Latest Public Sector News

26.07.16

Underfunded Work Programme has failed to reach those most in need

A flagship programme to help the long-term unemployed has failed and significant reforms will be needed for its successor, the Work and Health Programme, according to a new report from think tank IPPR North.

The Work Programme has an average success rate of just 28% for getting participants into work, and this falls sharply when it comes to the groups who face the biggest barriers to employment, such as long-term benefits claimants and disabled people.

Employment Support Allowance (ESA) claimants, who have been out of work for many years or have severe physical or mental health problems, have a success rate of as low as 13%, falling to just 5% for ESA claimants who have previously claimed incapacity benefit.

Similarly, there was just an 8-10% success rate among claimants with mental or physical health problems.

IPPR North said this was partly because the programme was underfunded, with the Department for Work and Pensions (DWP) spending just £1,290 for each participant.

In addition, funding was distributed on a ‘payment by results’ basis, which IPPR North said encouraged contractors to target participants who were easier to help, despite being offered additional incentives to help groups such as ESA claimants.

Discouraging innovation

It also said the payment system meant providers were discouraged from innovating and experimenting to help participants who were further from the labour market.

The Public Accounts Committee found in 2014 that the companies delivering the Work Programme had spent less than half of what they promised on supporting harder-to-help claimants.

The Work Programme is due to expire in 2017 and be replaced by the Work and Health Programme, which will be co-commissioned by local authorities.

However, its £130m budget will be one-fifth of that of the previous programme, which IPPR North said would discourage innovation even further.

In addition, the Work and Health Programme in Manchester was supported by £20m funding from the European Social Fund, which Sir Howard Bernstein recently suggested it may not be able to access after the UK voted to leave the European Union.

IPPR North therefore proposed that the new Work and Health Programme should be funded by ‘welfare earnback’ joint venture companies. These would be funded by partners including the local combined authority, local NHS commissioners, the Treasury and the DWP, and led by the metro mayor or a local authority leader.

The programme would adopt a ‘whatever works’ approach, with hard to reach participants receiving multi-agency support, which could involve anything from physical and mental health support to literacy classes.

In addition, the think tank said local government should receive separate rewards every five years if their job creation activities resulted in the employment of the hardest to help.

(Image c. HelenCobain)

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