The future of Jobcentre Plus Contents

4The Work and Health Programme

57.The new Work and Health Programme is expected to run from late 2017. It will provide support for some people with disabilities and health conditions, some people who have been unemployed for at least two years, and selected other groups that experience particular disadvantages in the labour market. We examined its predecessors, Work Programme and Work Choice, in our previous report on welfare-to-work.159

The capacity of the new programme

58.Our previous report found that Work Choice had a much better success rate than Work Programme in getting people into work: 62% of participants in Work Choice between April and September 2015 had moved into work160 by March 2016,161 compared to 20% on the Work Programme.162 This appeared encouraging, since Work Choice is specifically aimed at disabled people, who have lower employment rates than the general population. We identified concerns, however, that Work Choice was not targeting jobseekers with more substantial health-related barriers to work as effectively as it might, and that its capacity should be increased. We continued to hear during this inquiry arguments that the capacity of Work Choice’s replacement should be at least doubled to allow a greater proportion of disabled jobseekers, including those who are further from the labour market, to access it.163

59.The DWP’s Employment and Health Related Services “Umbrella Agreement”, through which prospective Work and Health Programme providers are required to bid, has a total contract value of £1.77 billion. Not all of this will go to the Work and Health Programme, however. The Umbrella Agreement suggests that it will have a budget of £554 million over its lifetime.164 This is a manifold reduction compared to what it will replace. In comparison, the DWP states that £492 million in total has been spent on Work Choice up to 2015–16 alone,165 and £2.2 billion had been paid to Work Programme providers as of December 2015.166 The Department states that it is not possible to calculate the proportion of Work Programme’s budget spent on disabled people specifically over the programme’s lifetime. External analysis, however, suggests that combined Work Choice and Work Programme spending on disabled people has been approximately £1 billion since 2010.

60.Building on the experience of previous programmes including Work Choice, the Learning and Work Institute suggested that the Work and Health Programme could therefore support between 100,000 - 400,000 participants. This means that the number of disabled people receiving contracted-out employment support would be lower in this parliament than in 2010 to 2015.167 Witnesses told us that this reduction in support meant that many of those who might benefit from specialist support would be unable to access it.168 The Department pointed, however, to the wider support being provided to individuals with disabilities, including through changes in JCP itself.169

61.It is disappointing that DWP’s plans for the Work and Health Programme do not involve expanding on Work Choice’s successes in supporting disabled people into work. We are concerned that the resources allocated to the scheme do not match its ambition. This is especially so given that the Government has committed to making significant in-roads into the disability employment gap, and the Department’s own recognition that it needs to do much more to help disabled claimants. With this in mind, our recommendations for the Work and Health Programme focus on getting the best possible results from the smaller contracted-out service.

Eligibility and referrals

62.The reduced size of the contracted-out programme means that difficult decisions will have to be made on eligibility criteria for those with disabilities. This is especially since, as ERSA pointed out, “a certain proportion of the programme will cater for jobseekers on JSA (or its equivalent under Universal Credit)”.170 Diane Lightfoot, Director of Policy and Communications at United Response, a charity that supports people with learning disabilities and mental health needs, said that flexibility in the current requirement for Work Choice participants to work for at least 16 hours per week could be helpful. This restriction may act as a barrier to initial participation, even if individuals might be capable of building up to substantial part-time or even full-time hours over time.171 The weakness of Work Choice targeting for people with higher levels of need may be exacerbated by this rule.172

63.Eligibility criteria must strike a balance between supporting people into work who are far from the labour market and helping those who are likely to be able to obtain a job more quickly if given appropriate support. Mark Elliott of Leonard Cheshire Disability, Karen Walker-Bone, Director of Arthritis Research UK, and Diane Lightfoot emphasised the importance of helping both groups.173 Matthew Oakley suggested that it would be prudent to focus on those with the greatest chance of obtaining a sustainable job in the near future—those who are already looking for work.174 In contrast, other witnesses were concerned that such a focus would mean that those with the greatest barriers to work would struggle to access specialist support, and to move closer to work.175

64.We received no evidence that the Work and Health Programme should be mandatory for disabled people overall. Some witnesses told us there might be some value in aspects of mandation. Participants in the Twist Partnership’s Work Programme provision stated that mandation to the programme enabled them to regain “a degree of control over our lives [that] might never have happened without it, or at any rate it might have taken longer”.176 ERSA suggested that the Department might consider mandating “first contact” with the programme, but maintained that the “default position” should be voluntary participation. Danielle Hamm of Rethink Mental Illness told us that volition is the “most important” factor in determining whether a disabled participant in an employment programme manages to obtain and stay in work.177 The Learning and Work Institute explained that there is “clear evidence” that voluntary programmes are “likely to be more effective for disabled people than mandatory ones” and, further, that mandation could “significantly undermine” JCP’s attempts to work in partnership with organisations that support disabled people.178 On 31st October 2016 the Department announced that participation in the Work and Health Programme will be voluntary for disabled people on ESA, or those assessed as having limited capability for work on Universal Credit.179

65.Liz Sayce, Chief Executive of Disability Rights UK, and Ben Baumberg-Geiger of the University of Kent emphasised the need for “safe experimentation” within welfare-to-work provision. This would allow individuals to take steps towards work, including undertaking short work trials or voluntary work, without fear of being sanctioned or losing entitlement to benefits if employment does not work out.180 This applied to JCP provision and support in general, as well as the Work and Health Programme. David Finch, Senior Economic Analyst at the Resolution Foundation, further suggested that UC might be helpful in this respect, incentivising disabled people to move into work with shorter hours.181

66.There is a clear consensus that people with disabilities and work-limiting health conditions should not be mandated to take part in the Work and Health Programme. Indeed, mandation could be self-defeating, making poor use of limited space on the programme and undermining relationships with the specialist support organisations alongside which JCP needs to work. We are pleased that the Department has confirmed that participation in the Work and Health Programme will be voluntary for disabled people on ESA and those with limited capability for work on Universal Credit. We recommend the Department clarify whether and how mandation will apply to disabled people and those with health conditions on JSA or the Universal Credit equivalent. The Department should produce guidance for Work Coaches on making referral decisions, mandation and the eligibility criteria for the Programme. This should encompass the use of discretion in potentially complex situations such as where an individual with a health condition has been unemployed for more than two years but may stand to benefit from external provision, or is claiming JSA or the Universal Credit equivalent.

Commissioning and payments

67.Our previous report recommended maintaining a specialist programme for disabled people, delivered exclusively by specialist organisations at both prime and sub-contractor level. The DWP accepted this recommendation in principle.182 We received substantial further evidence of the importance of specialist support in helping disabled people into work. In the previous two chapters we considered this in relation to JCP. As it will replace Work Choice and be largely aimed at disabled people, we unsurprisingly received a large volume of evidence advocating the involvement of specialist organisations in the Work and Health Programme.183

68.We considered how the Department might best discourage providers from choosing not to devote resources to the most difficult jobseekers to help—a phenomenon known as “parking”. Several witnesses told us that the Department should consider introducing “milestone” payments for providers that take into account participant progress towards employment.184 As well as encouraging providers to help those furthest from the labour market, this could encourage participants to take steps towards work, notably in undertaking short hours or voluntary work by way of preparation for a more substantial job. It would also be compatible with the idea of “safe experimentation”. In a similar vein, the Department told us that it was considering an “accelerator model”, through which “providers would receive larger fees as they supported more participants within a group into sustained employment”.185

69.Charities and providers told us that it was important that the new Programme retains a more substantial up-front service fee than the current Work Programme provision, as is the case in Work Choice. This reflects the greater costs of support for the anticipated more complex caseload.186 The Department’s evaluation of Work Choice indicated that the commissioning structure of the programme had led to difficulties for some specialist providers (as opposed to pan-disability providers). Some reported receiving “few, if any” referrals, and some had left the market entirely.187 Similar problems were reported on the Work Programme.188 We heard this continues to be a concern for prospective smaller contractors in any new programme.189 Kennedy Scott suggested that “strong guidance on management fees” would help to protect specialist providers,190 while ERSA said that guaranteeing minimum referral volumes would be the “one single change” that would most contribute to de-risking the Programme for specialists.191

The “black box”

70.The “black box” provision that allows providers to devise their own programmes of support was generally praised by providers, who appreciated the flexibility that it gives them.192 In our previous report we recommended the introduction of a clearer set of minimum service standards, applicable to all providers.193 This was commensurate with receipt of an up-front service fee and would give claimants clarity about what to expect from the programme. This was especially important to enable people to make an informed choice over whether to participate. We heard renewed calls for this change.194

71.A strong theme that emerged in our discussions of what makes a successful employment programme was direct engagement between providers, local employers and participants. Witnesses including Roy O’Shaughnessy, Chief Executive of Shaw Trust, Peter Bacon, of Kennedy Scott, and Mark Elliott of Leonard Cheshire Disability emphasised how important working closely with employers was in their provision. Such engagement tended to improve employment outcomes and build participants’ confidence.195 Equally, a number of submissions emphasised that effective integration with other local services was a crucial part of successful provision for jobseekers with more substantial and complex barriers to work.196 The Department indicated in the procurement documents for the Work and Health Programme that providers must integrate and co-ordinate their services with local provision, and has designated this as one of the most important elements of bid evaluation criteria.197 This concurs with our earlier recommendations.198

72.To maximise the impact of the Work and Health Programme in supporting jobseekers with complex needs, the Department will need to ensure it offers something distinct from general JCP provision. We are pleased that the Department agreed with our recommendation that there should be a strong emphasis on integrated provision. We also recommend that, given the generalist approach prevailing in JCP, there is clear case for contracts to be let to specialist providers. The Department will also need to ensure that payment structures for the Programme incentivise providers to invest in supporting the more substantially disadvantaged jobseekers within the cohort. In particular, small, specialist providers may need enhanced financial security to participate. This could be achieved through implementing “milestone” payments, or through an “accelerator model”.

73.Commissioning for the Work and Health Programme should prioritise providers that demonstrate provision that goes beyond what is routinely available to jobseekers in JCP. We recommend that specialist providers should be prominently represented, and that the Department should set out clearly how it will ensure that such organisations are not made financially vulnerable through their participation: for example, by guaranteeing minimum referral volumes. Payment by Results should be maintained, but with a substantial service fee, reflecting the greater needs of the cohort that Work and Health Programme will serve—particularly those claimants who will be most difficult to place into work.

159 Work and Pensions Committee, Welfare-to-work, Session 2015–16, HC 363

160 Providers on the Work Programme are paid if individuals that they have supported obtain a “sustained job outcome” — being in work for three or six months, depending on their initial proximity to the labour market. They can then receive “sustainment payments” every four weeks for up to two years. Work Choice providers can be paid for either “short job outcomes” or “sustained job outcomes” depending on the length of time an individual remains in work.

163 Q84 (Diane Lightfoot)

165 Written question 42016

166 Dar, A. Work Programme: background and statistics, briefing paper 6340, March 2016

168 Learning and Work Institute (DEG0086), ERSA (DEG0087), Inclusion London (DEG0059), Kennedy Scott (DEG0056), Centrepoint, Crisis, ERSA, Homeless Link, St Mungo’s, Salvation Army (DEG0036), Leonard Cheshire Disability (DEG0039), Rethink Mental Illness (DEG0037), Papworth Trust (DEG0043), Shaw Trust (DEG0058)

169 DWP (DEG0083)

170 ERSA (DEG0087)

171 Q84-Q85 (Diane Lightfoot), United Response (DEG0030)

172 Work and Pensions Committee, Welfare-to-work, Session 2015–16, HC 363, para. 43-44; British Association for Supported Employment (DEG0033)

173 Q88 (Karen Walker-Bone), Q89 (Diane Lightfoot), Q90 (Mark Elliott)

174 Oakley, M. Closing the gap, Social Market Foundation, March 2016, p.17

175 Leonard Cheshire Disability (DEG0039), Rethink Mental Illness (DEG0037), British Association for Supported Employment (DEG0033), Centrepoint, Crisis, Homeless Link, ERSA, Salvation Army and St. Mungo’s (DEG0036), Papworth Trust (DEG0043)

176 Twist Partnership (DEG0054)

177 Q90 (Danielle Hamm)

178 Learning and Work Institute (DEG0086, FJP0071)

181 Q31 (David Finch)

183 British Association for Supported Employment (DEG0033), Pluss (DEG0040), Action for ME (DEG0031), Centrepoint, Crisis, Homeless Link, ERSA, Salvation Army and St. Mungo’s (DEG0036), Leonard Cheshire Disability (DEG0039), Essex County Council (DEG0051), Sight for Surrey (DEG0080), Kennedy Scott (DEG0056), Shaw Trust (DEG0058)

184 Local Government Association (DEG0049), Pluss (DEG0040), British Association for Supported Employment (DEG0033), Leonard Cheshire Disability (DEG0039), Sense (DEG0065), Scope (DEG0069), Remploy (DEG0075), Mencap (DEG0084)

185 Work and Pensions Committee, Welfare-to-work, Session 2015–16, HC 363, para 56

186 Pluss (DEG0040), Learning and Work Institute (DEG0086), Remploy (DEG0075)

188 Work and Pensions Committee, Welfare-to-work, Session 2015–16, HC 363, para 58

189 British Association for Supported Employment (DEG0033), Essex County Council (DEG0051), Pluss (DEG0040), Leonard Cheshire Disability (DEG0039)

190 Kennedy Scott (DEG0056)

191 ERSA (DEG0087)

192 ERSA (DEG0087)

193 Work and Pensions Committee, Welfare-to-work, Session 2015–16, HC 363, para 70

194 Learning and Work Institute (DEG0086), Gardiner, L. and Gaffney, D. Retention deficit, Resolution Foundation, June 2016, p. 51

195 Q96 (Mark Elliott), Q68 (Roy O’Shaughnessy),Q69 (Peter Bacon)

196 Action for ME (DEG0031), The Work Foundation (DEG0094)

197 DWP, Umbrella Agreement, section 9

198 Work and Pensions Committee, Welfare-to-work, Session 2015–16, HC 363, para. 33

7 November 2016