1 Improving performance
1. The Department launched the Work Programme
in June 2011 to help long-term unemployed people off benefit and
into sustained employment. The Work Programme's objectives
are to increase the time spent in employment compared with previous
schemes, decrease the time spent on benefit, and narrow the performance
gap between easier and harder to help claimants. The Department
estimates that over three million people could be helped by the
Work Programme, at a cost of between £3 billion and
£5 billion over five years.
2. The Work Programme's performance to date,
details of which the Department published on 27 November 2012,
was well below the Department's expectations.
The Department expected that between June 2011 and July 2012,
the Work Programme would secure successful outcomesmoving
off benefit and into sustained employmentfor
104,000 people, 11.9% of those referred to providers. In practice,
31,000 people moved off benefit and into sustained employment,
only 3.6% of claimants on the Programme.
The Department acknowledged that this performance was disappointing
and that, for the harder to help groups, none of the providers
managed a level of performance that was near where it would have
3. Further analysis of the data released by the
Department shows that none of the 18 contractors met the
targets they had agreed with the Department and which are contractual
obligations. Overall, performance was below the Department's own
assessment of noninterventionwhat would have happened
had the Work Programme not operated. For the largest group of
claimants, Jobseekers' Allowance participants aged 25 and
overactual performance to July 2012 was 3.4%. Had the Work
Programme not been running, the Department predicted that 9.2%
in this group would have moved off benefits and into work.
4. Whilst none of the providers reached the minimum
performance level they had agreed to in their contracts with the
Department, there was considerable variation in performance between
providers. The best performance was by ESG, which moved 5.0% of
those referred to it into sustained employment; more than double
that of the lowest performing provider, JHP Group, which
5. Providers and some commentators have looked
to differences between actual and anticipated economic conditions
as explaining, at least in part, poor performance. The Department
believes that the economy has in fact held up better than it anticipated.
It therefore does not consider that the variation in performance
is due to different local economic conditions.
The Department told us that it attributed the variation to two
factorsthe differences in approach taken by each provider
and the quality of each provider's management. 
6. The Department told us that it is currently
reviewing providers' performance in order to understand which
approaches are working well and which are not.
It told us that its Provider Assurance Teams are working with
each of the 18 providers across the 40 contracts, and
in each of the nine payment groups, to identify why performance
was below expectations and to see what action providers are taking
to improve performance.
It also believes that providers themselves could do more to learn
from others and that it would help facilitate the dissemination
of lessons learned by pointing to processes that are working.
7. In our May 2012 report on the introduction
of the Work Programme we raised our concerns that prime contractors
will 'park' the hardest to help groups, such as those claiming
Employment Support Allowance.
Comparing performance across the nine claimant groups shows that
successful outcomes for the Employment Support Allowance groups,
which includes claimants with disabilities, was further below
the Department's expectations than the performance for those
on Jobseeker's Allowance (representing easier to help groups).
The best performing Employment Support Allowance groupincapacity
benefit and incapacity support volunteersachieved 20% of
the outcome the Department expected. In comparison, the worst
performing Jobseeker's Allowance categoryfor 18 to
24 year oldsachieved 24%.
8. In December 2012, the Department published
its preliminary findings from its first phase of qualitative research
as part of its evaluation of the Work Programme. The report concluded
that 'the available evidence to date suggests that providers are
engaging in creaming and parking, despite the differential payment
regime' and that 'those assessed as hardest to help are in many
cases left with infrequent routine contact with advisers, and
often with little or no likelihood of referral to specialist (and
possibly costly) support, which might help address their specific
barriers to work.' The Department's report also noted that
'some providers at least, took the view (perhaps surprisingly,
given the design and remit of the Work Programme) that it was
inappropriate for the hardest to help to be referred to their
services at all'.
The Department told us that it had designed its contracts with
providers so that they cannot remain profitable unless they tackle
substantial numbers of claimants beyond those that could be categorised
as easy to help.
It conceded that the Work Programme would have 'a problem' if
the providers are unable to deliver outcomes for the prices set
out in the contracts. 
9. In light of the performance achieved to July
2012, the Department has placed all 18 providers across the 40
individual contracts on performance improvement plans. In addition,
the Department told us that it has sent formal letters to the
providers responsible for seven of the contracts where it believes
performance is not acceptable, requesting details of the actions
they will take to improve performance.
The poor performance across all contracts may mean that the some
of the providers will not be able to manage under the payment
by results regime, and they may go out of business.
10. The Department told us that it has two contractual
means to help it to manage poorly performing providers. By the
end of March 2013 and subsequently annually, it expects to
have a good indication of whether providers are achieving the
minimum performance levels set out in each of the 40 contracts.
A provider that performs below that threshold is in danger of
losing the contract, although the first time that the Department
can remove a contract for this reason is after June 2013.
From June 2013, and thereafter annually, the Department's contracts
with providers allows it to switch referrals from the poorer performing
provider to the better performing provider in each of the 18 regions
into which the Work Programme is divided. Ultimately, the Department
can take the contract away from the provider if it continues to
under-perform. It has a contracted employment framework from which
it could replace a failed provider.
2 C&AG's Report, Paras 6 and 7 Back
C&AG's Report, Para 1 Back
For three or six months depending on the benefit claimed. Back
Qq 6, 10, 14; C&AG's Report, Para 9 and Figure
Qq 41, 51 Back
Q 51; C&AG's Report, Para 11 and Figure 2 Back
Q 40; C&AG's Report, Para 15 and Figure 4 Back
C&AG's report, Para 19, fifth bullet Back
Q 40; C&AG's report, Para 15 Back
Q 40 Back
Qq 40, 47 Back
Qq 39, 43, 47 Back
Qq 47, 73 Back
Committee of Public Accounts: Department for Work and Pensions:
the introduction of the Work Programme, HC 1814, 85th
Report of Session 201012, 15 May 2012 Back
Q 40; C&AG's Report, Para 14 and Figure 3 Back
Q34, Department for Work and Pensions: Work Programme evaluation:
Findings from the first phase of qualitative research on programme
delivery (Research Report 821, December 2012) Back
Qq 34, 35 Back
Q 58 Back
Q 44; C&AG's report, Para 20 Back
Q 43 Back
Qq 43, 65; C&AG's Report, Para 9, first bullet Back
Q 43; C&AG's report, Para 2, Appendix One Back