Media Release

Work Programme performance improved but providers still risk contract termination

New official figures on the second year of the Government’s flagship back-to-work scheme, the Work Programme, demonstrate that while performance is greatly improved on the first year, many providers are still at risk of contract termination due to under-performance against arbitrary DWP criteria, according to the Social Market Foundation.

The think tank, which predicted performance troubles for the scheme back in 2011, has shown that in over half of contracts providers failed to meet the Government’s minimum performance levels for the main group of jobseekers in the scheme’s second year, and that all providers failed to meet these levels for people on sickness benefits, with the average provider achieving less than one third of the minimum expectation for this group.

Ian Mulheirn, SMF Director said:

Compared to the scheme’s first twelve months, Work Programme providers have clearly improved in getting people lasting jobs during the second year of the scheme. But on average providers have still failed to meet the minimum levels of performance expected of them by the Government, threatening many with contract termination.

Performance against expectations was poorest for the group of jobseekers on sickness benefits (ESA claimants), where all providers failed to meet minimum levels.

Commenting on this, Ian Mulheirn said:

At a time of high unemployment it is unsurprising that people furthest from the labour market are at the back of the queue when it comes to finding jobs. But three conclusions are clear. First it shows that DWP was guessing when it set these minimum performance levels. Second it further underlines why it makes no sense that the Government’s expectations have not been revised in line with the performance of the economy. And third, it shows that there simply isn’t enough money in the Work Programme to help these people to the front of the jobs queue.

The SMF pointed out that this says more about the design of the scheme than an absolute judgement on provider performance, highlighting that the minimum levels set out in Work Programme contracts are arbitrary and too rigid.

Ian Mulheirn continued:

Poor performance against the DWP’s minimum levels cannot be taken as evidence 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.

But what it does show 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 calibrated to 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 – even after deep planned cuts to spending on such programmes. 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.

Notes to Editors

  • In November 2012 the Government published a performance level of 3.5%. This was the number of successful job outcomes per referral to the scheme over its first fourteen months. The UK Statistics authority pointed out that this was not a clear measure of performance and that a better measure would be the percentage of people referred to the scheme who had achieved sustained employment one year on. On this measure, provider performance has grown from 8.5% to 13.4% over the scheme’s lifetime so far. However, in terms of the measure of performance that providers are assessed on by the DWP, all that matters is the Key Performance Measure: the number of job outcomes achieved in the contract year divided by the number of referrals in that same year. DWP has set its contractual performance expectations of providers on this basis. Failure to meet minimum performance levels on this measure carries with it the risk of contract termination. The minimum level for the JSA 25+ group is 27.5% for year 2.
  • 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


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