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The Work Programme

After a poor start, the performance of the Work Programme is at similar levels to previous programmes, according to a report today by the National Audit Office. Current published data may understate actual job outcomes and the DWP is also forecasting further improvements. At the same time, the Department has reduced costs and the risks of paying for poor performance. If the Department can achieve the much higher rates of performance that it now expects for the remainder of the Programme, the Programme has the potential to offer value for money.

Performance in getting people seen as easier to help into work has improved since the first published data. Of those people claiming Jobseeker’s Allowance aged 25 and over, 27 per cent of people who have completed the programme have moved into employment lasting 6 months or longer. This is similar to previous comparable programmes but is less than the Department’s original forecast (39 per cent), minimum performance levels (33 per cent), and bidders’ original expectations (42 per cent). Recent performance shows signs of improvement and the Department expects this trend to continue.

The Programme has, however, not improved performance for harder-to-help groups compared to previous schemes. The Department designed the Programme to help participants whose barriers to employment mean that it is more difficult for them to move into employment. However performance has been similar to previous initiatives and falls well short of the Department’s and bidders’ expectations. Prime contractors have reduced what they plan to spend on the hardest-to-help, with support for these participants lower than for those with better employment prospects.

The Work Programme is also not working as the Department intended in the way it rewards contractors for performance. Flaws in contracts and performance measures have led to unnecessary and avoidable costs. The Department may have paid contractors £11 million in the period to March 2014 for performance they may not have actually achieved and could overpay contractors £25 million over the remainder of the Programme unless it changes its approach. The Department has recognised where it has needed to make changes to contracts. It has been actively negotiating with contractors to make improvements but it is not yet clear how much the Department will need to compensate contractors for changes.

 

"The Work Programme has improved on its poor start with performance to date reaching that of previous schemes. There are signs that performance is still improving. The Department must now deliver the significant increases in performance it expects, in particular improving outcomes for harder-to-help groups."

Amyas Morse, head of the National Audit Office, 2 July 2014

Notes for Editors

£2.8bn

Department's forecast - total payments to prime contractors, June 2011 to March 2020

2.1m

Department's forecast - referrals to the Work Programme, June 2011 to March 2016

£450m

Department's forecast - total savings to benefit spending from the Work Programme compared to the baseline agreed with HM Treasury

296,000

People secured job outcomes up to March 2014

£41 million

Saving on the amount the Department would have spent between June 2011 and March 2020 for similar levels of performance on previous welfare to work programmes

212

Minimum service standards that prime contractors proposed in their bids

£11 million

Estimated cost of sustainment payments up to March 2014 where the Department cannot confirm employment

£21 million

Saved by the Department by extrapolating invalid job outcome payments and reducing payments to prime contractors accordingly

£31 million

Likely total cost in 2014-15 of incentive payments to prime contractors to reward high performance

1. The Work Programme offers support to unemployed people who have been claiming Jobseeker’s Allowance or Employment and Support Allowance to help them get and to keep jobs. The Department expects to refer 2.1 million people to the Programme between June 2011 and March 2016, at a total cost of £2.8 billion. The Programme is delivered through 18 contractors with 40 separate contracts.

2. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained by using the relevant links on our website.

3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 820 employees. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.1 billion in 2013.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 35/14