Interpreting the marketisation of employment services in the UK and Denmark

Institutional reforms of employment services have been sweeping across the OECD countries since the late 1990s. In this paper we focus on one of the major international trends in the delivery of employment services; that is the contracting out of Public Employment Services. The advocates of contracting out argue that a quasi-market will deliver more efficient, effective and de-bureaucratised employment services. In this paper we test these assumptions by comparing the experiences of marketising employment services in the UK and Denmark. Our hypothesis is that quasi-market models in employment services have difficulties in living up to both the preconditions for a well-functioning market and the stated political expectations about increased efficiency, innovation, higher quality, and less bureaucracy than the public services they replaced. On the other hand, we consider the alternative hidden and unstated effects of marketising employment services. Our focus is on the implications of marketisation in shaping a new set of conditions for subsequent policy directions, on the premise that reliance on a quasi-market model creates new conditions for steering and governing both the labour market and employment policy, which in turn has significant effects for citizens. Clouded in the ‘technical’ language of improved efficiency and effectiveness, such changes are often neglected and depoliticised. Hence, the paper tries to bring these changes to light making a very first attempt to describe how contracting out may change the nature of employment policy itself. We aim to compare the governance of activation in the contrasting welfare contexts of the UK and Denmark, traditionally classified as archetypal liberal and social democratic regimes respectively. It might be expected that welfare states established and reformed on such different principles and values, might react to international trends in governance and activation policies to different extents or in different ways. We aim to investigate the extent to which common traits can be identified in the organisation of employment services, despite the obvious differences in the underlying welfare systems. Furthermore, we aim to establish how such similarities and differences in marketization have impacted on the content of policies. Do ‘international’ tendencies in use of governance modes also result in similar types of implementation and can more convergence in the content of the services be observed? We will first draw on literature and policy documents to examine the last 10-15 years of developments in institutional and contractual arrangements for quasi-markets in employment services in the UK and Denmark, within the context of reform of social security and employment policy. Second, we will review the conceptual literature on quasi-market analysis (including different approaches to understanding ‘types’ of governance as distinct and in combination) in order to interpret the meanings and significance of changes and to consider their impact on employment policy. Third, we will test the assumptions of the quasi-market approach through a comparative analysis of research evidence (including publically available official evaluations and information about the conditions, contracts and successful bidders for the current contracting of employment services and activation programmes in the UK and Denmark) in the two countries. Finally, we will make an original assessment of how this type of governance substantially affects the nature of employment policy and the dynamics of accessing support for service users.