Rose Conway-Walsh challenges local employment service tender
Rose Conway-Walsh challenged the minister over the Department's request for tender for local employment services, arguing the procurement risks local provision and staff. She pressed the minister on the data behind the decision, the payment model and the future of long-standing centres for the unemployed.
Tender content and payment model
The minister defended the request for tender published on the 26th of May as client-focused rather than profit-focused, saying it expands services into seven counties that currently do not have a local employment service. The minister outlined a payment model of up-front fees - 45% on client referral, 45% when a client signs a plan, and a final 10% on job outcomes - and said about 90% of fees are based on client service with only 10% tied to outcomes.
Data and the Indicon report
Rose Conway-Walsh questioned the Indicon report cited as the basis for decisions, saying the data appeared inaccurate. She gave examples from Mayo - disputing a figure of 65 pathways-to-work referrals in 2016 and asserting it was 650, and contesting a reported 5% attendance rate by saying attendance was 80-90% - and argued the analysis should use multiple years rather than a single year.
Staff protections and community centres
She demanded clarity on protections for current Local Employment Service staff if contracts are lost, asking about transfer of undertakings, redundancy plans, lease and contract liabilities and disposal of assets technically belonging to the Department. She expressed being "appalled" at the planned closures of two Mayo centres for the unemployed that have operated for 35 years with voluntary support.
Administration, funding rationale and procurement process
The minister said the current cost-based funding approach creates an administrative burden and does not reward high-quality or innovative providers, and described the new approach as reducing that burden and encouraging innovation. The procurement process invites tenderers to demonstrate how they will deliver quality employment services with a focus on community linkages, and the minister said the tender resulted from extensive consultation with the sector and external consultants.
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Goera Magath, Laskahirlechen, Minister, on the outset I do want to acknowledge the great work done by the Department of Social Protection and those people working on the ground and the monumental task that they had ahead of them to try and meet the demand for PUP and for the other payments. But I want to go back to talking about the local employment service. I believe you are making a monumental mistake here and I need to ask you some specific questions around that, Minister. Thank you Deputy Conway Walsh for raising this matter. It is wrong to look at the tender published on the 26th of May as profit focused. That is the first thing I want to say. It is absolutely client focused with a strong focus on local services, community linkages and client service levels and outcomes. It is expanding service provision into seven counties which currently do not have a local employment service. About 90% of the fees to be paid under the contract are based on client service rather than outcomes. So the outcome fee is an additional payment which is about 10%. The evaluation criteria are heavily weighted towards client service and community linkages. Finally, the request for tender published on the 26th of May is the product of an extensive process involving lengthy consultation with the sector and the engagement of external consultants. The current cost-met funding approach used with existing local employment services and job club contracts involves scrutiny of all day-to-day expenditure placing a non-due administrative burden on both the provider and my department. The current cost-meting services is a non-due service is a non-due service. It does not enhance employment outcomes for the clients of the service and it does not recognise or reward in any way high quality innovative providers. We have some really good providers and we have others who are not so good. Moving to a new funding approach which pays for each client referred coupled with a strong emphasis on community linkages and quality of service provision will reduce the administrative burden, encourage innovation and is more likely to deliver enhanced outcomes for those availing of the service. The procurement process now under way invites tenderers to demonstrate how they can best provide a quality employment service, giving them the scope to demonstrate their expertise and we know they have expertise, their professionalism and their commitment, which is not in doubt. Thanks Minister Deputy Conway Walsh. Minister, just a couple of things. First, I want to question the Indicon report. That is a public document now and that was the basis for the decision that was to be made here. I believe there is an alternative to this decision making in spite of what has been said around the EU Directive. But we have to question the data and the statistical information. I believe the data is inaccurate. If we give Mayo for instance, it was cited that there were 65 pathways to work referrals in 2016 when there were actually 650. The other thing I would ask you is why is it only based on one year when most of the decisions around would be based on multiple years because the referrals quadrupled. We know in recent times. Also it was said that there was 5% attendance when in fact there was 80 to 90% attendance in the Mayo region as well. So I want to question the basis for the decisions that are being made. I want to know how much will the providers be required to have as reserves? What is the financial capital required by the companies for this for tendering? Thank you Deputy. Well first of all can I just say they won't need reserves because they are going to get their payment up front. The payment will, whenever a client is referred to the local employment service and these, and now just to say once again we are expanding these services under the first phase of the request for tender. So we are putting it into areas that don't have this employment service currently. So the first thing is when a customer or a client is referred to the local employment services from the intro office, they immediately get a 45% payment. So that means that they have the money to focus on the client. The second, when the client then signs up to a plan, they get the next 45% of the payment up front. So when they want to sign, so they have that money to help the client look for a job and to support them in every way they can. The final 10% is paid to them when they get a job. So this is actually, it is up front payments and again it is totally focused on the client. Thank you Minister. And I think that is the most important issue here. Thank you Minister. We are actually running into leave this time so I just ask you to be brief and I know Deputy Clary wants to come in. Thank you for that Minister. I think that is very important that organisations would not be excluded on the basis that they did not have the financial capital. I want to know, will those who are currently employed in the LES services once the new contracts are in place? So if a group of LESs miss out on this contract for whatever reason and in the tendering process, will they be protected? Will there be a transfer of undertakings for the staff there to ensure the job security for the existing staff? What plans are in place for any redundancies that have to be made? Any lease agreements that have to be broken? Any contracts with service providers and the disposal of assets around that? Because that will technically belong to the department. So what plans do you have in place for that? I need to say as well Minister, I am absolutely appalled by the treatment for the centres for the unemployed. We have two centres for the unemployed in Mayo that have been operating for 35 years with enormous voluntary work done there. Thank you Deputy. And they are being closed down and I think it is the wrong time to close them down. And just to say regarding Deputy Conway Walsh raised the issue of redundancies. It is the case that the local development company are the employers here. I would hope that the providers can come together and work collaboratively as well. Because as I said and I will say it again, the client is the number one person here. It is the person that needs the support to get back to work.
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