By Helen Mooney
9 May 2011
The government’s £5bn back-to-work programme poses significant financial risks, MPs have warned.
A report by the Commons work and pensions select committee says that the ‘financial stakes’ are ‘very high’ in the Work Programme, which will pay contractors paid only if they are successful at finding work for jobseekers.
The report, Work Programme: providers and contracting arrangements, warns that service providers such as charities might find it difficult to stay afloat financially under the payment-by-results model.
Committee chair Dame Anne Begg: ‘The government could face significant costs if delivery were to collapse in a particular region.’
The programme is due to be implemented nationwide from June, replacing a range of existing programmes that help benefit claimants find jobs.
It will be provided on a regional basis by ‘prime contractors’, the majority of which will come from the private sector. They will be paid by the government based on their results in achieving sustainable employment for jobseekers. They are expected to subcontract service provision to specialist local organisations, including voluntary sector providers.
