Marketisation of UK employment programmes: the impact on a third sector organisation

Abstract

Since 1999 UK employment programmes (known as welfare-to-work programmes) have been delivered through the procurement of services from organisations outside of the public sector. Managed by contractual arrangements and arranged in a quasi-market system controlled by the state, private and third sector organisations compete to secure contracts predominantly based on payment-by-results and competitive tendering processes. This thesis used an instrumental case study to analyse the impact of the welfare-to-work quasi-market on a third sector organisation based in Scotland. Using a qualitative mixed-methods research strategy including 20 in-depth interviews, 150 documents, an ethnographic study and financial analysis of the organisation’s accounts, the thesis presents an in-depth insight into the development of the welfare-to-work market and its changes over time and the impact this had on instigating organisational change in a third sector organisation. Drawing on transaction cost theory, neoinstitutional theory and resource dependency theory the study found that activities, structure, and management processes changed in line with changes in its organisational field in order to attract and maintain resources and gain legitimacy. Furthermore, the organisation under investigation faced financial management tensions as it sought to balance its involvement in service delivery with transaction costs associated with market participation. The thesis found that the dependence on resources from complex quasi-markets relations creates new power asymmetries between delivery organisations and the state.