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Employment Schemes

Dáil Éireann Debate, Thursday - 1 July 2021

Thursday, 1 July 2021

Questions (102)

Claire Kerrane

Question:

102. Deputy Claire Kerrane asked the Minister for Social Protection the reason she is proposing a move away from the not-for-profit model which currently exists for contracted employment services, local employment services and job clubs to a payment-by-results model as per the recent tender launched by her Department; and if she will make a statement on the matter. [35200/21]

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Oral answers (6 contributions)

Why has the Minister decided to move away from the not-for-profit model of local employment services and job clubs to a payment-by-results model in the recently launched tender? Was that based on the conclusions of the external report carried out on job activation and contracted services within the Department of Social Protection?

I thank the Deputy for raising this issue. As she will be aware, most of the contracts for local employment services have been in place since the 1990s and have simply been rolled over on an annual basis. Good governance and public procurement rules require that my Department does not continue the existing process of simply rolling over contracts for employment services. As a first step in moving to a procurement approach that complies with all of the necessary standards, the Department recently issued a request for tender expanding employment services into seven counties across the north west and midlands where a local employment scheme, LES, does not currently exist. It is wrong to look at this tender as a move away from a not-for-profit model to a payment-by-results model. It is absolutely client-focused, with a strong focus on local services, community linkages and client service levels and outcomes. As I have said, it is expanding service provision into seven counties that currently do not have a local employment service. Approximately 90% of the fees to be paid under the contract are based on client service rather than outcomes. The outcome fee is an additional payment.

The request for tender published on 26 May is the product of an extensive process involving lengthy consultation with the sector and the engagement of external consultants. I am satisfied that the approach being taken balances the need for high standards of procurement with our shared concern to ensure the service delivers for our clients. I believe the Department's current providers, such as the LES and job clubs, are well positioned to respond to the tender. Tenders will be evaluated on the basis of quality and the ability of an organisation to access a wide range of supports and services to best meet the specific needs of their clients. There is a limited cost element in the request for tender but it is within defined parameters. The vast majority of the awarding criteria will be determined by the quality of service design, as well as links to the relevant local partners and stakeholders.

I understand the expansion is into areas where there are no local employment services and, of course, it is welcome but only if it is to remain in its current model. The Minister can say it as many times as she wants, but it is a fact that the current model is not for profit. Money is not a factor when a person comes through the door of the services for referral, but it is moving to a payment-by-results model. That is a fact.

As regards consultation, I acknowledge it took place but I very much doubt that job clubs or LES sought a model change or a change to payment by results during any of the consultation periods. Of course, this will be particularly difficult in rural counties where the jobs just are not there to place a person in straight away. How much money is required by the likes of an LES or a job club even coming together to go into this tender? Although quality might be important, they cannot enter the process without money. How much will it cost them?

I assure the Deputy that there is no privatisation happening and it is wrong to say there is. The vast majority of marks in the request for tender, that is, more than 75% of them, are based on the quality of the service and the experience and track record of the tenderers in providing supports to those furthest from the labour market. I have spoken to several local providers that have seen the request for tender and think it is fair. What is more, they are confident in their ability to put together good bids for these contracts. Those providing a good service should be confident.

As regards consultation, my Department has engaged with all the relevant stakeholders, including the Irish Local Development Network, ILDN, and has briefed them on our procurement plans. All concerned have known for some time that this was coming. My predecessor as Minister, Senator Regina Doherty, met the ILDN at its annual meeting in 2018 and told it the contracts were in breach of procurement rules and would have to go to tender. I have no choice but to put this out to tender.

I am not arguing that point. How much money will an LES or job club need in order to bid for the tender? What I am hearing is that it is a significant tender and the organisations will need some kind of tendering consultant to try to match it and put in an application in the first place. I am really concerned about this. It is fine to say they are well positioned to apply for it but it will be very interesting to see how many do so because what the Minister has outlined is not what I am hearing on the ground. I have met many LES staff and job clubs throughout the country in recent weeks and they believe they are not in a position to tender. To me, that is very serious.

I am concerned about the end of walk-ins. All present should be concerned about that. As regards the payment-by-results model, I ask the Minister to consider JobPath, with more than €93 million of taxpayers' money paid to Turas Nua and Seetec in referral fees just for getting a person to sign on. They received individual payments of €311, totalling €93 million. That is a significant amount of money. Today, 24,000 people out of nearly 300,000 people referred have maintained a job for more than a year. It has not worked.

There has been extensive consultation with every provider across the country. We are now expanding this service. This is the first phase of that. We went through it with the providers before the request for tender went out. There has been a lot of explanation and I do not understand why the providers will have to employ a person to put in the requests for tender because they should have a good idea as to what they need to do at this stage. They should be confident in terms of the service delivery they provide. We are considering the quality of the local service. A significant amount of work has gone into this. As the Deputy is aware, I do not have a choice and I have to put this out for tender. We have put a strong focus on local service and the providers' connections with the local community. There is no reason providers cannot be successful in the tender.

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