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Re-examining British Welfare-to-Work Contracting using a Transaction Cost Perspective

  • HAYLEY BENNETT (a1)

Abstract

This article critically reflects on the administration of activation services in the UK. It describes the welfare-to-work quasi-market and focuses on the impact of 2008 commissioning reforms that advocated amalgamating small contracts into larger ‘lots’, creating a top tier of prime providers to manage subcontractors, and increasing outcome-based funding. Drawing on transaction cost theory and empirical case study research, it is demonstrated that these changes led to an increase in a range of activities and costs for competing service providers that undermine government rhetoric of choice and efficiency. This article adds to the existing literature on welfare-to-work contracting by demonstrating the difficulties some organisations face in the context of welfare markets and questioning public service out-sourcing processes. It concludes by reflecting on the implications for future market-based social policy reforms.

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Journal of Social Policy
  • ISSN: 0047-2794
  • EISSN: 1469-7823
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