Work Programme fails to live up to expectations

27 Nov 12
The government has defended its flagship scheme to find jobs for unemployed people, although only 2.3% of those taking part in the Work Programme found long-term employment in its first year.
By Richard Johnstone | 28 November 2012

The government has defended its flagship scheme to find jobs for unemployed people, although only 2.3% of those taking part in the Work Programme found long-term employment in its first year.

Statistics published yesterday by the Department for Work & Pensions show that 878,000 unemployed people were referred to the programme between its launch in June 2011 and July 2012. Only 20,000 of these stayed in their jobs for longer than three to six months, lower than the government’s 5.5% target and the number of people who would have found jobs without any help.

Under the programme’s payment-by-result contracts, private and voluntary providers receive a small attachment fee when they start to help each unemployed person find work.

Payments are made to the 18 prime contractors across Britain once they place people in jobs. A job outcome fee can be claimed after a participant has been in a post for three or six months, dependent on circumstances, with up to 26 subsequent ‘sustainment payments’ can be made.

Over the 13-month period, around 31,000 job outcome payments were made. Around 58,000 sustainment payments – indicating long-term jobs had been secured – were paid, based on around 20,000 people having retained jobs for the period required to trigger them.

The number of people in long-term jobs is below the number the Department for Work and Pensions estimated would have found employment if the scheme didn’t exist. The ‘non-intervention performance profile’ for those on Jobseekers Allowance and Employment Support Allowance was 5% in the first year, the department stated in its initial Invitation to Tender.

Responding to the figures, employment minister Mark Hoban said ‘it's still early days’ in the programme. However, he added ‘already thousands of lives are being transformed’, with one in four people getting some work.

‘More than half of the early starters have been off benefits and performance is improving,’ he said.

‘Clearly these figures only give a snapshot picture as we’re one year in, and the Work Programme offers support to claimants for two years, but these results are encouraging and something providers can look to build on.’

The Social Market Foundation think-tank, which has examined the programme, said the figures raised ‘serious questions about the DWP’s expectations for the scheme’.

Director Ian Mulheirn said the lower number of people in long-term jobs showed ministers’ ambitions for the scheme ‘were nowhere near what past programme performance would suggest is achievable’.

He added: ‘Finding sustained jobs for the long-term unemployed takes time, so the figures for the first year of the scheme were never going to be high. But the government knew this and still set as an absolute minimum that providers should find sustained work for 11 in every 200 jobseekers in the first 12 months of the scheme.

‘Unless a better-funded service is provided, many jobseekers will slip into permanent worklessness. The principles behind the Work Programme are sound for more normal economic times but the funding mechanism has the unfortunate side-effect of cutting frontline unemployment services at times of high unemployment and increasing it when jobs are plentiful.’

The National Council for Voluntary Organisations, which represents some voluntary contractors in the scheme, said the figures were ‘disappointing’.

Chief executive Sir Stuart Etherington said: ‘The Work Programme is clearly not working well enough for many people that are struggling to find and stay in stable employment. Charities involved in the programme have been sounding the alarm bells on this since day one and the NCVO has consistently been calling for changes to improve the programme.

‘The employment market, at present, is incredibly tough and the government, the private sector and charities need to work together to ensure the scheme delivers for job-seekers.’

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