Figures for the second year of the Government’s flagship Work Programme back-to-work scheme were released this morning. With the vast array of numbers and percentages flying around, it can be hard to know what to conclude about how the programme is doing. So here are some of the things we can and can’t conclude from the numbers.
Performance is below government expectations
Most providers are performing well below DWP’s expectations of what they would achieve. For Sickness benefit claimants, the under-performance is most striking. A handful of providers have performed well relative to the department’s minimum levels.
Providers aren’t necessarily doing a bad job
The disappointing figures do not mean that providers are doing a bad job or that the scheme offers poor value for money: we simply do not know whether an alternative approach would fare better or worse in current economic conditions. All we know is that they’re worse than the Government expected them to be.
DWP has unintentionally slashed services to the long-term unemployed
What we can say from the figures is that the scheme was poorly designed with serious consequences for long-term unemployed people.
The DWP’s contractual minimum levels appear to have been plucked from thin air. Since providers are paid primarily for job outcomes, funding for this vital service for long-term unemployed people was always anchored on the expected performance level, which now appears way too optimistic. Since low levels of job outcomes cut provider revenues, spending on frontline services and support to jobseekers is substantially lower than the DWP had planned. In fact, DWP handed back £248m – around a third of planned Work Programme spending for 2012-13 – because outcomes were so much lower than anticipated.
This is much more serious than a minor technicality: by miscalibrating Work Programme expected outcomes, DWP has unintentionally cut around one-third from spending on unemployment services. Past experience in previous recessions has shown that this is exactly the opposite of what should be done to avoid substantial human, social and economic costs lasting well into the future.
There are encouraging signs that the scheme can improve services for unemployed people
Perhaps one of the most encouraging signs for the future is that some providers are performing very much better than others. Indeed for the JSA 25+ group – the main adult jobseeker category – the top provider is doing about twice as well as the worst performer. This means that the scope for learning about how to improve employment services (and kicking out poor performers) seems to be substantial.
Ultimately this is what the Work Programme is all about: using a market to reward providers who are effective at helping unemployed people, and penalising or removing the ones who don’t serve their clients well. If providers can learn from the best, the government will deserve credit for creating a system that can innovate and improve services to long-term unemployed people. That would be a big step forward.