The Work Programme
2 Jul 2014 11:39 AM
Full report: The Work
Programme
After a poor start, the
performance of the Work Programme is at similar levels to previous programmes,
according to a report today by the National Audit Office. Current published
data may understate actual job outcomes and the DWP is also forecasting further
improvements. At the same time, the Department has reduced costs and the risks
of paying for poor performance. If the Department can achieve the much higher
rates of performance that it now expects for the remainder of the Programme,
the Programme has the potential to offer value for money.
Performance in getting people
seen as easier to help into work has improved since the first published data.
Of those people claiming Jobseeker’s Allowance aged 25 and over, 27 per
cent of people who have completed the programme have moved into employment
lasting 6 months or longer. This is similar to previous comparable programmes
but is less than the Department’s original forecast (39 per cent),
minimum performance levels (33 per cent), and bidders’ original
expectations (42 per cent). Recent performance shows signs of improvement and
the Department expects this trend to continue.
The Programme has, however, not
improved performance for harder-to-help groups compared to previous schemes.
The Department designed the Programme to help participants whose barriers to
employment mean that it is more difficult for them to move into employment.
However performance has been similar to previous initiatives and falls well
short of the Department’s and bidders’ expectations. Prime
contractors have reduced what they plan to spend on the hardest-to-help, with
support for these participants lower than for those with better employment
prospects.
The Work Programme is also not
working as the Department intended in the way it rewards contractors for
performance. Flaws in contracts and performance measures have led to
unnecessary and avoidable costs. The Department may have paid contractors
£11 million in the period to March 2014 for performance they may not have
actually achieved and could overpay contractors £25 million over the
remainder of the Programme unless it changes its approach. The Department has
recognised where it has needed to make changes to contracts. It has been
actively negotiating with contractors to make improvements but it is not yet
clear how much the Department will need to compensate contractors for
changes.
"The Work Programme
has improved on its poor start with performance to date reaching that of
previous schemes. There are signs that performance is still improving. The
Department must now deliver the significant increases in performance it
expects, in particular improving outcomes for harder-to-help
groups."
Amyas Morse, head of the
National Audit Office, 2 July 2014
Notes for
Editors
£2.8bn
Department's forecast -
total payments to prime contractors, June 2011 to March 2020
2.1m
Department's forecast -
referrals to the Work Programme, June 2011 to March 2016
£450m
Department's forecast -
total savings to benefit spending from the Work Programme compared to the
baseline agreed with HM Treasury
296,000
span>
People secured job outcomes up
to March 2014
£41
million
Saving on the amount the
Department would have spent between June 2011 and March 2020 for similar levels
of performance on previous welfare to work programmes
212
Minimum service standards that
prime contractors proposed in their bids
£11
million
Estimated cost of sustainment
payments up to March 2014 where the Department cannot confirm
employment
£21
million
Saved by the Department by
extrapolating invalid job outcome payments and reducing payments to prime
contractors accordingly
£31
million
Likely total cost in 2014-15 of
incentive payments to prime contractors to reward high
performance
1. The Work Programme offers
support to unemployed people who have been claiming Jobseeker’s Allowance
or Employment and Support Allowance to help them get and to keep jobs. The
Department expects to refer 2.1 million people to the Programme between June
2011 and March 2016, at a total cost of £2.8 billion. The Programme is
delivered through 18 contractors with 40 separate contracts.
2. Press notices and reports are
available from the date of publication on the NAO website, which is at
www.nao.org.uk. Hard copies can be obtained by using the relevant links on our
website.
3. The National Audit Office
scrutinises public spending for Parliament and is independent of government.
The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of
the House of Commons and leads the NAO, which employs some 820 employees. The
C&AG certifies the accounts of all government departments and many other
public sector bodies. He has statutory authority to examine and report to
Parliament on whether departments and the bodies they fund have used their
resources efficiently, effectively, and with economy. Our studies evaluate the
value for money of public spending, nationally and locally. Our recommendations
and reports on good practice help government improve public services, and our
work led to audited savings of £1.1 billion in 2013.