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The Government’s Work Programme

Rolled out by the government in June 2011, The Work Programme is a shift in focus for welfare-to-work schemes that rewards the provider almost entirely in the form of results based payments. This compares to previous systems where service providers were paid significant fees up front for each participant that they helped.

The Work Programme also promises to give providers the flexibility to tailor services based on their own knowledge and experience of the areas they are working in. Moving away from a one size fits all approach is designed to give better results at a lower cost to the taxpayer.

Who Is It Designed For?

The Work Programme’s intended role is to assist those people who are long term unemployed and those at risk of becoming so.

This includes those who have been on Jobseeker’s Allowance for between 9 and 12 months (depending on their age), people receiving Employment and Support Allowance, and certain individuals on Income Support or incapacity benefits.

Who Provides These Services?

The organisations that deliver The Work Programme are diverse, but there are a total of 18 “Prime” providers across the country who have 40 regional contracts between them. The majority of these organisations are private companies, but two are from the voluntary sector and one is a public sector group.

But there are many other organisations involved in the supply chains of these 18 primary providers. There are over 1,000 of these in total and around 500 are from the voluntary sector.

Every company, charity or public sector body providing The Work Programme must meet a minimum standard of service set out by the government.

What Makes It Different?

There have been many attempts made by successive governments to tackle the problem of long term unemployment, but The Work Programme is said to be different (and supposedly more effective) for 3 main reasons:

1. Payment is primarily on results

Because providers will get the vast majority of their income from each participant only when they have found work and remained in it for a significant period of time, the incentives are there to not only find someone a job, but find them a suitable one that they can hold down.

This differs from previous schemes such as the New Deal where an up front payment formed much of the reward for providers.

What’s more, there isn’t a set fee per participant; instead there are different rates depending on the distance a participant is from the labour market. In other words, someone who has been out of work for a period of many years, or somebody who is at a disadvantage in the job market because of disability will attract a higher payment than someone who has only been on JSA for 9 months.

Finally, each region has at least 2 competing providers and every year the number of people being referred to each will be shifted by 5% in favour of the better performing one. This gives providers an incentive to constantly improve their service so as to attract more participants.

2. Providers are given more freedom

Rather than force providers to stick to a rigid system where each participant was treated the same and given an almost identical service, The Work Programme encourages providers to use their skill and expertise to tailor their offering to each individual.

This flexibility has been designed into the programme because the realisation is that not only do labour markets vary from area to area, but people and their needs do too, and taking a one size fits all approach was not suitable.

3. Providers have been given a long term commitment

Each of the “Prime” providers has been given a 5 year contract which is designed to enable them to build long standing relationships with all the other organisations in their supply chain.

Because of the way the remuneration of the programme works, providers could be in contact with each of their participants for many years so ensuring long term stability is essential for success. The relationships that grow from this ongoing support will play an important role in ensuring that participants both find work and remain in it.

So How Is It Performing?

The Work Programme has come in for its fair share of criticism since it was launched, but improvements are being seen and the government expects this trend to continue.

The National Audit Office (NAO) conducts regular investigations into the performance of the programme and its latest findings, from July 2014, highlighted the following:

  • the rate at which participants in the easier-to-help payment groups find and remain in work is about the same as those of previous schemes
  • a report from the Department of Work and Pensions (DWP) suggests that the rewards for a number of participants successfully finding a job have not been claimed by the provider – these unreported job outcomes may be skewing the data (although the NAO notes that the number of eligible claims not made under previous schemes is not clear)
  • the rate at which participants in the harder-to-help payment groups find and remain in work is far lower than government expectations before the programme was introduced and is on par with previous schemes
  • there are some positive signs that The Work Programme has improved on previous welfare-to-work schemes, but it has failed those in the harder-to-help groups who may now be receiving less support than before