The Work Programme was introduced in June 2011 to help long-term unemployed people move off benefits and into sustained employment. It is estimated to cost between £3 billion and £5 billion over five years. In November 2012, the Department for Work and Pensions (the Department) published its first set of data on the Work Programme's performance. Our report considers the performance to date and builds on our earlier report, in May 2012, on the Work Programme's design and early implementation.
The Work Programme's performance for its first 14 months of operationfrom June 2011 to July 2012fell well short of the Department's expectations. Overall, only 3.6% of claimants on the Programme moved off benefit and into sustained employment, less than a third of the 11.9% the Department expected to achieve, and well below the Department's own estimate of what would have happened if there had been no Work Programme running at all. The Department had said that 9.2% of the largest group of participants would have moved off benefits and into work with no intervention at all.
Individual Work Programme providers' performance in helping claimants into employment varies widely, but not one of the 18 providers has met their contractual targets. The Department does not consider that current labour market conditions are the reason for the Programme's under-performance. The Department attributes the differences in performance between providers to their different approaches and different levels of competence. The Department must do all it can to examine which approaches are working best and which are not working. Good practice should be identified and shared, but failing providers should be held to proper account.
The difference between actual and expected performance is greatest for those claimants considered the hardest to help, including in particular claimants with disabilities. The Department's own evaluation suggests that these claimants have been receiving a poor service from providers. Creaming and parking are clear policy concerns which we share with the Department. Despite assurances that it would do so, the Department has not provided the further analysis which would demonstrate whether or not creaming and parking was taking place.
Given the poor performance across providers, there is a high risk that one or more will faileither they will go out of business or the Department will cancel their contracts. Recognising that some providers might fail, the Department told us that it has processes to manage the impact on claimants should this happen. The Department will need to keep a close eye on which providers are most likely to fail and must manage all consequential risks..
We are concerned about the Department's approach to publishing performance statistics. In publishing its data the Department did not make clear what level of performance it had been expected or say why performance was lower than planned. Yet it did publish unvalidated information on performance produced by a trade body.
On the basis of a commentary from the Comptroller and Auditor General, we took evidence from the Department for Work and Pensions on the performance of the Work Programme.