Work programme: Grand claims and fine print


Employment Minister Chris Grayling described the Work Programme as revolutionary

Never knowingly undersold, coalition policies often come with a claim for epochal significance.

So it is with the Work Programme, described as: the centrepiece of the most sweeping welfare reform for 60 years; restoring the system to its founding principles; the most ambitious back to work programme this country has ever seen.

Schemes to help people move off benefits and into employment have been delivered through government contracts with the public, private and voluntary sectors since the 1990s, of course.

What the coalition government has done is scrap all those and create a single programme with a new badge, a new funding model and new ambition.

Clearly, ministers haven't got any spare cash to spend on employment schemes right now so they have changed Whitehall spending rules so they can effectively move money from welfare into work, taking cash from the Treasury's welfare pot and moving it into the Department of Work and Pensions coffers.

Chris Grayling: "We're only paying the bill once someone is established in work."

The Labour government had started experimenting with this idea but the coalition has gambled that, even in the current economic climate, the Work Programme will save enough from the benefits bill in the future to justify agreeing deals now.

So, it is full steam ahead with seven-year contracts which could be worth three to five billion pounds. Companies have been falling over each other for a slice of the action and big winners include familiar private sector employment firms like A4E and Ingeus as well as outsourcing giants G4S and Serco.

Announcing the contracts, the government headlined it as a "massive boost for the Big Society"; emphasising how 300 voluntary groups will be involved.

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It will be in the fine print of the contracts that the grand claims for the Work Programme will be decided”

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But the Work and Pensions Select Committee recently noted that out of the prime contracts, 88% went to profit-making companies and reported concerns that charities were being used as "bid candy", private sector bids being 'window dressed' with a touch of voluntary sector involvement.

It was also pointed out that requiring prime contractors to have an annual turnover in excess of £20m excluded many charities which had successfully delivered programmes under Labour's New Deal scheme.

The contracts are run not only on a payment-by-results basis but also on what's called the black box approach. This means government won't tell suppliers what kind of support they need to give, promising not to interfere in the running of schemes.

Ministers say they are interested in "outcomes" - believing that, left to its own devices, the scheme can support a million people from welfare dependency into work in the next two years with at least a million more to follow.

They stress that only a tenth of the contract money is paid up front with the suppliers taking much of the early risk. Additional payments are based on actually getting the unemployed into jobs and maintaining them for up to two years. There is extra cash for successfully finding employment for 'hard-to-reach' groups.

Nevertheless, the laissez-faire philosophy has added to concerns that suppliers might pressurise vulnerable individuals into taking unsuitable jobs or simply ignore people who need the most support.

The scheme does amount to a step-change in the way employment schemes operate, but also represents a gamble. It will be in the fine print of the contracts that the grand claims for the Work Programme will be decided.

Mark Easton Article written by Mark Easton Mark Easton Home editor

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  • rate this

    Comment number 42.

    I have my first appointment with my "case manager" on 25/10/11, I have already been warned that their priority is to put me on a sanction unless i allow them to pimp me out for my JSA at 55p per hour.

  • rate this

    Comment number 41.

    Why bother bringing the unemployed into it, just give taxpayers money to the private sector and be done with it, the work programme was created by the conservatives to milk the taxpayer, feed the fat cats who contribute to the tory coffers who have distorted the unemployment figures in a labour market that does not exist.

  • rate this

    Comment number 40.

    Those who praise these private welfare to work companies involved in the WP should beware. The Jobcentre had considerably better results than thier private sector counterparts in the past.

    Not only do have these w2w companies have a bad track record delivering the New Deal and Flexible New Deal, they are being rewarded with YET MORE contracts under the WP!

  • rate this

    Comment number 39.

    I would just like to put readers of the article concerning the Work Programme right, as to how the government have been able to afford the setting up of the Work Programme. For the past twelve months the DWP have been instructing staff in Job Centres throughout the UK, to lie,con,cheat and trick claimants out of their benefit and subsequently put them on a sanction.

  • rate this

    Comment number 38.

    This inititiave may give too much power to the employers. Whilst people may seek jobs, their desperation for a stable income (and to recieve the payments from the government) could result in taking a lower wage as companies use their negotiating power to knock down salaries. But perhaps, this is solution is the least of several evils, and the only credible solution to the unemployment crisis.

  • rate this

    Comment number 37.

    All these schemes are a waste of time and taxpayers money if the jobs aren't there in the first place.

    456,000 jobs available

    2.43 million unemployed

    It doesn't take a genius to do the maths.

  • rate this

    Comment number 36.

    welfarepro-please feel free to prove a tax payer I'd like the police to investigate your alleged fraud.

    how long before the u turn?

    won't be long before we hear of the billions stolen from the taxpayers to line the pocket of shareholders.G4 and serco?are you having a laugh.

  • rate this

    Comment number 35.

    This no doubt explains why the private company funded by DWP is pushing my (adult) son to take a job that they claimed was 16 hrs a week but is actually only 7 hrs, at just above minimum wage?
    He will then be 'employed' and so they will get paid.
    And he will lose any support for getting a real job, to earn enough to live on.

  • rate this

    Comment number 34.

    The programme would not be needed at all if the govt made sure that immigrant workers in UK are required to do what most British workers overseas have to do (including most of those British workers now in other EU countries) - that is to purchase private health care ins.

    This would ensure more jobs for British workers and go some way towards a level playing field on global health care costs

  • rate this

    Comment number 33.

    30 DeusExMacintosh
    "So why not voucherise the Work Programme, allow claimants to pick their provider and thus convert ALL the participants into volunteers?"

    I can see the logic of that but suppose they choose no provider at all ? Then if they are forced to, they are not volunteers

  • rate this

    Comment number 32.

    This will be remembered as the worst thing that happened in terms of social justice. The state abandoned it's responsibility for FULL EMPLOYMENT in the late seventies. This is not a party political issue, and I think the negligence of the general public is lamentable. There cannot be full employment, that is what technological progress does.Full employment 30 hour week would be much more honest.

  • rate this

    Comment number 31.

    I'm sorry, payment by results? No government intervention or oversight? This is going to be a rip-off.

    Remember what happened with the TECHs?

  • rate this

    Comment number 30.

    The biggest difference in outcomes is not determined by private vs voluntary sector origin of provider but by whether or not the participant is a 'mandatory' or 'voluntary' one (13% success rate vs. 39% for Ingeus Pathways to Work in Edinburgh). So why not voucherise the Work Programme, allow claimants to pick their provider and thus convert ALL the participants into volunteers?

  • rate this

    Comment number 29.

    Providers are at risk for financial failure, no matter that Mr Grayling says Office for Budget Responsibility is projecting extra 1M jobs. Mr Grayling says providers were expected to take on 620,000 people this year, same next year, creating “the biggest employment program this country has ever seen”.
    Have any regular staff been made redundant to create program slot? Anybody checking?

  • rate this

    Comment number 28.

    Payment-by-results means providers are under risk that project may fail, which I think means providers might be out-of-pocket.
    So the program is front-end loaded, dependent on early success. In these bad economic times, I don't know if I would take the risk.
    Providers have qualified to provide the service under a framework, but have the potential employees been prepared?

  • rate this

    Comment number 27.

    Providers paid relatively small sum (10%) potential earnings for taking unemployed & people who have been on incapacity. Providers are given almost complete freedom on program design; they get another payment, about 25% of total potential earnings, when they get someone into a job. The maximum – @ £2,200 for young person up to @ £14,000 for the hardest to place.
    Weakness: the program design.

  • rate this

    Comment number 26.

    The people this is claimed to be aimed at, people who are fit and able to work, will, by and large be unaffected by it. They will stick 2 fingers up to sanctions and continue working their black market jobs and pay no tax and NI contributions. They will continue to get their families child benefit because the coalition did not want to means test that as it would upset the middle classes!

  • rate this

    Comment number 25.

    The problem with this scheme is the way they propose to pay these businesses for "work placement". They will always get a payment for each claimant passed to them with extra for "difficult to place" cases. This is what they mean by payment by "results", it does not mean any of the claimants will actually get jobs. So for these big businesses like Ingeus etc it will mean money for nothing!

  • rate this

    Comment number 24.

    "...the most ambitious back to work programme this country has ever seen..." Says who? I remember initiatives aimed at creating real jobs, not starving people into near-slavery. Depends on what your "ambitions" are, I suppose.

  • rate this

    Comment number 23.

    Two favourite solutions here seem to be controlling imports or paying more Job Centre people.

    We can't control imports because we're in the WTO.

    My personal experience with unemployment is that however well intentioned the JC people are, the whole thing is not well organised. As ever with the public sector, their senior management is not up to it.

    There has been no Darwinian winnowing of them.


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