The government’s Work Programme give monetary incentives to private and not-for-profit providers for getting the unemployed into work. However, the Social Market Foundation’s, Ian Mulheirn discusses new research which finds that the programme is now at risk of financial collapse due to contractors failing to meet the minimum requirements to due to the unreachable performance standards expected of them. Such a collapse would be bad for job-seekers, subcontractors and the taxpayer.
The Government’s flagship back to work scheme, the Work Programme, is in peril. The bold new scheme, which pays private and not-for-profit providers by results for getting the long-term unemployed into work, looks likely to substantially undershoot the Government’s expectations, putting it at risk of financial collapse.
That’s according to new research published by the Social Market Foundation (SMF) today. Our paper, Will the Work Programme Work? examines the viability of Work Programme by forecasting the likely performance of the providers during its first three years, based on the actual performance achieved under Labour’s welfare to work scheme and the forerunner to the Work Programme, the Flexible New Deal (FND).
The analysis suggests that providers won’t hit the Department for Work and Pensions’ (DWP) minimum expectations in years one and two of the Work Programme, and even by year three, 22 out of 24 FND contractors would have failed to meet the minimum requirements of the new flagship scheme. As the Department has threatened to terminate the contracts of providers who do not meet these challenging benchmarks, this threatens the viability of the policy. The likely performance levels also mean that funding per jobseeker on the scheme will be significantly less than anticipated, creating real problems for private and voluntary sector providers already operating on extremely tight funding.
But anyone listening to this morning’s Today programme will have heard Employment Minister Chris Grayling dismiss this research as ‘flawed’, claiming that it is impossible to compare the Work Programme to FND. Grayling’s argument centred on the point that FND involved different groups of jobseekers to the Work Programme and that comparison of the schemes was therefore impossible. It’s true that the Work Programme caters for a larger group of jobseekers than did its predecessor – including sickness benefit claimants as well as the long-term unemployed. But SMF’s analysis is carefully based on comparable groups of long-term unemployed people – the main group helped by the new scheme.
While these groups of jobseekers are comparable, differences between the two programmes remain. But our analysis takes these into account to predict Work Programme performance based on the FND implied success rates. Even on optimistic assumptions, it concludes that the Work Programme performance targets are impossible for most providers.
Grayling’s objections, therefore, don’t stack up. And it’s not just the SMF that have raised concerns about performance levels. The Work and Pensions Committee of the House of Commons recently demanded clarity over how the DWP have come up with these challenging targets, and many providers have themselves expressed their doubt that the scheme will work. In the deteriorating economic climate, with the claimant count having risen by almost 110,000 since bids to deliver the Work Programme were invited, its future looks precarious.
Widespread provider failure or a late bailout would be bad for jobseekers, expensive for the taxpayer and fatal for many subcontractors, especially not-for-profit providers. In the light of this new evidence and the deteriorating labour market outlook, DWP should revise its minimum performance expectations, and introduce more credible incentives. It should also establish greater transparency about how it derived its estimates of minimum performance, and clarify how they would vary if economic conditions deteriorate, to create greater certainty and strengthen accountability. And, to advance the Government’s aim to be the “most transparent government in the world”, DWP should publish monthly provider performance data, starting immediately, not in autumn 2012 as currently planned.
This article first appeared on the Public Finance blog on 22 August.
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it was always a doomed idea. the worrying thing is that so called charities are now fully involved in applying sanctions on vulnerable people for ,non compliance, in effect manufacturing the selfsame problems of poverty that they apparently detested before becoming work programme contractors
I’m a participant on the workprogramme. It’s likely to fail because the activities particiants are expected to do are supposed to be tailored to the individuals needs.
I’ve only had one appointment so far and I’m already feeling a little disengaged from it.
I’ve been required to attend the Work Club – that is to use the facilities to search and apply for jobs. I have no problem in this area or getting interviews apart from the state of the labour market in my sector which is the public sector.
I’ve also been asked to look into and do meditation. I have no idea how this is going to help me get a job!
So both the activities I’ve been asked to do are of no assistance to me whatsoever.
I have recently been placed on the programme and after enduring the last 2 and a half years of unemployment since being made redundant , i am left wondering how long will the providers survive before they are forced to join me in the dole cue !
At my attendance today i was told that they were undermanned after having been forced into making some of THEIR staff redundant due to forced cutbacks!
I entered into the course sceptical about how they were going to help me ( a 58yr old man with lifting and mobility difficulties ) find employment when jobcentre staff have failed , but realise the government were just making it LOOK like they were actually tackling the problem , and by paying on performance , it promises to be almost cost free .
In my opinion , the only way to tackle unemployment , is to invest heavily into creating the industry to tackle our fuel problems , for instance mass production of Solar Panels and training thousands of installation workers to cover every building in Britain.
Changing our power option to Solar would drastically slash our import costs and ensure our future BEFORE the worlds oil and coal supply is all used up !
I have been on the rollercoaster that is the unemployment circus for many years now and I see The Work Programme as another shortsighted attempt at solving the unsolvable (given the lack of investment). If we don’t invest in our unemployed, especially the next generation, we are apt to repeat the errors of the past. But it is no good investing in the unemployed if employment opportunities do not exist for them. Sneaking in the abolition of over 50’s tax credit to save £34m a year has ensured that employment for myself is a pipedream. I have a disability but want to work part-time. Sustainable employment is vital for our continued wellbeing but where are the jobs that The Work Programme will help us into. The programme is using the same unemployed staff that were running the FND programme but under more pressure to pressurise the jobless into any job no matter how unsustainable it turns out to be. To quote Petronius Arbiter, we tend as a nation to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.
I have learned from experience that the only way to get people back into work is to treat them as individuals with their individual skills, issues and needs. At the moment our society is failing us leaving us with little in the way of “future, hope, direction and worth”. This will come back and haunt us in the future, mark my words.
I’m on the work programme and I’ll tell you, IT’S BLOODY USELESS, no help just jobsearch for a couple of hours, once a week.
Shut this a disgracful programme down, the providers advisers couldn’t careless about you as long as you turn up once a week and do a bit of jobsearch.The only one’s who benefit are the private providers (getting paid each week for the incompitent service they don’t even provide)
THE WORK PROGRAMME IS A FAILURE, IT’S EVEN WORSE THAN THE NOW DEFUNKED NEW DEAL PROGRAMME. SHUT IT DOWN.
im on the work programme to, im in my second year and cant wait for it to end, what do they do for me?
i attend an appointment every 2 weeks, she does a job search for jobs which are not on the agreement, give me a bus pass and sends me home, and thats been going on for the last year.
if you got a disability like me your parked to one side, as they dont think your worth bothering with.
After thirty years of the demoralization and mechanization of working people both in and out of work, of summary punishments and petty authoritarianism by business and political elites I suspect few of the many now suffering the ongoing rollercoaster of insecure and low paid employment are going to pay any attention to the continuing fraudulent claims by these new elites.
As to the ludicrous claims for the benefits and advantages of a university education in the job market they should be treated with the contempt they deserve.
There is little evidence that higher degrees advance a claimant’s employment prospects at all, in fact in the United States the professoriate are advising students to think very carefully about taking such degrees, in most cases telling them that they will suffer disproportionately from years, if not decades of unemployment and demotivation. Yet universities still claim, quite fraudulently that
these degrees will benefit them over others not so placed. The reasons given in the United states, where there is growing alarm at the damage done to the external role of the university in the wider social milieu and to its curricular integrity, are that universities have been so weakened internally by the market and by globalised ideology that they are compelled to ‘follow the money’ as well as to keep advancing an imagined status struggle. Yet this is nothing but a deception and a cruel one at that since it involves thousands of young people and their futures, they should be told about what the employment game is really all about.
As to the ‘meritocracy’ that all this prodigious effort is supposed to produce that too is an illusion. To struggle to fit into a mechanized system that is constantly
paring you down to size and draining out every ounce of virtue and goodness
that you have and plugging that emptiness with money, status and power is
to offer yourself as a slave.
Robert Reich (Clinton’s Treasury Secretary) has stated that we need to recover
Keynesian policy and the Welfare State. Through France economists are suggesting that nation-States withdraw from the illusion of globalisation and reinstate their previous national currencies, since the Eurozone is in tatters.
We need to abandon altogether the ‘free movement’ of labour across national boundaries and restrict it to absolutely necessary personnel where there are no
indigenous applicants available. With mechanisation and increasing numbers
needing work there is a huge surplus of redundant labour on top of the vast reservoir of the unemployed kept deliberately out of work throughout the Blair years. The only conclusion now must be to follow John Ralston Saul’s claims that
globalism and globalisation was a huge deception and that recognising that fact
we should now put the last 30 years well behind us.
This is what happens when you privatise employment services. FND failed the unemployed and the coalition’s strategy is premised, as you point out, on the same terms. By privatising these services the state creates commodities of the unemployed, the service providers seek to ‘cream off’ the easiest clients and the barriers to decent work are made no less difficult. Ever since the Freud report of 2006 (written by a businessman for the government) the disciplinarian nature of welfare has accelerated and harsher conditionality and sanctioning now extend to those claiming sickness benefits too. A revision of performance targets downwards is unlikely to solve the problem, essentially the profit motive is contrary to desired welfare outcomes and harsher terms are stigmatizing the poor. And after all, what is the point in paying private firms loads of cash when there is a complete lack of sustainable employment opportunities across the country? If the government wants to provide transparency it should manage employment services itself. Here’s an excellent, short commentary on how dire the situation is: http://www.cpag.org.uk/info/Povertyarticles/Poverty139/CPAG_Poverty139_CanWelfareReformWork.pdf