A scheme introduced by the UK government to help long-term unemployed people into work is performing well below expectations, the Public Accounts Committee said in a report published today.
In its assessment of the first 14 months of the Work Programme, the committee said that only 3.6% of the people referred to the scheme had managed to move off benefits and into a secure job.
This is less than a third of the 11.9% target set by the Department for Work and Pensions (DWP). Moreover, it is below the official estimate of how many of those claimants would have found work if the programme had never been launched.
Shadow work and pensions secretary Liam Byrne said the report showed that the Work Programme had failed to bring down long-term unemployment and “was worse than doing nothing.”
A spokesman for the DWP defended the scheme, claiming that it had helped more than 200,000 people to find a job and was “making a real difference to tens of thousands of the hardest-to-help jobseekers.”
Katja Hall, chief policy director at business organisation the CBI, acknowledged that the initial Work Programme results were “disappointing” but said that the programme is still in its early stages and better results will be seen over the longer term.
The MPs on the committee have urged the DWP to look again at the payments offered to providers for getting people into work. They said that although there are incentives in place which are supposed to prevent providers from concentrating on the easiest cases, these incentives are not working.
In particular, the committee expressed concerns that young people and those who are hardest to place in work are not receiving enough help.
The report noted that none of the 18 providers had met their contractual targets and said there is growing evidence of providers focusing on the claimants who are easiest to place in a job and ignoring those whose circumstances require more time and investment, a practice known as “creaming and parking”.
“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,” said Labour MP Margaret Hodge, who chairs the Public Accounts Committee.
The Work Programme was established in June 2011 to help long-term unemployed people move off benefits and into sustained employment. It is expected to cost between GBP3bn and GBP5bn over five years.