The latest update on Future Employment Support (FES) gives us a much clearer picture of what comes next. Zach Law, Commercial Lead, shares his insights.
Eleven areas have now been offered devolution deals, while DWP remains committed to a centrally commissioned programme across the remaining areas.
For providers, this means FES is no longer simply about preparing for one national procurement. We could be looking at a combination of central DWP commissioning alongside multiple devolved employment programmes.
And that's where things get commercially interesting.
We've already seen this with Connect to Work
Over the last 18 months, I’ve worked extensively on Connect to Work procurements. While the underlying employment support models are relatively prescribed, the commercial arrangements at local level have varied considerably.
We've seen differences in:
- payment mechanisms and payment timings;
- performance measures and evidence requirements;
- grant funding versus contracts for services;
- Initial VAT treatment;
- contractual risk, liabilities and service credits;
- local delivery requirements; and
- additional requirements – including, in one case, a performance bond.
The service might start from the same national policy, but the commercial proposition can look very different depending on where you're bidding.
FES could bring more of the same, potentially at a much greater scale.
The good news is that potential providers don't need every procurement document to start preparing.
The next layer is local complexity
That's where the experience from Connect to Work becomes particularly relevant.
Once the delivery model is understood, each local opportunity can be layered on top: its payment mechanism, performance regime, contract terms, VAT position, cash requirements and local delivery expectations.
The question then becomes much more powerful than simply:
“Can we deliver this?”
It becomes:
“What does it cost to deliver, what assumptions need to hold true, what risk are we taking – and does the funding adequately reflect that?”
At 50 Degrees, we can help providers do that work now: building the core commercial model, testing different FES scenarios and establishing the parameters of a sustainable offer.
Then, as the central and devolved opportunities develop, we can assess the detail – from financial modelling and payment mechanisms through to contract review, clarification and negotiation.
The procurement landscape might be changing, but the underlying economics of delivering employment support haven't.
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