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In just 17 weeks time, the current arrangements for helping people who find themselves without any money at all, e.g. if they have a disaster such as flooding, their benefit doesn’t turn up or their money is stolen, will end. Instead of the Department for Work and Pensions deciding whether an applicant can get help, the Welsh Government will be responsible for delivering the discretionary elements of the Social Fund from 1st April 2013.
The contract for delivering the scheme went out to tender in August, marking a break from the Welsh Government’s antipathy to private delivery of services as noted in a blog post at the time. The winner has now been announced – and it is an interesting consortium of Northgate Public Services, one of three businesses within the multi-national Northgate Information Solutions Group, Wrexham County Borough Council and the trading arm of the Family Fund, a charity that provides grants to low-income families with disabled children.
While the name may be new to many, Northgate have already got a foothold in Wales’s public sector (although they have yet to have an office here). They have already helped to administer council tax benefits for 6 local authorities in south east Wales, and deliver social care assessments for Caerphilly, Rhondda Cynon Taf, Newport, Monmouthshire, Merthyr Tydfil and the Vale of Glamorgan. They also provide services for all police forces, Department for Transport and health boards. The turnover last year of the Public Services division was £168.1 million, which generated an operating profit of £36.5 million.
The Family Fund is perhaps better known, but while large in charity terms with an income of £34.9 million in 2011, it is less than a quarter of the size of Northgate Public Services. It is based in York, with a ‘regional’ development officer in Wales. Profits from its trading arm are gifted to the charity.
It will be interesting to see how the relationship between the winning parties pans out, including the roles of Wrexham Council and the Family Fund, who both look like strong players who are unlikely to be content to be marginalised as often happens.
More importantly, the award of this tender to a public-private-voluntary mash-up raises the question of whether this could be the way forward for the delivery of more and more public services. More palatable than a straight privatisation, no doubt cheaper not least because of economies of scale, and lucrative for the third and public sectors as well as private, what’s not to like? Except, of course, that some civil servants in the Department for Work and Pensions – not mandarins but lowly-paid admin staff at the front-line in communities across Wales – will doubtless have lost their jobs.
As the pressure on households from static wages, benefit cuts and rising costs mounts, many eyes will be on this previously little-known bit of the welfare state to see not only if the Welsh Government can deliver its new responsibilities but also if this new-found private-public-voluntary mix can offer something different.