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Work Programme not covering upfront costs

Charities are leaving the Government’s Work Programme for the long-term unemployed, as they argue the upfront payments they receive are inadequate.

The Single Homeless Project (SHP) in London has left the £5bn scheme as the initial cost of helping long-term jobseekers find work is not covered by the upfront fees of up to £600.

The Work Programme is delivered by 18 prime contractors, each with a network of dozens of subcontractors, who are primarily paid by results for successfully finding people jobs that they keep.

SHP chief executive Liz Rutherfoord said the payments the charity receives are “not enough to meet the needs of the clients being referred to us”. She added: Most of them are not job-ready, or even in a position to be searching for work, so the kind of intensive work we are doing with them, that money doesn’t come anywhere near to covering it.”

The prime contractors are supposed to take on the bulk of financial risk due to their larger capital, but critics argue that this is simply getting passed down to the subcontractors, many of whom are from the voluntary sector.

Baroness Stedman-Scott, chief executive of the employment charity Tomorrow’s People, told the BBC: “The principle of the working capital transferring down has not materialised in the way we aspired it would. They’ve got severe barriers, and no matter how you try, the intervention and the support they need is costly, and as far as the Work Programme is concerned, there just does not seem to be the resources.”

Employment minister Chris Grayling responded: “The deals that are done between sub-contractors and prime contractors are entirely down to them. It is certainly the case that some organisations have done deals which are not working for them but I can’t be the person who does the deals for them.

“We have created an environment where we have given – particularly the voluntary sector sub-contractors – all the cards in their hand, but if they haven’t used those cards, that is not something the Government can do for them.”

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