Greg Clark MP: Why shouldn't cities bid for Work Programme contracts?

Greg Clark is Financial Secretary to the Treasury and MP for Tunbridge Wells.  Follow Greg on Twitter.

While they’re still in office, it is the fate of most governments to get the least credit for their biggest achievements. That’s because, with few exceptions, the most important reforms that a government can undertake are those whose outcomes unfold over a long period of time.

For instance, the full impact of changes to the way that schools work can only be truly assessed after a generation of school children have passed through the reformed system. On the decentralisation agenda, we can already see pioneering local authorities and community groups making use of their new freedoms – but to fully reverse the effect of a century of centralisation will take years rather than months.

Welfare reform is another area in which fundamental changes are being made. As with our other major reforms, the legacy of the last Labour government could not be more unhelpful – years of neglect in the policy area itself and the disastrous fiscal context of record public debt. The state of our public finances mean that welfare reform, long overdue, is being pursued with the utmost urgency. In implementing key components like the Work Programme, speed is of the essence.

The primary contracts for delivering the Work Programme have been structured on a regional basis and have for the most part gone to large, private sector service providers such as A4E and Serco. Where they get people into work and provide value for the public purse, I have no absolutely no problem with the involvement of these businesses. However, I do understand the concerns of people who had hoped that there would be a greater role for a wider range of providers – such as those from the voluntary sector.

It is, of course, early days. Now that the Work Programme is underway and the stranglehold of the centralised state has been broken, new opportunities will present themselves. The public resources allocated to the programme are no longer under monopoly control. It is not good enough for a provider to be ‘good enough’ – they have to be the best or make way for someone who’s better.

Also, by learning from experience, the Government will be in a position to refine the way that contracts are structured and awarded. It is vital that competition takes place on a level playing field and that barriers to market entry are minimised.

Furthermore, it is my belief that potential service providers in any area of government policy should not have to wait for government action to allow them to participate. I think it is an important principle that if a potential service provider can show that they could do a better job than anyone else – then they should be able to make their case, regardless of artificial bureaucratic constraints imposed from on high.

This ‘right of initiative’ is the foundation of the City Deals programme. For instance, in the Sheffield City Deal the Local Enterprise Partnership combined funding from local businesses and councils with existing government skills funding to create thousands of extra apprenticeships to meet local employer needs.

City Deals are the starting point not an end point for the way in which communities take control of their future development. The first of wave of City Deals agreed with Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield, have demonstrated that these cities can bring together their local authorities, business leaders and community institutions through Local Enterprise Partnerships to undertake projects of major economic importance.
I see no reason why, either individually or in partnership with one another, these cities shouldn’t bid, on an equal basis to everyone else, for Work Programme contracts – even under their current regional structure.

Of course, not everyone will like the idea of entrepreneurially-minded partnerships of local councils and employers. There will be those who believe that national programmes should always be delivered by national public bodies. Equally, there will be others – representing particular corporate interests – who’d rather not have the competition.

However, when it comes to getting people into work and getting value for taxpayers, I’m sure that real Conservatives would like to see innovation and entrepreneurship coming from all directions.