Employment Service (Hansard, 17 June 1996)

§ Mr. Forth

Responsibility for the subject of the questions has been delegated to the Employment Service agency under its chief executive. I have asked him to arrange for a reply to be given.

Letter from Mike Fogden to Mr. Dale Campbell-Savours, dated 17 June 1996: The Secretary of State has asked me to reply to your Parliamentary Question about the privatisation of placing, assessment and counselling teams, local occupational psychology services and Ability Development Centres. As all of these relate to the market testing programme and to disability services, this letter seeks to respond to all three questions. As a Next Steps Agency, the Employment Services (ES), is subject to systematic and periodic examination in the form of a Prior Options Review. This review, conducted in early 1995 examined all of the services provided by ES including the feasibility of abolition, privatisation, strategic contracting out and, where these were rejected, market testing or the maintenance of current arrangements. Following the review, the then Secretary of State announced via a written Parliamentary Question that the services delivered by placing, assessment and counselling teams (PACTS) should be market tested in one or two ES regions on a pilot basis. 317W Market testing is a means of identifying whether the private sector can take forward work currently undertaken by the public sector at better value for money. This is done by allowing a team drawn from within the in-house service to compete with private sector bidders for the contract to do the work. Privatisation on the other hand entails a firm decision that the service should no longer be undertaken by the public sector, but should be contracted directly with the private sector. In this case we are clearly engaged in a market test, not a privatisation. As a consequence of preliminary research into how the Secretary of State's recommendations could be taken forward, ES senior managers decided that the market test should cover the whole of the ES Disability Service within the North West region. This includes the services provided within the Ability Development Centre (ADC) and the local occupational psychology service in addition to the PACTs service. This decision was taken to ensure that ES clients would continue to receive fully integrated service and would not suffer any disadvantage as a result of how the market test had been packaged. The market test was advertised in the "Disability Now" publication, and various national papers. As a consequence expressions of interest were received from private and voluntary sector organisations and also one from a team representing the in-house service. Organisations (including the in-house service provider) who wish to pursue their interest further have been asked to send an outline of how they would propose to deliver the Disability Service in the North West region, to ES by 28 June 1996. These proposals will be evaluated and shortlisted during July, with the aim of negotiating the detailed delivery proposals with the shortlisted organisations throughout the autumn. Final decisions on the outcome of the market test and the award of contract/service level agreement are planned for April/May 1997. Local Occupational Psychology Services (LOPS) in each of the ES regions were subjected to market testing in 1994. In each case the in-house service providers were successful. Our decision, noted above, to market test the whole of the North West Disability Services has resulted in the LOP services in North West being included in that test. Except for that region, our plans are that these services will continue to be delivered under the present arrangements for the full duration of the current service level agreements. These are scheduled to run until September 1999. This year we asked consultants to undertake a review of the functions of Ability Development Centres (ADCs) and how they were delivered. The review concluded that all the functions of ADCs should continue to be carried out. However, it also made a number of recommendations to allow them to be delivered more flexibly and improve their effectiveness. Senior management in ES accepted the recommendations and is currently considering how best to implement them. Within North West region, since ADC functions are within the scope of the market test, the way in which these functions will be carried out here in the future will depend on the outcome of the test. I hope this is helpful.