Work scheme ”worse than doing nothing”

The Department for Work and Pensions’ Work Programme – meant to find long-term employment for some of the most vulnerable people – managed to move an average of 3.6 per cent of benefit claimants into work between June 2011 and July 2012, well below the target of 11.9 per cent. The programme is thought to cost between £3bn and £5bn over a five-year period.

The Public Accounts Committee has said the performance of the scheme so far has been “extremely poor”. Indeed, it has been so poor that the figures are worse than the department’s own expectations of the number of people who would have found work if the programme didn’t even exist.

The best performing provider in the scheme moved 5 per cent of people off benefit and into work, while the worst managed to help 2 per cent. Blame has been cast on providers for “creaming and parking” the easiest to place people in an attempt to make the figures look good. But even this has failed.

Committee chair Margaret Hodge said: “It is shocking that of the 9,500 former incapacity benefit claimants referred to providers, only 20 people have been placed in a job that has lasted three months, while the poorest performing provider did not manage to place a single person in the under-25 category into a job lasting six months.”

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She added: “Under the payment by results system, the department has incentives in place which in theory are supposed to prevent providers concentrating on the easiest cases and ignoring those who are hardest to help. But these incentives are not working and there is increasing evidence of ‘creaming and parking’. A provider that continues to underperform could become financially unsustainable. The department must identify cases where a provider is at risk of failing and ensure there are specific plans in place to deal with this.”

For Labour, the shadow work and pensions secretary Liam Byrne said the committee’s findings showed the “farcical” Work Programme’s “comprehensive failure” to bring down long-term unemployment, to the point that it worse than doing nothing.

“At a time when our economy is flat lining and David Cameron is giving a tax cut to millionaires, we desperately need a back-to-work programme that is fit for purpose,” he said. “That’s why Labour is calling for a compulsory jobs guarantee which will get every adult who has been unemployed for more than two years straight into a job.”