Funding the three step model

1
Funding the three step model

• Richard Judge Director Finance Projects Serco
  Civil Government
• Sean Williams Development Director Serco W2W
• CESI Welfare to Work Conference 2009

2
The challenge

• How to create a funding model that supports both
  Jobseekers furthest from and closest to
  employment?
• When funding is fixed
• Thats attractive to DWP
• Thats flexible and avoids SPOFs
• That creates the right incentives for Serco and
  all subcontractors

3
Everyone is unique but everyone needs help to get
over their own personal barriers

• Front line staff time
• Training and skills provision
• Childcare
• Travel
• Other discretionary spend
• Facilities and support costs

4
Harder to help claimants cost more money
5
Fixed fees create a performance ceiling
6
Sercos 3 step model for delivering Flexible New
Deal The Customer Journey
7
Serco 3 step model
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The Serco 3 step model
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How does FND funding compare to other programmes?

• Consider funding in employment zones and private
  sector led new deal
• Funding achievable for an average sustained
  (26week) outcome
• Assume 85 sustainability of jobs and 13 week
  outcomes
• FND has much less funding than current programmes
  but does have a slightly different customer base

10
Regional variation? DWP budget per start
11
Regional variation? Serco bid regions
12
How much money per step?
Caseload per front-line staff member
Current performance
Outcomes per front-line staff member
Flow rates
Discretionary spend
Mandatory work related activity
Support and management costs
13
How to balance risk and reward?
Performance based remuneration
Up front funding for investment
6 year delivery requirement
Minimum standards
14
Our 80/20 fee structure - Manchester
15
The impact of the recession bid clarification
18 months
60/40
Performance offer
16
Our 60/40 fee structure - Manchester
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How funding compares Step 1 for 1000 starts
18
Getting to a final contract
19
Questions?