UEAHRS – An Umbrella Agreement for a Rainy Day?

At long last, in the week ahead, it appears that the commissioning of DWP’s Work & Health Programme will finally get properly underway. The scheme has already been dogged by several false starts since its originally scheduled commissioning launch back in July. It has suffered from this years’ tumultuous political events, with three different Secretaries of State holding the reigns at DWP, and effectively an all new ministerial team under Damian Green installed in July. There are then the widely rumoured tales of disharmony between DWP, the co-commissioning authorities in London and Manchester, and the LGA. Uncertainty over funding, an ambiguous economic outlook, and the need for a contestable process which is beyond challenge, has all led to a variety of changes in direction, not least the abandonment of the original restricted competitive dialogue approach, in favour instead of commissioning via the impending Umbrella Agreement for Employment & Health Related Services (the UAEHRS – hardly an acronym that readily flows off the tongue).

So what does this all mean? Well, on the upside the announcement of a budget £1.77bn over 4 years to be spent via the UAEHRS suggests that DWP has found some extra money to the original £120m per year estimate cited earlier in the year as the envelope for the Work & Health Programme. A big squeeze in the market still, however, appears likely. The Work Programme and Work Choice, which the Work & Health Programme will replace, currently account for 67 separate contracts, shared by 16 different prime contractors. The UAEHRS will, in contrast, have just 6 regional Lots (and one overarching national Lot), with the suggestion that each Lot may translate as only a single Work & Health Programme CPA, each with just a sole prime provider. London and Manchester, as co-commissioned areas, may sit separate to this, which may only just push the total number of Work & Health Programme CPAs into double figures. In short, when the music stops, some primes may no longer have a chair to sit on, regardless of how good their tender campaigns are.

DWP have indicated that there will only be 5 providers accepted onto each UAEHRS Lot – which means 30 UAEHRS slots (6 x 5) in total. In theory, this could mean that the same 5 super providers are selected to the UAEHRS in every Lot area. In practice, it is probably more likely that some of the biggest providers in the market may be limited to inclusion to 2 or 3 Lots, helping DWP strike a balanced market. This would create space for the majority of current primes to be included on the UAEHRS in some way, shape or form. Either that, or we may see DWP, if pressured, accept more providers onto each Lot. That said, it is arguably probable that some primes may not be included in some Lot areas where they are currently a Work Choice or Work Programme prime.

The scoring criteria for the UAEHRS will seemingly favour providers with a proven record in each Lot area. The two highest weighted criteria are “service integration and rationale” and “delivery challenges”, likely requiring bidders to evidence their history of collaboration with other local services providers, and how they have overcome local social and economic operational hurdles. By contrast (and slightly at odds with previous rhetoric), the lowest weighted criterion is “previous contract performance”.  The other three UAEHRS criteria are “supply chain management”, “implementation”, and “stakeholder engagement”. This choice of emphasis by DWP will no doubt have a further bearing on who makes the cut.

The devil will be in the detail, and that will inevitably flow as the week ahead unfolds. Brace yourself, however, for an interesting ride, and probably the biggest shake up in the market for almost a decade. It won’t always be pretty, but it will be fascinating!

Jim Carley, Managing Director, Carley Consult Ltd