Hugo Sinzheimer InstituteUniversiteit van Amsterdam

Pathways to work:Governance and accountability

Els Solc.c.a.m.sol@uva.nl

Espanet/RECWOWE Summer School Utrecht Utrecht 17 july 2008

Case The Netherlands 2003

Reconciling Flexibility and Accountability in Welfare to Work in the Netherlands

First Trend

• Marketisation of Employment Services

• Financial renewal -> principal agent relationship

• Catchwords: – efficiency – flexibility – decentralisation– contracting out

Second Trend

• Government governance -> restoration of political primacy

• Catchword: accountability

Government Governance

‘Safeguarding the interrelationship between management, control and supervision by government organisations and by organisations set by government authorities, aimed at realising policy objectives efficiently and effectively, as well as communicating openly thereon and providing an account thereoff for the benefit of stakeholders’

Source: Dutch Ministry of Finance

Dilemma

Trade- off:

Political Results-orientedAccountability_____________Accountability

Labour Market 2008Governance of Uncertainty

• Current Economy and Labour Market Developments– bring more uncertanties to deal with for both demand and supply on the labour market

• Distribution of uncertainty within the european labour markets– Firms cope with uncertainty through policy action and corporate practice ->

• High levels of pay and employability security for most valued workers, lower levels for less skilled

• European governments offset this inequality by providing income benefits and employment services for those likely to experience periods of unemployment

• Security components (Crouch 2007):• Job security• Income security• Combination Security (work life balance)• Employment Security• Work place security• Employability Security• Representational security

Employment Strategy Europe

• Renewed Lisbon Strategy • Aspiration for 80 % Employment Rate• Inclusion of new groups (disabled, lone parents, older workers) with multiple barriers to work (skills, housing, health, child care, transport,

employment conditions,debt and financial problems, criminal past, socio-cultural factors and attitudes towards work etc)

• Flexicurity strategy (Green book 2006):• Balance between flexibility and security: role new intermediairies like twa’s • Life cycle approach to work• Public and private partners ->Intensification of outsourcing and cooperation in service delivery between

‘partners’• Conducive ALMP measures and tools to be implemented

Three coordination mechanisms and potential strengths and weaknesses

(Source Sol, 2005)

Control

Competition

Trust

Applied in

Hierarchy

Market

Networks

Potential strenghts

Enforcement certainty policy

implementa- tion

Allocation information

dissemina-tion

incentives

motivation commitment mutual

learning pooling of

resources Potential weaknesses

incentives rent-seeking information

and compliance costs

capture by interest groups

rent

seeking transaction

costs lack of

commit-ment

free-riders enforceability abuse of

cooperation

Current labour market intermediairy arrangements

• Market strategy is dominant: pursuit of more market arrangements

• Content of services: Work First – Workfare -People processing

• Results: deterrence effect, placement effects• Shortcomings:

A. lack of effectiveness B. one size fits all

C. focus on willing, less on able

A. Low Effectiveness - evaluation results -

• Low access of vulnerable groups to services Creaming (Considine 2005, Finn 2006)

• Low effectiveness for vulnerable groups of services Parking (Considine 2005, Mac Donald 2007, IWI 2007)

• Short term results: – revolving door -> lack of long term employability

Causes lack of effectiveness – Lack of trust -> Severe Monitoring (Australia)– Lack of coupling in tiered service delivery – Short term contracts -> lack of innovation– Lack of market transparancy

B. WW: Probability of getting a job, with and without employment services

(source SEO 2006)

B. Social Assistance: Probability of getting a job, with and without employment services

(source SEO 2006)

C. Work First strategy

Willing Not willing

Able

Work First

Not-Able

t1 t2

t1

t2

Transition from Market to ‘Network in Market’(I)

• In order to meet a.o. Lissabon targets it is necessary to also bring the not-so-easy clients back into the labour market

• Due to uncertainty and reactions of companies the hard core at the bottom end of the labour market is getting larger

• Enlargement of supply groups (at the bottom) of the labour market (disabled) due to changes in social securtity arrangements

• New supply groups have multiple barriers• Multiple barriers to join the labour market require multiple

provisions + longer term + tailored welfare to work services• Expertise seldom in one single actor

-> Need to establish functioning opportunity structures to guarantee meaningful and decent employment over the life-course :

• by longer term relationships ->managerial and operational learning• total package of service provided that is greater than sum of parts

(synergies)

Transition from Market to ‘Network in Market’(II)

-> Embedded Employability (Schmid 2005)A functioning opportunity structure with reliable and expectable options to individuals to overcome myopic choices or excessive risk aversion ( made up of elements such as vocational training/soft skills etc)

-> Managing and operating Service in partnership seems to be adequate governance form

Conditions for partnership

• Establishment of trust central element (Teicher a.o, 2004;Sol 2000, 2005)

• Reciprocity in the relationship fe - protection of lt unemployed by legislation (equal pay) - flexibilisation PES -> decentralisation (OECD, 2003,2008)• Cooperation of some durability -> cannot take place in short term

contracts (Ham and Koppenjan , 2001; Sclar 2000)• Risk sharing -> parties are in a partnership together and on equal

terms in the sense that both have to bear parts of the risks involved.

• Jointly produce of services -> both stand to gain from mutual effort (Greve & Hodge, 2008)

• Common determination of the performance criteria and the means of control and accountability (Teicher, 2004)

Role PES in Partnership

• Initiate partnership (a.o. allocation of contracts, shaped to local economic conditions, payments based on aggregates not individual outcomes)

• Safeguard coordination at management and operational levels (a.o. amongst casemanagers – counselers)

• Transparancy (benchmarks of interventions, contracts, vacancy sites)

• Intake and referral (a.o.profiling, targeting) • To offer client clear complaint procedures• Provide Local/Regional Pes with discretionay room

Role of PRES in partnership

• Contractors (for and not for profit)• to provide access to specialist case managers and other

professionals with qualifications that PES might lack• To diversify and broaden range of services:links with

training and remedial services; • to offer cost efficient job coaching• to promote new technology

• Staffing agencies • to capitalize on the potential of temporary work to create

job access for disadvantaged workers and put them on the path to better jobs

Role of the Client in partnership

• Citizen engagement • Involvement by user choice (New Public Service)• Bring in knowledge and commitment

->As employment services is in essence case management the result depends for a large degree on the knowledge and commitment of the client (Sol&Glebbeek 2007)

Role of Employer Companies in networks

• Do not limit partnerships to supply side as embedded employability needs commitment of companies

• For workers with labour market disadvantages specific measures are needed such as specific workplace adjustments, caring arrangements for working mothers etc

Definition Accountability

Classical definition:

The legal obligation to be responsive to the legitimate interests of those affected by decisions, programmes and interventions

(Wilson 1887; Waldo 1956)

Types of accountability criteria(source Mosley 2003)

• Legal accountability public agencies are expected to act on the basis of the rule of law and in conformity with applicable regulations

• Fiscal accountability correctness and economy in the use of public monies. Public bureaucracies are expected to minimize costss and account for expenditure based on law

• Performance accountabilityOutput-oriented effectiveness and efficiency

• Public accountability democratic public adminsitration requires political accountability to elected government officials but also responsiveness to the needs and preferences of citizens

Dimensions of accountability

• Vertical accountability

• Horizontal accountability

Conclusions (1)

• Market reform so far delivered short term results • Need of lt services of labour market intermediairy

to adress multiple barriers ->• Embedded Employability: transforming stepping

stones into solid bridges ->• Partnership (including client) appropriate

governance form ->• Accountability to be build in structure

->

Conclusions (2)

+ local partnerships + client involvement

Political Results-orientedAccountability ________ Accountability

- juridification

Conclusions (3)

• Trade offs between decentralisation and accountability:– Overriding national policy objectives– Interest conflicts– Performance accountability– Legal accountability