Organisations providing support services for the incoming universal credit regime must be offered ‘funding guarantees’ the government has been warned.
This is the plea by councils, housing associations, voluntary sector bodies in their response to the DWP’s ‘universal credit local support service framework’ which sets out how organisations will be paid to help claimants moving onto the single benefit.
The DWP announced in February that it was exploring an ‘outcome-based’ approach to funding support services in which providers’ income was linked to their performance.
Responses to the draft framework document have however warned that some kind of funding guarantee was essential if such a regime was to avoid creating ‘perverse incentives’ for providers.
“A number of respondents shared concerns about perverse incentives caused by outcome-based funding, and the risk of ‘parking [difficult cases] and creaming [less difficult cases]’”, a roundup of 149 responses received by the DWP warned.
Respondents also expressed concern about the “burden of monitoring and reporting requirements” and the risks of uncertain funding for smaller organisations in the voluntary and community sector, the DWP said. “Respondents suggested a compononent of guaranteed funding (not just for local authorities) would help offset risk.”
A dozen local authority pilots are currently road-testing different kinds of support provision, including assistance in completing online applications and support in gaining employment skills. It was announced last month by welfare minister Lord Freud that the pilots, which were due to end their work next month, will continue till December.
That announcement came shortly after the department announced that October’s ‘national rollout’ would be limited to six small areas across the country.
At the same time he indicated his enthusiasm for some sort of pooled budgets. As reported by LGC, his comments follow a meeting during which senior LGA figures called for a community budget model to be applied to the universal credit support work.
DWP said this month that it hopes to say more about the funding system “over the next few months” – even though the need for clarity about funding was “a central concern in many responses” – including information about minimum service and funding variations for very rural or very deprived areas.
- Suggested the department may have underestimated the level of need and particularly that need would decline over time
- Questioned DWP assumptions about how many people would be able to get online, particularly amongst vulnerable groups and in rural areas
- Said the framework had ignored both social care and housing providers
DWP is to publish a second draft of the framework in October 2013 in order to allow testing of the framework in areas where universal credit has been rolled out “and additional selected areas”.
A third version of the framework is to be published in the Autumn of 2014 “in time to inform local authority budgeting timetables for 2015-16 and to feed into the ongoing development of universal credit design”, the department said.