Whitehall urged to scrap welfare-to-work service changes

26 Jul 16

Disabled people will find it more difficult to get back into work unless ministers re-evaluate welfare-to-work plans, retaining the contribution of the private and third sectors, a think-tank has said.

In a report published today, Reform assessed the government’s proposed system of providing employment support services to people receiving disability benefits.

It describes the progress of successive governments in this area as being “inadequate” and “woeful”, evidenced by the fact that case numbers have remained stubbornly high. According to Reform, the number of claimants on working-age incapacity-related benefits in 2014-15 was 2.5 million, down only slightly from 2.8 million a decade ago.

Last year the government announced that, from 2017, both the Work Choice and Work Programme schemes would be combined into the Work and Health Programme, with the aim of cutting costs through efficiency savings.

In the last Parliament, the government spent around £500m on average per year on the Work Programme alone, which was funded by payment-by-results, the report said. However, in this Parliament the government will spend only £120m per year.

The move will also see a reduction in the proportion of welfare-to-work services delivered by the private sector and charities, with much of the responsibility handed over to Jobcentre Plus.  

Reform called this a “backwards step” and said charities and private firms have been able to provide a wider range of specialised services than job centres will be able to offer. Instead, the government should modify the existing programmes delivered by the independent sector, it said.  

Furthermore, the system of payment-by-results under which the Work Programme operated protected taxpayers in the event of poor service from providers. However, when services are provided by Jobcentre Plus, this will no longer apply, meaning taxpayers will be “paying for failure”, Reform said.

The study calls for welfare-to-work services to improve by giving providers additional incentives to return more disabled people to work. One suggestion is for providers to receive progressively greater funding the more people they place in work and the more difficult cases they resolve.

Reform’s report also assesses the role devolution might play in providing welfare-to-work services. Despite an appetite for greater localisation, the welfare budget remained “largely centralised”, which provides a barrier to integrating services at a local level.

Charlottle Pickles, deputy director and head of research at Reform, said: “The government is wrong to revert back to Jobcentre Plus. Outsourced welfare-to-work systems have been highly successful.”

Pickles also highlighted that outsourced services are helping the government keep to its manifesto pledges to close the disability employment gap by half.

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