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.