List of conclusions and recommendations
In this List, conclusions are set out in plain type
and recommendations, to which the Government is required to respond,
are set out in italic type.
Minimum Performance Levels
1. We
are concerned about the appropriateness of the Work Programme
Minimum Performance Levels (MPLs) and how they were calculated
by DWP. They do not appear to be sufficiently responsive to the
actual economic conditions in which providers are operating. The
lack of realistic MPLs results in realistic assessments of performance
being difficult and makes sanctioning primes, and therefore delivering
and incentivising improved performance, harder to achieve. For
the next round of Work Programme contracts, we recommend that
DWP devise, in collaboration with independent experts, a new method
of calculating and setting MPLs which are more responsive to the
state of the economy; can be more transparently calculated and
applied; and can be reviewed periodically during delivery.
(Paragraph 28)
Work Programme statistics
2. Our
scrutiny of the Work Programme in the early months of service
delivery has been hampered by a lack of transparent official data.
Official job outcome data were not made available until some 17
months after service delivery began. After many months of being
unable to provide figures, because DWP claimed they would be unverified
and therefore unreliable, the publication of the first official
figures was accompanied by the publication of unofficial figures
by the Employment Related Services Association (ERSA). Although
unofficial, these were frequently referred to by Ministers as
an alternative to the official figures. Such an approach to statistics
is unhelpful. (Paragraph 30)
3. We were concerned
that DWP had planned to release official Work Programme referral
and job outcome data on a six-monthly basis, which we believed
would have been inadequate for a programme of this size and importance.
We therefore welcome DWP's recent decision to move from six-monthly
to quarterly reporting of Work Programme referral and performance
data. (Paragraph 31)
4. The UK Statistics
Authority has recently made a number of recommendations about
improvements it would like to see DWP make to the statistics it
publishes on the Work Programme and pre-Work Programme employment
provision. We support the Authority's recommendations. We accept
that it may not be possible for DWP to take all of the recommendations
into account in publishing the next tranche of official Work Programme
statistics in June 2013. However, we expect the clarity, interpretation
and usefulness of subsequent releases to improve in response to
the Authority's report and our own recommendations.
(Paragraph 33)
Options open to DWP in the event of continuing
poor performance
5. We
believe that shifting market share from the lowest performing
to the highest performing prime in the same Contract Package Area
could boost provider performance and should be implemented during
2013. However, the "market share shift" mechanism will
need to be actively, carefully and transparently managed and applied
by DWP. We recommend that, in response to this Report, DWP provide
further information about the scenario modelling it has undertaken
to assess the likely impacts on provider performance and service
quality of shifting market share between primes. We also remain
unconvinced that the early termination of a prime contract could
be achieved without significant disruption to services and request
further details about the research DWP has conducted to assess
the feasibility of contract termination and its impacts on service
delivery. (Paragraph
39)
6. We are concerned
that relatively highly-performing subcontractors may suffer as
an unintended consequence of market share shift between primes
or in the event of prime contract termination. We recommend that,
in its response to this Report, DWP make clear how it will protect
highly-performing subcontractors attached to poorly-performing
primes in the event that the latter lose market share or have
their contract terminated. (Paragraph
40)
Attachment fees
7. Funding
within the Work Programme has been considerably diminished by
lower than anticipated levels of job outcome payments to providers
in the first 14 months of delivery. Attachment fees are due to
end in April 2014. We recommend that DWP review the balance between
attachment fees and outcome fees, and consider retaining attachment
fees, to protect delivery of services, including by subcontractors.
(Paragraph 43)
Provision for unsuccessful participants
8. The
first cohort of Work Programme participants will reach the end
of their attachment period from June 2013. DWP must set out as
a matter of urgency the support that will be in place for participants
who are unsuccessful in finding sustained work during their two
years on the Programme. We recommend that all unsuccessful participants
should have an end of Work Programme assessment. Specialist support
must be put in place for those who have made little progress.
Those who have made significant progress towards sustained employment
should be permitted to voluntarily extend their attachment to
the Work Programme. The period in which providers are able to
claim job outcome fees in relation to these participants should
likewise be extended. We also recommend that DWP consider the
practicalities of assigning participants who have completed the
programme without success, but are close to work, to one of the
other primes covering their area.
(Paragraph 46)
The role of JCP in the Work Programme
9. Improving
local relationships between JCP and Work Programme staff is rightly
considered a priority by DWP. We observed an improving relationship
in Brent but the evidence from the official evaluation suggests
a varied picture across JCP Districts and clearly more progress
needs to be made. Local JCP managers must take responsibility
for ensuring that the message gets through to frontline staff
that good working relationships with their Work Programme counterparts
are essential. (Paragraph 59)
Conditionality and sanctioning of Work Programme
participants
10. We
are in favour of conditionality where it supports the policy intention
of encouraging participants' effective engagement with the Work
Programme. However, we are deeply concerned by evidence of the
inappropriate use, or threat, of benefit sanctions against Work
Programme participants and the initial findings of the official
evaluation, which suggest that the processes for the application
of conditionality and sanctions do not yet work effectively. We
recommend that DWP conduct a review of Work Programme conditionality
and sanctioning activity as a matter of urgency, with a view to
ensuring that the processes are clearly understood by participants
and consistently applied by both Work Programme and JCP staff,
and that it publishes its findings by the end of 2013.
(Paragraph 60)
Employer engagement
11. We
believe that providers should do more to prepare jobseekers for
real vacancies and should desist from simply deluging employers
with a random selection of CVs and poorly prepared candidates.
Excellent examples exist of employers engaging effectively with
Work Programme providers, in particular Transport for London's
systematic engagement with all six primes operating in the capital.
We recommend that DWP and the Employment Related Services Association
(ERSA) encourage approaches such as these.
(Paragraph 73)
12. General awareness
of the Work Programme amongst employers appears to be low. We
recommend that DWP work with the welfare-to-work industry to promote
the Work Programme to employers as a potentially effective recruitment
partner and that DWP and ERSA produce a national action plan for
engaging employers in the Work Programme before the end of 2013.
(Paragraph 74)
13. At a regional
level evidence suggests that collaborative approaches, where providers
work together to create employer engagement strategies, are most
effective. At a local level, providers should make effective use
of the experience and contacts of local stakeholders, for example
by meeting regularly with local authorities and local business
groups such as Chambers of Commerce, to identify employers' recruitment
needs and prepare Work Programme participants for identified future
vacancies. (Paragraph 75)
Accuracy of the Work Capability Assessment
14. Providers
reported some improvement in the accuracy of the Work Capability
Assessment (WCA) but we also heard some quite shocking examples
of participants referred to the Work Programme who had clearly
been incorrectly declared fit for work following a WCA. We recommend
that DWP work with providers to agree a process by which participants
whom providers believe are clearly unfit for work can be referred
back to Jobcentre Plus. We agree with the Minister that the process
will require checks and balances to ensure that providers cannot
simply refer back any participant whom they "do not want
to work with".
(Paragraph 84)
The Work Focused Health-Related Assessment
15. We
repeat the conclusion reached in our July 2011 Report on the Incapacity
Benefits reassessment; a separate component of the Work Capability
Assessment, which could focus on health-related or workplace interventions,
and which might support claimants with health conditions and disabilities
into work, would be particularly useful for people moving off
Incapacity Benefits. We believe that, if this had been in place
when the Work Programme was implemented, it could have provided
a better assessment of benefit claimants' readiness for work and
might have prevented inappropriate referrals. Based on the limited
information which DWP has made available, its original decision
to suspend the Work Focused Health-Related Assessment, and its
recent decision to continue its suspension until at least April
2016, seem regrettable. We recommend that DWP provide a fuller
explanation of its reasoning for its latest decision than was
provided in its Written Ministerial Statement of 25 April 2013,
and that it publishes the external evaluation.
(Paragraph 87)
Alternative models for jobseeker segmentation
and differential pricing
16. There
is growing evidence that the Work Programme is failing to reach
jobseekers with the most severe barriers to employment. We recommend
that DWP review Jobcentre Plus processes for identifying jobseekers
with severe barriers to employment, such as homelessness and serious
drug and alcohol problems, as a matter of urgency. It should also
review its processes for communicating these barriers to Work
Programme providers. Where appropriate, we recommend that these
types of jobseekers are more consistently allocated to the JSA
Early Access group, where they will attract a higher level of
funding than those in the mainstream JSA groups.
(Paragraph 104)
17. There was consensus
amongst witnesses that benefit type is a poor proxy for the level
of jobseekers' needs and the relative cost of supporting them
into work. In the longer-term, in preparation for the next round
of Work Programme contracts, we recommend that DWP consider whether
a more thorough assessment of jobseekers' individual barriers
to work, possibly along the lines of the Australian Jobseeker
Classification Instrument, should be the basis of a future needs-based
differential pricing structure. (Paragraph
105)
18. We recommend
that DWP assess how a needs-based differential pricing structure
might determine the level of up-front funding and the types of
services required by jobseekers referred to the Work Programme
and whether alternative funding models, which reward providers
for achieving milestones along the way to employment, should apply
to jobseekers who are furthest from the labour market.
(Paragraph 106)
Funding the Work Programme
19. The
Government's intention was to fund the Work Programme, in part,
from future benefit savings accrued from placing long-term jobseekers
into sustained employment. We were supportive of this in principle
and therefore do not believe it is appropriate, during a period
of high unemployment, for the Government to retain the savings
accrued as a result of the Work Programme's early under-performance.
We recommend that the ring-fence around the Work Programme budget
is extended to encompass alternative provision to address long-term
unemployment. Part of the unexpected shortfall in Work Programme
spending should be utilised to extend the Work Choice programme,
to further increase resources for Access to Work, and to extend
the attachment period for participants who make real progress
but complete two years on the Programme without achieving a sustained
job outcome. (Paragraph
110)
20. Jobseekers
with the most severe barriers to employment are often not ready
to engage effectively with the Work Programme. DWP should use
part of the shortfall in Work Programme spending to pilot additional
pre-Work Programme provision to prepare jobseekers, such as homeless
people and those with serious drug and alcohol problems, for effective
engagement with the Work Programme. In commissioning this provision,
DWP should draw on the expertise of specialist providers, many
of which have not been involved in Work Programme delivery to
the extent anticipated (see paragraph 162). We recommend that
additional support is in place by early 2014. (Paragraph
111)
The "black box" approach
21. We
support a "black box" approach to service delivery;
however, DWP must be clearer that this means that providers have
the freedom to innovate and personalise services, free from government
prescription. Despite minimal evidence of substantive personalisation
thus far, we believe that a prescription-free approach is preferable
to a centrally-prescribed, process-driven system, which might
stifle the potential for innovation and be an inefficient use
of DWP's resources. (Paragraph 119)
Minimum Service Standards
22. We
believe that the "black box" needs to be balanced by
clear and measurable minimum standards so that participants know
what to expect and the minimum level of service they are entitled
to receive. Currently prime providers' Minimum Service Standards
vary greatly in detail and measurability. Some Minimum Service
Standards are so vague as to permit providers to virtually ignore
some participants if they so choose. We understand the difficulties
of establishing a single set of standards which could be applied
by all providers but we believe it is achievable. For example,
it would be perfectly possible for all providers to be required
to have a face-to-face meeting to assess all participants' needs;
to produce an employment action plan within a certain timeframe;
and to have a face-to-face follow-up meeting, also within a specific
timeframe. We recommend that DWP develop a core set of basic minimum
standards applicable to all providers, and to which all Work Programme
participants are entitled.
(Paragraph 124)
Assuring service quality
23. Much
of the evidence we received suggested that Work Programme advisers
are highly-skilled and dedicated to supporting long-term jobseekers
into sustained employment. However, with average caseloads of
between 120 and 180, Work Programme advisers are being forced
to prioritise whom they support. We recommend that DWP and the
welfare-to-work industry devise ways of bringing Work Programme
caseloads down. (Paragraph
131)
24. We understand
the policy intention of randomly allocating Work Programme participants
to one of the two or three prime contractors operating in each
Contract Package Area (CPA); it ensures that each prime operating
in the same area receives an equal number and similar mix of participants
and therefore allows their performance to be more easily compared.
However, we recommend that DWP explore options for introducing
an element of choice of prime contractor for participants, particularly
where it can be clearly demonstrated that specialist services
which would benefit an individual participant are not offered
by the prime to which they have been randomly referred but are
available via one of the other primes operating in the same CPA.
(Paragraph 132)
25. There appears
to be insufficient focus on, or responsibility for, Work Programme
participants' satisfaction with the support they receive. We recommend
that DWP require all prime providers to introduce standardised
participant satisfaction surveys at appropriate intervals during
each participant cohort's two-year attachment to the programme,
including immediately after their initial attachment and at the
end of the two-year attachment period. These surveys should form
part of DWP's assessment of prime providers' effectiveness. It
is important that the surveys ascertain how well participants
understand: the purpose of the Work Programme and differentiate
it from Jobcentre Plus services; why they were referred; and the
level of service to which they are entitled. DWP should also be
alert to the possibility that some participants will register
their satisfaction with the programme merely because very little
is expected of them and they are required to attend appointments
with their adviser infrequently. Surveys must be designed to draw
out these kinds of nuanced responses.
(Paragraph 137)
26. We welcome
steps taken by the welfare-to-work industry to professionalise
its frontline workforce through accreditation and continuing professional
development. We recommend that DWP and ERSA continue to move towards
greater professionalism in the welfare-to-work sector, by encouraging
appropriate training and accreditation for all frontline advisers,
for example through the Institute of Employability Professionals
and other specialist organisations. (Paragraph
138)
Availability of speciality support
27. We
believe that reporting of official Work Programme data at prime
level only is inadequate and does not allow us to make an assessment
of the effectiveness of the whole market. In the absence of transparent
official data on Work Programme referrals below prime contractor
level, we cannot assess with any certainty the level of specialist
subcontractors' involvement in Work Programme delivery. (Paragraph
160)
28. We recommend
that official Work Programme data show both job outcomes and referrals
at subcontractor as well as prime contractor level. It is fundamentally
important to know which organisations are most effective at supporting
the long-term unemployed back into work; it would facilitate effective
scrutiny, and help the welfare-to-work industry to establish optimal
supply chains, if this information were transparently available.
(Paragraph 161)
29. Much of the
evidence to this inquiry suggests that specialist providers are
not involved in the Work Programme to anywhere near the extent
anticipated. There is also evidence that some voluntary sector
providers are funding specialist Work Programme provision from
their own resources, including from charitable donations. This
needs to be taken into account when calculating the overall cost
of the Work Programme, including in comparison to previous welfare-to-work
schemes. It may also indicate that the specialist support some
jobseekers need is not available within all supply chains to the
degree envisaged. DWP must ensure that it draws more extensively
on the expertise of specialist providers so that the Work Programme
meets the needs of participants with complex barriers to work
effectively. It should also use part of the unspent Work Programme
budget to commission the specialist pre-Work Programme provision
for particularly disadvantaged jobseekers that we recommend earlier
in this Report. (Paragraph 162)
Regulating supply chain relationships: the Merlin
Standard
30. The
Merlin standard's current remit does not allow it to address subcontractors'
grievances in relation to lack of referrals and the alleged imposition
of unfair financial terms. We repeat our 2011 recommendation that
Merlin's remit should be extended to address such issues and that
it should be given more "teeth", with the power to impose
financial penalties on primes which treat subcontractors unfairly.
The Merlin standard's scope should also be extended to include
the assessment of other stakeholders' satisfaction with the behaviour
of prime contractors. We recommend that the Merlin process include
an assessment of the levels of satisfaction of Work Programme
participants, local authorities and local employers with the service
provided by Work Programme primes.
(Paragraph 167)
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