The future of welfare to work

After a bumpy start the Work Programme as a whole has performed relatively well, with job outcome numbers increasing year on year. But the programme has failed to effectively help those with more complex needs †.

The voluntary sector has extensive expertise and proven success in supporting those with the most complex needs. By taking a holistic and person centred approach, charities have the trust of communities that the statutory and private sectors can struggle to reach.

Despite this, the department for work and pensions (DWP) hasn’t fully utilised the skills and expertise of our sector in supporting these individuals. In the first year of the scheme the voluntary sector accounted for 50% of the total number of providers, yet only 20% of total referrals had gone to them.

Conversations we’ve had with charities echo these findings, with many telling us that the number of referrals they received fell significantly short of what they were expecting.

An opportunity for change

At NCVO we think that better use of the voluntary sector, with more specialist and localised provision could help those furthest from the jobs market.

We recently responded to the Work and Pensions Select Committee inquiry into the future of welfare to work programmes. The Committee was particularly interested in examining options for the future that address the deficiencies of the Work Programme, support the hardest to help, and are more personalised and innovative.

Our response to the Select Committee’s inquiry outlined a number of recommendations that would better harness the sector’s expertise in delivering future welfare to work schemes.

Involving the voluntary sector in future welfare to work schemes

Commissioning practice

Charities don’t just have expertise in delivering specialised services, they also have skills in shaping them due to understanding the communities they work in and giving them an effective voice. In future welfare to work programmes, commissioners need to meaningfully engage with communities to better understand their needs.

The process of getting involved in the delivery of the Work Programme was often too bureaucratic and limited the sector’s involvement. Smaller organisations in particular struggled to get to grips with short timescales and lengthy contracts. We’d like to see DWP create a standardised contract template as well as reconsider the size of contract packages, allowing more charities to engage and leading to a more diverse range of providers.

Payment models

Many charities do not have the financial capability to take on the risks associated with payment by results (PbR) models. In some cases, especially for niche services delivered by small organisations, grants or service fees are more appropriate. In other cases, a hybrid model where service providers are paid more up front would remove some of the risk for voluntary organisations.

Furthermore, the current Work Programme PbR model only rewards job outcomes. It doesn’t recognise the vital steps that individuals, especially those with the most complex needs, make on their journey to employment, such as gaining qualifications. Milestone payments would better incentivise support for these groups, and could help prevent ‘creaming’ and ‘parking’ of the hardest to help.


The Work Programme hasn’t utilised genuine volunteering as a step towards employment. Jobcentre Plus has often given contradictory advice to both service users and charities about volunteering. Whilst DWP has produced clear guidance on this issue, knowledge of these guidelines is variable. We would like to see individuals supported to take part in genuine volunteering (not mandated work placements) without putting their benefits in jeopardy.


The supply chains in the Work Programme have been opaque, with almost no data on the number of referrals made to sub-contractors and the funding that has been passed down to each supplier. The absence of better data has limited the government’s ability to hold primes to account for poor practice.

It has also deprived DWP of a more detailed understanding of the supplier markets and how well they worked. We would like DWP to put a standardised transparency clause in all contracts for future welfare to work programmes, requiring prime contracts to provide information about their supply chains. You can read more about our push for a transparency clause in Ruth’s blog post.

Did we miss anything out?

If you have thoughts about the Work Programme and future welfare to works schemes that we haven’t covered here, let us know by leaving a comment below or sending us an email.

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† Job outcomes for service users receiving ESA are markedly lower, with an NAO report concluding ‘there are signs that some people receive very little help’.


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Karina Russell was NCVO’s policy officer. She covered issues around public services, improving commissioning and procurement practice and advancing the social value agenda.

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