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Fair Start Scotland Business Regulation Impact Assessment

Fair Start Scotland Business Regulation Impact Assessment

Friday, April 6, 2018

ISBN: 9781788517645

The Scottish Government have completed an Assessment on the Impact of the new employment support service; Fair Start Scotland on businesses and stakeholders

Executive Summary

Summary and recommendation

A key element of Fair Start Scotland was to encourage participation from public, private and third sector bodies. There should be little or no increased administration cost to service providers. Scottish Government’s Fair Start Scotland employment service will:

• Deliver a flexible ‘whole person’ approach;

• Provide a Service that is responsive to those with high needs;

• Provide a drive towards real jobs;

• Deliver Services designed and delivered in partnership;

• Be designed nationally but adapted and delivered locally;

• Provide Contracts that combine payment by job outcome and progression towards work;

• Encourage effective working relationships between DWP and providers;

• Establish the customer’s willingness to engage with the service; and

• Enable a collective assessment between participant and provider on the support needs of the individual.

Costs and benefits

Payments to Service Providers will depend on the actual delivery of the service and the performance offer made by successful bidders in the procurement exercise.

The budget position is set out through to 19/20. The Fiscal Framework settlement with the UK Government did not include 2020/21, although this is currently base lined at £13.8m.

Between the Outline Business Case (OBC) and the invitation to tender (ITT), volumes and performance were updated to reflect evolution of the service design, more detailed costing and refinement of the payment model.

Economic analysis for Fair Start Scotland - Full Business Case was then undertaken taking these into account and using actual costing and performance provided during the tendering process.

The updated analysis in the Full Business Case (FBC) demonstrates that the Preferred Option set out in the OBC continues to offer value for money when costs and Performance outcomes are taken into account following the procurement exercise.

The preferred option delivers both a positive net present value (NPV) and benefit to cost ratio (BCR):

Based on analysis, with a positive net benefit and a benefit-to-cost ratio; Fair Start Scotland will offer value for money following the procurement process Performance expectations and overall costs did not change significantly in comparison with the Outline Business Case, so the net social and fiscal benefits are similar and remain positive, indeed are slightly higher, due to shifts in volumes between the level of support participants will require, which have a marginal effect on assumed benefits

Social Benefits

Scottish Government believes the introduction of Fair Start Scotland will result in Social Benefits to society, they include:

• Achieving a consequent reduction in demand for other public services (including out of work benefits, healthcare, social care etc.);

• Demonstrating the Scottish Government's commitment to reducing inequality by prioritising places for the harder to help and allowing for more intensive support where needed;

• Increasing the overall cost saving to the public purse, per person

supported into work, by prioritising places for the harder to help.

• Supporting participation by providers from the private (inc SME), public and third sectors;

• Ensuring service users experience a joined-up employability service, that helps tackle all their barriers to employment;

• Providing consistency of approach across the lifecycle of the service, supporting easier transition between services for children into adult services (Getting it Right for Every Child, Opportunities for All);

The Scottish Government are satisfied that (a) it represents a fair and reasonable view of the expected costs, benefits and impact of the policy, and (b) that the benefits justify the costs. The business impact has been assessed with the support of businesses in Scotland.