Welfare Reform Bill

I was coming to that. I will respond in detail to the letter that the noble Baroness has sent to me. Clearly, if people are not complying with their contracts, they can be terminated. I shall come to the monitoring arrangements in a moment. New Section 2G will allow contracted organisations, where appropriate, to deliver work-related conditionality to lone parents and partners of certain benefit recipients on behalf of the Secretary of State. The clause also provides that decisions made by such contractors will be treated as if they were made by the Secretary of State. That will ensure that people required to participate in the new arrangements will have the normal rights of appeal, even when decisions have been made by outside providers. I am sure that all noble Lords who have spoken will be reassured by that. There is no intention to use external providers as a means of bypassing those rights. This will mean, for example, that a claimant will be able to appeal a decision concerning attendance at a work-focused interview or work-related activities contained in an action plan, or a direction that is unreasonable or inappropriate. As with current contracting practice, if there is an appeal it would be referred to and dealt with by Jobcentre Plus. I can assure noble Lords that this clause is not about the privatisation of Jobcentre Plus. Jobcentre Plus remains at the heart of our strategy to deal with the economic downturn, and, longer term, to ensure that everybody has the support they need to find sustained work. It has been an important part of our welfare-to-work activities since the start of New Deal in 1997, as evidenced by the extra resources that were made available in the Budget of this year and the Pre-Budget Report of last year to make sure it is able to play its full part in these programmes. External providers bring specialist knowledge, experience and skills. We wish to draw on their expertise wherever possible, but we want to do so in a fair and responsible way that will protect the right of individuals to appeal decisions. I turn first to Amendment 60, tabled by the noble Lord, Lord Skelmersdale. This probes the extent of the functions that may be exercised by a contractor on behalf of the Secretary of State, and our intentions with respect to subcontracting. Functions to be exercised stop short of decisions about benefit entitlement or sanctions, which are always made by the Secretary of State. The Bill does not alter our current practice on the use of subcontractors. It is for the department to include provision for subcontracting in the prime contracts that it awards, with the consent of the Secretary of State. That is the route in to subcontracting. Under the principles of the department’s commissioning strategy, prime contractors are expected to ensure that DWP provision is joined up with local partnership arrangements. They are expected to work proactively with smaller, specialist providers and subcontract to them, where appropriate. Also, to ensure that the system operates effectively, the commissioning strategy includes a code of conduct, which spells out the key values and principles of behaviour for providers as well as the responsibilities of the prime contractors. It states that the development of smaller sub-contracted providers will be supported and encouraged by prime contractors, and that they should provide a level of extra support for new entrants into the market. All providers will be expected to operate in accordance with the code. That is our policy. However, Amendment 60 would give a main contractor the unrestricted power to subcontract. The Secretary of State would be relinquishing to a contractor her authority to determine who carries out the relevant functions, and could lead to the department not knowing which contractor was performing these functions. I do not think that that is the noble Lord’s intention, and I would therefore ask him to withdraw the amendment. Amendment 61, again tabled by the noble Lord, Lord Skelmersdale, turns on the question of the relationship between the provisions of legislation and those in specific contracts. It also seeks reassurances about provisions which would appear, on the face of it, to put contractors in an invidious position by denying them legal certainty about when a contract may be terminated. Contractors are required to provide a minimum level of support to all customers referred to them. The noble Baroness, Lady Meacher, was particularly concerned in that area. We do not specify the process for dealing with our different customer groups beyond a minimum necessary to ensure that they are preparing for work. However, as part of the contract management process, we do monitor quality of service and outcomes of our customers. Providers are expected to use their skills, knowledge and expertise to achieve positive outcomes for all their customers. To ensure that this happens, the department has a formal contract management process, which is designed to ensure that contractors meet the quality and delivery standards set out in the contract specification for all those they deal with. In addition, external inspection—for example, by Ofsted or Estyn—and validation will ensure the quality and accuracy of their activities if the provider also delivered training. DWP contract managers also use a risk-based approach to target resources at those providers that are deemed as high risk, conducting more frequent face-to-face reviews concentrating on performance and quality of provision. If a provider is not meeting the required contractual performance this would be dealt with through our existing contract management processes. In the first instance, we would seek to agree a performance improvement plan with the contractor. If this does not work and performance fails to improve, we would consider terminating the contract. In these cases we may tie the improvement plan into the notice period specified by the contract. In normal circumstances, contracts may be terminated giving the agreed notice as stated in the contract.