In a review of the government’s flagship Work Programme and the Work Choice scheme for disabled people, the work and pensions select committee said existing contracts were “unnecessarily complicated”.
Under the payment-by-results arrangements, providers in both schemes are paid based on their success in helping people who are long-term unemployed to find jobs. This is intended to incentivise providers to offer tailored support, but the scheme has been criticised, including by some providers, for not being effective.
However, the current payment model was unnecessarily complicated and had not had the desired impact on providers’ behaviour, the Welfare-to-Work report concluded,
The government must learn the lessons when the contracts are replaced in 2017, with a more effective model likely to include more direct financial incentives for providers and earlier referral from Jobcentre Plus, committee chair Frank Field said.
“DWP has so far under-invested in people with more complex barriers to making a swift return to work. This will be the key challenge for the Work Programme’s replacement,” he said.
“A growing proportion of long-term unemployed people have serious barriers to employment and require more intensive and personalised help. The next programme needs to more consistently identify people facing very challenging problems, and provide the right type of help, delivered by the right type of adequately resourced organisations, at the right time.”
The committee suggested grouping claimants into three categories – those who are work ready, those requiring intermediate support and those in need of intensive support. Payments to providers should be higher when they help greater proportions of claimants in the intermediate and intensive support groups into work.
Responding to the report, a DWP spokesman said: “Almost 460,000 of the hardest to help claimants have been supported into employment through the Work Programme. That’s a real success, and we welcome the committee’s finding the programme is better value for money to the taxpayer than any previous scheme.
“The programme helps people to overcome barriers to finding a job, including those with drug and alcohol problems and the long-term unemployed, and further intensive support is offered through Help to Work for those who complete the Work Programme without finding a job.”
