The Department for Work and Pensions should use some of the money it has saved on outcome payments in the first year of the Work Programme, to fund new services from specialist providers to help the most disadvantaged jobseekers engage with the Programme, an influential committee of MPs has said.
The Commons Work and Pensions Committee has today published its report into the Work Programme following its recent inquiry, and made a number of recommendations that the government is now required to respond to.
Because DWP spent much less on outcome payments than it expected to in the first 14 months of delivery, it should use this unexpected budget shortfall to extend other services for highly disadvantaged jobseekers.
“DWP should use part of the shortfall…to pilot additional pre-Work Programme provision to prepare jobseekers , such as homeless people and those with serious drug and alcohol problems, for effective engagement with the Work Programme," the Committee wrote.
“In commissioning this provision, DWP should draw on the expertise of specialist providers…we recommend that additional support is in place by early 2014.”
Full cost of provision
The Committee also recommended that DWP should take into account the money spent by voluntary sector subcontractors subsidising their Work Programme provision when working out the true cost of the Programme.
The Committee said: “Much of the evidence to this inquiry suggests that specialist providers are not involved in the Work Programme to anywhere near the extent anticipated.
“There is also evidence that some voluntary sector providers are funding specialist Work Programme provision from their own resources, including from charitable donations. This needs to be taken into account when calculating the overall cost of the Work Programme including in comparison to previous welfare-to-work schemes.”
Outcomes data at subcontractor level
Official Work Programme data should show both job outcomes and referrals at subcontractor level as well as prime contractor level, the Committee recommended, in order to facilitate scrutiny and help the welfare-to-work industry to set up effective supply chains.
It also reiterated a prior recommended that the Merlin standard be given more ‘teeth’, including the power to impose financial penalties on prime contractors that treat their subcontractors unfairly.
Needs-based pricing model
And on the funding framework itself, the Committee advised: “In future contracts, DWP should consider moving away from differential pricing based on benefit type being claimed; it should assess the merits of implementing a needs-based pricing model instead.
“It should also give consideration to funding models which reward providers for achieving steps along the way to employment by jobseekers with severe barriers to work and which recognise the need for greater up-front funding for some user groups.”
Shifting market share from the lowest-performing primes to the highest-performing in the same area could boost provider performance and should be implemented this year, the MPs added, but safeguards must be built in to ensure that high-performing subcontractors attached to poorly-performing primes are not disadvantaged.
Sector responds positively
Sector bodies affected by the Work Programme welcomed today’s report. St Mungo’s, which together with Homeless Link and Crisis jointly published a report called The Programme’s Not Working in November last year, said many of the issues raised in their report were addressed in the Committee’s inquiry report.
Charles Fraser, St Mungo’s chief executive, said: “This report reflects our deep seated concerns that the Work Programme is failing many of the people it was set up to help.
“We look forward to seeing the select committee’s recommendations accepted and put into practice.”
NCVO’s deputy CEO Ben Kernighan said the report contained “sensible and achievable recommendations” to improve the Programme.
