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

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]

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.[3] The Department expected that between June 2011 and July 2012, the Work Programme would secure successful outcomes—moving off benefit and into sustained employment[4]—for 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.[5] 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 liked.[6]

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 non­intervention—what would have happened had the Work Programme not operated. For the largest group of claimants, Jobseekers' Allowance participants aged 25 and over—actual 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.[7]

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 achieved 2.2%.[8]

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.[9] It therefore does not consider that the variation in performance is due to different local economic conditions.[10] The Department told us that it attributed the variation to two factors—the differences in approach taken by each provider and the quality of each provider's management. [11]

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.[12] 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.[13] 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.[14]

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.[15] 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 group—incapacity benefit and incapacity support volunteers—achieved 20% of the outcome the Department expected. In comparison, the worst performing Jobseeker's Allowance category—for 18 to 24 year olds—achieved 24%.[16]

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'.[17] 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.[18] 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. [19]

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.[20] 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.[21]

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.[22] 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.[23]

2   C&AG's Report, Paras 6 and 7 Back

3   C&AG's Report, Para 1 Back

4   For three or six months depending on the benefit claimed. Back

5   Qq 6, 10, 14; C&AG's Report, Para 9 and Figure 1 Back

6   Qq 41, 51 Back

7   Q 51; C&AG's Report, Para 11 and Figure 2 Back

8   Q 40; C&AG's Report, Para 15 and Figure 4 Back

9   C&AG's report, Para 19, fifth bullet Back

10   Q 40; C&AG's report, Para 15 Back

11   Q 40 Back

12   Qq 40, 47 Back

13   Qq 39, 43, 47 Back

14   Qq 47, 73 Back

15   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

16   Q 40; C&AG's Report, Para 14 and Figure 3 Back

17   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

18   Qq 34, 35 Back

19   Q 58 Back

20   Q 44; C&AG's report, Para 20 Back

21   Q 43 Back

22   Qq 43, 65; C&AG's Report, Para 9, first bullet Back

23   Q 43; C&AG's report, Para 2, Appendix One Back

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Prepared 22 February 2013