A Department for Work and Pensions programme to reduce the number of people claiming incapacity benefits and help them into work has had a limited impact and, while a serious attempt to tackle an intractable issue, has turned out to provide poor value for money, according to a report published today by the National Audit Office.
The report gives credit to the Department for trying to tackle the problem but, whilst the number of people claiming incapacity benefits has fallen slightly in recent years, the volume of claimants has remained in excess of 2.5 million for over a decade. The precise contribution of the Pathways to Work programme to a reduction of 125,000 in the number of people claiming incapacity benefits is not clear, but is likely to be limited. The reduction is likely to be due to the earlier medical assessment to determine benefit entitlement. Other elements of Pathways employment support – at an estimated cost of £94 million in 2008-09 – appear to have had no impact on claimants, with new claimants just as likely to move into employment without Pathways support as they are with it.
Pathways is led by Jobcentre Plus in some areas but is contracted out to third sector and private organisations in over 60 per cent of the country. The National Audit Office found that there is no evidence that the programme is performing better or costing significantly less in contracted out areas than in those run by Jobcentre Plus.
Contractors have universally underperformed against targets set by the Department, the NAO points out, and the Department has had to make concessions as part of contractual renegotiations to support the continuation of businesses and services. The NAO also found that the Department lacked adequate information on the Pathways supply chain. With a third of contracts making a financial loss, the programme’s contracted out delivery does not appear to be sustainable. Looking forward, however, the Employment and Support Allowance looks likely to be a key instrument in reducing the number of incapacity benefit claimants.