The Government’s flagship back to work scheme, the Work Programme (WP), is the most ambitious payment-by-results scheme ever launched in the UK, aiming to help 2.4 million long-term unemployed people find work over the next seven years. In it, private and not-for-profit providers will be paid for each jobseeker they get back into work.
The design of WP drew heavily on the welfare-to-work model proposed by SMF in its 2009 publication Vicious Cycles. Welfare Reform Minister Lord Freud, when in opposition, cited the SMF’s work as a key influence on the policy’s development. Consequently, the SMF feels strongly that this laudable policy should not be derailed by poor implementation.
Funding for the new programme is tight and dependent upon achieving very demanding minimum performance expectations set by the Department for Work and Pensions (DWP). In addition, DWP has threatened to terminate the contracts of providers who do not meet these challenging benchmarks.
In this paper, the SMF examines the viability of WP by forecasting the likely performance of the providers during the first three years, based on the actual performance achieved under the Flexible New Deal (FND), Labour’s welfare to work scheme and the forerunner to WP.