Department for Work and Pensions: Work Programme outcome statistics - Public Accounts Committee Contents

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 rate—the 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.

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© Parliamentary copyright 2013
Prepared 22 February 2013