Work Programme performance – September 2014

Ramzi Suleiman was at NCVO between January 2013 and December 2014, leading on NCVO’s Work Programme initiatives and running the work shadowing ‘Day in the Life…’ scheme. Ramzi has left NCVO, but his posts are kept here for reference purposes.

The latest statistics on the Work Programme’s performance again highlight the need for changes to the way welfare to work schemes operate if they are to help more unemployed people into work – especially those furthest from the labour market.

NCVO’s recently released paper, ‘Stepping Stones’ (PDF, 340KB) sets out our vision for future schemes that will allow charities, who are often best placed to help those with multiple or complex needs, to fully participate in future iterations of the Work Programme. In the short term, NCVO believe that a pilot should be established for those furthest from the labour market. In the longer term, we have recommended big changes in the way welfare to work schemes are designed, delivered and paid for.

What the statistics show

JSA Claimants are faring quite well

It is pleasing to see that the Work Programme outcomes for Job Seekers Allowance (JSA) groups, in particular those under 25, have improved significantly since the start of the scheme. One in five of 18-24 year old JSA claimants have achieved a job outcome after a year on the Work Programme. For JSA claimants over 25, the figure is one in six. These exceed the minimum expected levels.

The Work Programme is still failing those furthest from the labour market

However, the stats show that the Work Programme is still failing those furthest from the labour market. Setting aside concerns about how service users are categorised, the stats show that:

  • 1 in 10 of Employment Support Allowance (ESA) claimants with a 3 or 6 month prognosis achieve a job outcome within a year of referral.
  • Just 2.9% of other ESA claimants and former Incapacity Benefits (IB) claimants are achieving job outcomes within 12 months.
  • Since the launch of the Work Programme, and including those who have been referred to March 2014, just 6.5% of ESA claimants have achieved a job outcome. This figure goes down to just 4% if you take out those claimants who are expected to be fit for work within a year. This is particularly concerning as the stats also showed that ESA claimants now make up 25% of referrals to the Work Programme.

Service users furthest from the labour market, including many who claim ESA, need more support to get towards and into employment. Charities are often best placed to provide that support, but are being prevented by the structure of the Work Programme.

What can be done?

Short term

A pilot scheme should be established before Work Programme providers stop taking referrals in June 2016. Given the stats above, this is an opportunity for the Department of Work and Pensions to establish a parallel funding stream to provide support for those furthest from the labour market. This pilot would be based on local contracts, and aim to provide specialist help for those furthest from the labour market. Jobcentre Plus staff should be given discretion to refer service users to this more specialised local provision provided by charities, after assessing their needs. This pilot could improve the support currently being given to service users furthest from the labour market, whilst also providing DWP solid evidence to inform future programmes. European Social Fund money could be potentially accessed to cover some of the costs of this pilot.

Future welfare to work schemes

It’s good to talk – pre-procurement dialogue

Commissioners should enter dialogue with voluntary organisations when designing schemes. This would ensure that such schemes are built around a better understanding of the needs of those with multiple or complex problems. It would also give commissioners an insight into the structure and capacity of charities within the welfare to work market.

Good things come in small packages – smaller contracts

More localised contract provision would allow more charities to take part in schemes. Large, aggregated contracts such as the ones used in the Work Programme, favour large, often private companies and leave charities unable to bid for prime contracts. Anecdotal Evidence suggests that this leads to primes ‘creaming and parking’ service users, whereby prime contractors concentrate their efforts and resources on to helping those who are closest to the labour market, at the expense of those who need more support. Where this takes place, charities in a sub-contractor role often do not get the referrals they expected and become exposed to financial risk that they cannot sustain.

One size does not fit all – a different payment model

Many charities lack the access to capital needed to engage in the payment by results (PbR) model used in the Work Programme. They cannot afford to wait months or even years for payment. Payment models should reflect the structure of the market, and the different organisations that make it up. In future schemes other models, including hybrid PbR mechanism, progress payments and grant funding should be adopted.

To each according to their need – needs-based categorisation of service users

Work Programme referrals are categorised based on the benefits they receive. This is often a poor indication of the barriers they face. Service users should have their needs assessed at the earliest opportunity to allow the support being provided to them to be reflective of them. This, alongside the progress payments, would better incentivise providers to give appropriate support for these service users.

What do you think?

What do you think of the latest stats? How can charities play a bigger role in future welfare to work schemes? Tell us below.

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