Legal challenge looms over job-finding contract award

Legal challenge looms over job-finding contract award
By Stephen Naysmith, The Herald Scotland
08.04.11

UK ministers could face a legal challenge over the decision to award a contract finding jobs for people who are out of work to two private-sector companies, at the expense of a successful Scottish social enterprise.

Political pressure was building last night after the Work and Pensions Secretary, Chris Grayling, and Scottish secretary Michael Moore were involved in a heated “jobs summit” in Edinburgh with representatives of successful bidders Ingeus and Working Links, along with Laurie Russell, chief executive of failed bidder the Wise Group, and other interested parties from the voluntary sector.

Former Labour MSP Des McNulty, who sits on the board of the Wise Group, last night indicated the decision might be open to legal challenge, due to apparent discrepancies in the way multimillion-pound contracts covering employability schemes in Scotland under the Government’s Work Programme had been allocated.

Writing to The Herald, he said it was unfair that Wise Group had abided by a requirement the voluntary sector should provide 30% of services delivered, while the winning bidders Ingeus – who said they would place 8% of the work with the voluntary sector – and Working Links (6%) did not.

“It surely cannot be legal to award a contract to an organisation that doesn’t meet the published tender,” he said. “It is absolutely clear the scoring system was biased against bidders, like the Wise Group, who had a high voluntary sector provision in their bids as required by the tender document. It is also clear that discussions took place with some bidders but not all bidders during the week that scores were being finalised prior to the formal announcement of the outcome of the tendering process. I believe the inconsistencies are sufficiently serious to require a rerun of the tender submissions in Scotland.”

Meanwhile, former SNP MSP Christina McKelvie said she had written to Audit Scotland and the National Audit Office to raise “very serious concerns” about the handling of the tendering process.

She said: “The DWP rules were absolutely clear – at least 30% of each contract was to be delivered by the voluntary sector. But in Scotland, the two private firms who have been awarded the contracts between them plan to give a grand total of 13% of the work to the voluntary sector.

“That’s not just an insult to a Scottish voluntary sector which has shown itself to be very successful at helping people into work, it’s a straightforward breach of the DWP’s own criteria for awarding the contracts.”

“The handling of this contract by the DWP is unacceptable.”

Shadow Scottish Secretary Anne McKechin praised the Scottish voluntary sector’s track record on employability: “They have been pivotal in supporting many people into work. Serious answers are needed from Michael Moore and Chris Grayling about what dialogue they will have with the two successful bidders to increase the involvement of the voluntary sector,” she said.

However, after the summit meeting, Martin Sime, chief executive of the Scottish Council for Voluntary Organisations, said such answers had not been forthcoming, claiming the ministers’ justifications for the decision to award favoured bidder status to the private firms and reject the Wise Group had been “implausible”.

He criticised a Government press release that described the news as a massive boost to the Big Society and the voluntary sector as offensive and insulting.

Mr Sime added: “In a Scottish context what has just happened isn’t a massive boost, it’s a massive blow.

“Big companies are going to make millions getting the most able into the labour market at the lowest cost, while voluntary organisations are going to lose a lot of money and make people redundant.

“The Work Programme won’t meet the needs of people furthest from the labour market, and the voluntary sector is being pushed further down the food chain.”

A spokeswoman for the DWP said there was still a possibility the Wise Group could participate in the Work Programme even though they had not been named as a main contractor.

“We are working with the Wise Group to see where they could be involved,” she said.