By Richard Johnstone | 22 February 2013
The government’s flagship Work Programme had an ‘extremely poor’ record of finding jobs for the unemployed in its first 14 months in operation, the Public Accounts Committee said today.
Examining the scheme, which was launched in June 2011, the MPs said none of the 18 regional contractors across the UK had met their targets to find people jobs in the period to July 2012.
The programme, which the coalition government has said will provide personalised support to help 2.4 million long-term unemployed people find work over five years, has fallen well short of expectations, the PAC concluded.
Overall, only 3.6% of claimants on the programme moved off benefit and into sustained employment, less than a third of the 11.9% the Department for Work and Pensions expected to achieve. Performance was ‘so poor that it was actually worse than the department’s own expectations of the number of people who would have found work if the programme didn’t exist’, said PAC chair Margaret Hodge.
The Department for Work and Pensions: Work Programme outcome statistics report also concluded that the performance of contractors, who are paid according to their results, varies widely.
The DWP told the committee that different skill levels between providers, which are mainly private sector firms, led to the programme’s under-performance in its early stages.
Ministers must therefore ‘examine which approaches are working best and which are not working’, the PAC recommended. Good practice should be identified and shared, and failing providers held to account.
The MPs also concluded that there is a high risk one or more provider will either go out of business or have its contract cancelled as a result of poor performance. The DWP must therefore closely monitor providers so it can manage the consequential risks. Charities involved in the programme have already warned that some contracts under the scheme are not sustainable.
Hodge said: ‘The best performing provider only moved 5% of people off benefits and into work, while the worst managed just 2%. The department must hold failing providers to account, as well as ensuring that good practice is identified and shared.’
She added that, under the payment-by-results system, the DWP is meant to have incentives in place to prevent providers concentrating on the easiest cases, and ignoring those people who are harder to help.
However, these do not seem to be working, and there is increasing evidence of ‘creaming and parking’, where providers take the easiest cases and then subcontract those that are more difficult, Hodge said.
But a DWP spokesman said the committee ‘paints a skewed picture’, adding that more than 200,000 people have moved off benefits and into a job through the Work Programme.
He said: ‘The Work Programme gives support to claimants for two years and it hasn’t even been running that long yet, so it’s still early days. We know the performance of our providers is improving. Previous schemes paid out too much upfront regardless of success, but by paying providers for delivering results, the Work Programme is actually offering the taxpayer real value for money.’
The Employment Related Services Association, which represents employment support providers, said the Work Programme is more cost-effective than comparable schemes in the past.
Chief executive Kirsty McHugh added: ‘These outcome statistics relate to the earliest days of the Work Programme and caution is needed before we can judge its overall effectiveness. However, robust data published by ERSA last November shows that the Work Programme is placing more people into work month on month and we can already see the programme having a demonstrable impact in reducing long-term unemployment as evidenced in this week’s labour market statistics.’