Conclusions and recommendations |
1. The first set of data on the employment
outcomes achieved by the Work Programme shows that it is performing
well below expectations.
From June 2011 to July 2012, only 3.6% of people referred
to the Work Programme moved off benefit and into sustained
employment, less than a third of the level the Department expected.
None of the 18 providers met their minimum performance targets.
Actual performance was even below the Department's assessment
of the nonintervention ratethe number of people that
would have found sustained work had the Work Programme not been
running. While we recognise that it is early days for the Work
Programme, such poor performance undermines confidence in its
longterm success. The Department needs a better understanding
of the factors that led to early performance being well below
expectations in order to assess whether the longer term targets
for the Work Programme are still achievable.
2. There is substantial variation in the performance
of individual providers. The best performing
provider moved 5% of people off benefit and into sustained employment,
the lowest performing managed only 2.2%. The Department has dismissed
local economic conditions as the reason for variation; instead
it attributes it to the different approaches taken by providers
and the competence of their management. The Department told us
that it is working with providers to ascertain what approaches
are working well and which are not. The Department should put
in place mechanisms to share lessons learned and disseminate good
practice across providers. It should also hold poor performing
providers to proper account.
3. The incentives for reaching the hardest
to help claimants are not working. Early
evidence suggests that the Work Programme is failing those claimants
who are hardest to help, despite the differential payment arrangements
intended to incentivise providers not to neglect this group.
Results for these claimants (those claiming Employment Support
Allowance) were worse than performance for the easier to help
claimants (on Jobseeker's Allowance). The Department's own
evaluation also suggests that the hardest to help are receiving
a poor quality service, with providers focusing on the easiest
to help. There is some emerging evidence that those who are hardest
to help are being parked with minimum support, and therefore little
prospect of moving into work. The Department should identify
why the Work Programme's financial incentives are not working
as intended and, in its formal response to this report, set out
what action it will take to address the problem.
4. Poor performance to date increases the
risk that one or more provider will fail.
A provider that continues to underperform may become financially
unsustainable and go out of business, or the Department may decide
to cancel its contract. The Department will have a better idea
of which providers are at risk of failure when performance data
is available up to March 2013, and it can cancel contracts if
necessary after June 2013, when providers will have had two years
to help their first cohort of claimants. The Department told us
it has procedures for identifying and dealing with provider failure
and that it has in place a framework contract from which it could
appoint a replacement provider. To facilitate swift and tailored
interventions in the event of failure, the Department should,
in the period up to June 2013, monitor contracts to identify
those most at risk of failure and produce contract specific plans
for the steps it will take should failure occur.
5. The Department published performance data
on the Work Programme without sufficient context and explanation.
The Department's failure to publish information
on its own expectations of performance, or an explanation of why
actual performance was worse than expected, hindered a proper
understanding of the Programme's progress. To our surprise
the Department did publish unvalidated information from the trade
body representing providers. It was also in stark contrast to
the Department's willingness to make Parliament and the public
wait for almost four months, hiding behind National Statistics'
requirements, before it published its own data. In future the
Department should release information in a timely manner, and
include details of expected as well as actual performance, explaining
any differences between the two.