3.4.2. Innovation, client choice and standards of service 60
3.5. Conclusion 60
3.5.1. Key US-GB differences 60
3.5.2. Key findings 61
4. Commissioning and managing the market 63
4.1. Introduction 63
4.2. The commissioning approach and process 63
4.2.1. The commissioning approach 63
4.2.2. The commissioning process 64
4.2.3. Commissioning vocational rehabilitation services 65
4.2.4. Commissioning back to work services 66
4.3. Market dynamics 67
4.3.1. Managing the market 67
4.3.2. Relationships within the market 67
4.3.3. Competition for contracts 68
4.3.4. Sub contracting within the market 68
4.4. Impact on the supply chain 69
4.5. Benefits and risks: evidence from NYC 71
4.5.1. The benefits of performance-based contracting 71
4.5.2. The risks of performance based contracting 71
4.6. Conclusion 73
4.6.1. Key US-GB differences 73
4.6.2. Key findings 73
5. Contract and performance management 75
5.1. Introduction 75
5.2. Key performance indicators 75
5.3. Data collection 78
5.3.1. Introduction 78
5.3.2. Using outcome data for reporting purposes 78
5.3.3. Accessing timely outcome data to monitor and manage performance 79
5.3.4. Using outcome data to drive competitive performance in the market 79
5.3.5. Going beyond contractual requirements 79
5.4. 'Hands on' contract management 80
5.4.1. On-site presence 80
5.4.2. VendorStat: continuous performance monitoring 80
5.5. Evaluation and knowledge sharing 80
5.5.1. Introduction 80
5.5.2. Evaluation 81
5.5.3. Knowledge sharing 82
5.6. Driving performance: targets, incentives and sanctions 83
5.6.1. Using targets to drive performance 83
5.6.2. Shaping performance through incentives and sanctions 83
5.7. Mitigating the risks of performance-based commissioning 84
5.7.1. Introduction 84
5.7.2. Outcome-related risks 84
5.7.3. Market-related risks 84
5.7.4. Client-related risks 86
5.8. Conclusion 86
5.8.1. Key US-GB differences 86
5.8.2. Key findings 87
6. Conclusions and lessons learned 89
6.1. Introduction 89
6.2. Shifting the public mindset 89
6.3. Stewarding the market 91
6.4. Monitoring and managing performance robustly 92
6.5. Understanding the client journey and experience 93
6.6. Developing management information systems 94
6.7. Generating and disseminating knowledge of 'what works' 95
6.8. Conclusion 96
Appendix 97
Appendix A. Interviewees 97
Appendix B. Topic guide 101
Appendix C. Additional information 109
References 121
Table 1.1. Summary of welfare to work policy developments 30
Table 1.2. Summary of British welfare to work service developments 32
Table 1.3. Key research questions 36
Table 2.1. Overview of US welfare to work legislation 42
Table 2.2. Overview of US welfare funding streams 44
Table 5.1. Overview of performance indicators 76
Figure 1.1. Overview of approach 37
Figure 2.1. Overview of US unemployment rate 1990 - 2000 41
Figure 2.2. US welfare reform: successes 50
Figure 2.3. US welfare reform: challenges 51
Figure 3.1. Overview of NYC unemployment 1994-2008 54