The Restart Scheme for long-term unemployed people – Report Summary

Summary

The Department for Work & Pensions (the Department) set up Restart to help move long-term unemployed Universal Credit claimants into work via the use of employment support ‘providers’ who have a more structured and intense approach to helping people into work than the Department. It was expected that the scheme would benefit society by £2.44 for every £1 spent on it. However, Restart has ended up costing significantly more per person than previous similar schemes.

At its inception, the Department reasonably expected a surge in people becoming long term unemployed in the wake of the COVID-19 pandemic but in reality, there was far less demand for the scheme than predicted. This was partly because the economy was stronger than expected, and also because the Department did not know enough about its claimants to predict how many would actually go onto the scheme. This led the Department to renegotiate the contracts with its providers and agree new terms to deal with the lower demand.

We are pleased that the Department took on board some of this committee’s previous recommendations around commercial capability and used ‘should cost modelling’ and ‘open book accounting’, which helped the Department to prepare well for the renegotiations. But its lack of initial planning for such low volumes and limited commercial leverage meant it could not make significant savings per participant. The Department needs to determine how it can deliver the best value for money from the market when it has to rapidly increase and decrease capacity in response to economic shocks.

Ultimately the success of Restart depends on how many additional people get into work because of the scheme. The Department expects Restart to achieve its estimated return on investment if only six in a hundred participants find work they would not otherwise have found. But a small change in this proportion would change the return significantly. This makes evaluation and transparency about Restart crucial. While the early evidence shows Restart participants moving into work at a greater rate than the Department had expected, the Department does not yet know whether this is because of Restart or changes in the economy. We welcome the Department’s plans to evaluate Restart after the scheme has finished and assess how well it has helped participants move into work and delivered its expected benefits to the taxpayer. We urge the Department to make this evaluation available for peer and academic review, and to publish regular statistics about how Restart is performing while it is live.