Latest Public Sector News

22.08.11

Work programme targets ‘unachievable’ - think tank

Unrealistically challenging targets for employment companies being paid by results to get the long-term jobless into work could lead to the scheme’s collapse, according to a new report.

The Social Market Foundation (SMF), a strong backer of the general principle of payment-by-results in employment, nonetheless expects at least 90% of the organisations involved will have their contracts terminated because of “unreachable” targets set by the Department for Work and Pensions (DWP).

Using data gathered during the back-to-work programme launched under Labour, the Flexible New Deal, the SMF calculated that the Coalition’s own work programme will get around one in four of its Jobseeker’s Allowance clients into work – significantly below the minimum performance threshold.

Ian Mulheirn, director of the SMF, said: “The Government has warned that it will terminate the contracts of providers who cannot deliver these minimum levels, but has set these minimum levels almost impossibly high. This threatens to create huge instability in the programme.”

The SMF suggests that the Government’s analysis of the likely consequences of having no proactive policy at all is also too optimistic, suggesting that far more people would ‘naturally’ find work than really would.

Mulheirn added: “The Work Programme is built on shifting sands. As if the performance targets weren't already too tough, the deteriorating state of the labour market is making the outlook for the scheme even more precarious.”

But employment minister Chris Grayling said the SMF’s analysis was flawed, because the Coalition’s work programme was radically different from Labour’s Flexible New Deal. He said that, unlike the previous scheme, employment providers were now free to go about it in their own way, and would get larger payments for more difficult clients, allowing them to invest more in getting them into work.

He said he was confident they would be successful, and that their contracts would not be renegotiated.

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