New figures on the first year of the Work Programme show that the scheme has found sustained work for just 2.3% of jobseekers in its first twelve months compared to the 5.5% minimum expected by the DWP.
Commenting on the figures, SMF Director Ian Mulheirn said:
“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 eleven in every 200 jobseekers in the first twelve months of the scheme.
“That providers have failed to achieve even half of this raises serious questions about the DWP’s expectations for the scheme. As previous SMF research has highlighted, the DWP’s expectations were nowhere near what past programme performance would suggest is achievable. The result is that providers have been set up to fail.
“Failing to get jobseekers into long-term employment carries with it an enormous human, social and economic cost. By tying funding for employment services to job outcomes and calibrating payment to absurdly over-optimistic targets, the DWP is now spending far less on helping those excluded from the labour market than it thought it would be.
“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 front-line unemployment services at times of high unemployment and increasing it when jobs are plentiful.”
Commenting on the impact of the scheme on the third sector, Ian Mulheirn said:
“By loading financial risk for achieving job outcomes onto providers, and washing its hands of how those risks are managed, the DWP is allowing huge financial risks to be passed down to small sub-contractors. Many of these are community sector groups who are not equipped to carry the cost of providing services for which they subsequently don’t get paid.”
The DWP’s figures suggest that providers did not achieve the number of that would have occurred had there been no back-to-work support. Commenting on this, Ian Mulheirn said:
“DWP’s assumptions of what would have happened with no Work Programme appear to be conjured from thin air. We cannot judge how much value providers are adding by comparing their performance to arbitrary and unrealistic figures.”
The Social Market Foundation suggests three radical changes to the Work Programme in response to these poor figures.
- The Government should consider introducing a relative performance measure among providers. This would entail a proportion of providers’ payments being based on their performance compared to that of other providers.
- A re-engineered Work Programme should examine how to prevent excessive financial risk of failure being passed down from prime contractors to sub-contractors.
- A review of the Work Programme should consider reducing the amount of the payment that is provided on an outcome basis while unemployment remains high.
Notes to Editors
- Today’s DWP Work Programme figures provide information on the job outcomes achieved by Work Programme Providers cumulatively (in the fourteen months from June 2011 to July 2012) and monthly. In order to assess how well the providers have been doing against benchmarks set for them by the DWP, it is necessary to look at job outcomes achieved in the first twelve months (i.e. June 2011 to May 2012) as a proportion of referrals in the same period. On this, the performance level for all groups is 2.3%, compared to the DWP’s minimum of 5.5% for the first year.
- The DWP Invitation to Tender specifies minimum performance expectations for three jobseeker groups. Of these JSA 25+ is the largest. The following table compares minimum performance expectations with actual performance after twelve months
- In 2011 the Social Market Foundation produced the first analysis of likely performance under the scheme. We showed that if providers’ success at finding people work under the new scheme was similar to that of the previous scheme most Work Programme providers would fail to meet the minimum performance levels expected of them by the DWP.
- The SMF has produced a briefing to accompany publication of the Work Programme figures, which is available to download here.
