Outcome based funding
Procurement must be based on the view that ultimately funding drives behaviour and that if increased employment is the objective, then funds must be used to get workless people into jobs and to enable them to stay in and progress within them for as long as possible.
Funding could be based on:
- Progress towards key stages of the journey towards employment;
- Job placement;
- Job retention at 13 weeks/26 weeks with a final bonus after a year;
- In-work progression – career development/higher wages/promotion/– not necessarily with the same employer; and
- Extra payments for priority target groups (discussed in more detail below).
It is likely that the conditions above might create real cash flow related and core funding concerns for many key organisations currently delivering employability services, such as social economy organisations operating in this field whose continuing operation depends on core and other flexible funding being available in advance in order to meet central overheads, management and basic running costs. If all of this core funding were to be pooled centrally and re-allocated on a strict outcome performance basis many of these organisations, particularly the smaller voluntary sector or community based ones operating in the specialist sub-contractor or referral agency field, would be unlikely to survive.
Therefore, existing core funding to such organisations needs to continue and to fall outside the remit with the existing methods of core funding to remain in place.
The proposed payments schedule could include:
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