Work Programme

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The Work Programme involves the 'contracting out' of the task of getting the long-term unemployed into work from state organisations such as Job Centre Plus (pictured) to private and third sector organisations.
The Work Programme is a government welfare-to-work programme introduced in Great Britain in June 2011.[1] Under the Work Programme the task of getting the long-term unemployed into work is outsourced to a range of public sector, private sector and third sector organisations. The scheme replaces a range of schemes which existed under the previous Labour government including Employment Zones, New Deal, Flexible New Deal and the now abolished Future Jobs Fund scheme which aimed to tackle youth unemployment. The Work Programme has been the subject of a number of criticisms surrounding its effectiveness. However, the Department for Work and Pensions website highlights examples of people who have been helped into full-time work through participation in the programme.[2] The programme is, along with the recently introduced Universal Credit, a major aspect of the UK Coalition Government's welfare reform programme.

Participation

Individuals may be mandated to take part in the Work Programme if they are in receipt of Jobseeker's Allowance:

  • after three months if not in education, employment or training
  • after nine months - if aged 18 to 24
  • after 12 months - if 25 or over[3]

Suppliers

Below is a list of providers under the Work Programme for each area of Britain. Note that these "primes" may sub-contract some cases to other providers.

Criticism

Opposition to workfare

Further information: Workfare in the United Kingdom

Some criticisms of the Work Programme reflect a more explicitly political objection to what these critics view as workfare. John Downie of the Scottish Council for Voluntary Services has argued that workfare is effectively a "handout to business" whereby taxpayers are subsidising the wage bill of the private sector. Downie also argues that the Work Programme exploits unemployed people desperately seeking work, and that it further provides a disincentive for employers to create jobs.[5] The anti-workfare group Boycott Workfare make similar arguments stating that workfare replaces jobs and undermines wages.[6]

Allegations of conflict of interest

The Guardian has reported that several high profile donors to the Conservative Party have made money from workfare contracts. Sovereign Capital, set up by Ryan Nash and Ryan Robinson is a company owned by Employment and Skills Group. This group was awarded a £73 million workfare contract.[7]

Failures to create a viable market

In November 2013 Deloitte sold its 50% stake in the Work Programme contractor Ingeus. Critics argued that this showed the government have failed to create a viable market in the welfare-to-work industry. Alastair Grimes from the consultancy Rocket Science has stated: "I'm not aware of people who are making money out of the Work Programme".[8] However Employment Minister Esther McVey has argued that the sale shows the success of the Work Programme, with Deloitte exiting when their business was performing well.

Debate over effectiveness

A 2012 report found that only 18,270 people out of 785,000 people enrolled on the Work Programme had held down employment for six months or more - a success rate of 2.3%.[9] Given that 5% of the long-term unemployed would be expected to find employment if left to their own devices the Work Programme can be considered less successful than doing nothing at all.[10] However, Employment Minister Mark Hoban has argued that "as the Work Programme supports people for two years or more...it is too early to judge Work Programme performance by Job Outcome and Sustainment Payment data alone."[11]

In February 2013 the Public Accounts Committee of the House of Commons revealed that the Work Programme had only got 3.6% of participants off benefits and into secure employment during the first fourteen months of its operation. The Department for Work and Pensions had set a target of 11.9%. The Chairman of the PAC Margaret Hodge has described the performance of the Work Programme as "extremely poor"[12] In May 2013 the House of Commons' Work and Pensions Select Committee published a report critical of the Work Programme which described the performance of Work Programme contractors as variable in quality. The report also stated that specialist services dealing with problems such as drug dependency and homeless were underused and that specialist subcontractors received a raw deal.[13] In September 2013 A4E had its number of referrals cut for poor performance.[14]

Lack of funding

A further analysis by the Public Accounts Committee found that the service that the Work Programme can offer has been negatively affected by a lack of funding and that in some instances there was not enough money to provide interpreters to those with poor English language skills. The report suggests that the level of support that the Work Programme can offer has been negatively impacted by the sheer number of people requiring help.[15]

The report states:

"Particular issues reported as resulting from a lack of funding included an inability to pay for interpreters and for participant transport in rural areas. Some subcontractors felt this also had an impact on their ability to meet the needs of particular groups of participants."[15]

Impact on charity sector

The Work Programme has been blamed for the closure of some charities who have criticised the way in which WP contracts are structured.[16]

Drafting of legislation

Further information: Caitlin Reilly and Jamieson Wilson v Secretary of State for Work and Pensions

The workfare element of the Work Programme was ruled 'ultra vires' in a 2013 Court of Appeal judgment which stated that the Jobseeker’s Allowance (Employment, Skills and Enterprise) Regulations 2011 did not describe the employment schemes to which they apply, as is required by the primary legislation.[17] The Secretary of State for Work and Pensions Iain Duncan Smith responded to the Court of Appeal judgment by announcing emergency legislation in order to correct this. He also appeared to attack the utility of geology as a profession when attacking unemployed geology graduate Cait Reilly who had challenged the workfare scheme.[18] His remarks were criticised by the Geological Society of London.[18]

Payment-by-results

It has been argued that payment-by-results whereby companies only get paid for finding people work has meant that they focus on the "easiest" cases among the long-term unemployed with the most "difficult" effectively sidelined. The term "creaming and parking" has been used to describe this process.[19] The Department for Work and Pensions have denied that "parking" is an issue. A study by the Third Sector Research Centre at Birmingham University found that widespread "gaming" of the Work Programme by private sector providers. They argue that because providers are not paid until an unemployed person has been in work for two years it makes little economic sense to concentrate on the most "difficult cases". The study also found that the largest private sector providers known as "primes" were guilty of passing more difficult cases onto sub-contractors. Furthermore "parking" means that charities are not getting referrals under the Work Programme as such customers are not considered likely to result in a payment for the provider.[20]

One interviewee told the study:

"It's not being PC but I'll just say it as it is … you tend to get left with the rubbish; people who aren't going to get a job … If the [prime] thought they could get them a job, they wouldn't [refer them to] someone else to get a job."[20]

Journalist Richard Johnson writing in The Guardian argues that the tendering process for Work Programme contracts meant that those companies that submitted the cheapest tenders were successful something that encourages "parking and creaming".[21] Those driven to submit the cheapest tenders did not have any other business outside of welfare to work and either secured Work Programme contracts or closed. Discounts on the base price of over 30% were offered by some bidders, but with the discounts kicking in in the later years of the contract - when the financial viability of the contracts may be at risk.

See also

  • Graduate unemployment in the United Kingdom

References

  1. ↑ http://www.dwp.gov.uk/docs/the-work-programme.pdf
  2. ↑ Real life stories from the Work Programme - DWP
  3. ↑ Help with moving from benefits to work - GOV.UK
  4. ↑ 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 http://www.dwp.gov.uk/docs/cpa-preferred-bidders.pdf
  5. ↑ John Downie: The Work Programme is about handouts to business, not jobs for people - News - Scotsman.com
  6. ↑ http://www.boycottworkfare.org/?page_id=663
  7. ↑ Firm established by two Tory donors made millions from work schemes | Politics | The Guardian
  8. ↑ http://www.bbc.co.uk/news/business-24806973
  9. ↑ Flagship work programme a miserable failure | Reuters
  10. ↑ Iain Duncan Smith’s Work Programme 'worse than doing nothing' - Telegraph
  11. ↑ Work Programme: why I knew the figures would be awful | Zoe Williams | Comment is free | The Guardian
  12. ↑ http://www.bbc.co.uk/news/uk-politics-21532191
  13. ↑ http://www.guardian.co.uk/society/2013/may/21/work-programme-failing-taxpayer
  14. ↑ http://www.bbc.co.uk/news/uk-politics-24286806
  15. ↑ 15.0 15.1 http://www.guardian.co.uk/society/2013/apr/14/work-programme-jobless-people
  16. ↑ BBC News - Work Programme under fire as charities shut down
  17. ↑ DWP Response To Todays #Workfare Judgement
  18. ↑ 18.0 18.1 Geologists erupt after Iain Duncan Smith shelf-stacking jibe | Science | guardian.co.uk
  19. ↑ Is the Work Programme solving disability unemployment? BBC reports on ‘parking’ accusations and more | Inclusion
  20. ↑ 20.0 20.1 Most vulnerable jobseekers 'too costly' for Work Programme providers
  21. ↑ The Work Programme's only success is at 'creaming and parking' | Richard Johnson | Comment is free | guardian.co.uk

External links

Workfare Programmes
Workfare Providers ('Primes')
Workfare Companies
Opposition
Litigation
Legislation
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