Companies running the government’s flagship back-to-work programme are “parking” sick and disabled jobseekers on benefits, because they are “just to hard” to help.
The Work and Pensions Select Committee criticised Work Programme providers for spending less than half of what they promised on ‘harder-to-help’ benefit claimants.
The committee also described the government’s inability to incentivise providers to support sick and disabled people into work as a “scandal”, adding the government must do more to tackle poorly performing contractors.
The Department for Work and Pensions (DWP) is responsible for the Work Programme, which aims to help people who have been out of work for long periods to find and keep jobs.
Prime contractors are paid by the DWP to provide support to people to get them into long term employment using a payment by results approach. The amount the Department pays a prime contractor depends on its success in getting people into sustained work.
The DWP has 40 contracts with 18 prime contractors, the committee says. Either two or three prime contractors operate in 18 different geographic areas across England, Scotland, and Wales. Prime contractors may subcontract some or all of the support they provide.
The Department will stop referring people to the Work Programme in March 2016, although payments will continue continue to be made until March 2020.
Margaret Hodge MP, Chair of the Committee of Public Accounts, said:
“The Department has not succeeded in incentivising Work Programme providers to support harder-to-help claimants into work. Almost 90% of Employment and Support Allowance claimants on the Work Programme have not moved into jobs.
“Evidence shows that differential payments have not stopped contractors from focusing on easier-to-help individuals and parking harder-to-help claimants, often those with a range of disabilities including mental health challenges.
“Data from Work Programme providers shows that they are, on average, spending less than half what they originally promised on these harder to help groups.
“It is a scandal that some of those in greatest need of support are not getting the help they need to get them back to work and are instead being parked by providers because their case is deemed just too hard.”
“The Department must do more to encourage providers to work with harder-to-help groups by tackling poorly performing prime contractors and sharing information on what works.
“It should also collect and publish information from each provider on how much they are spending on different payment groups.”
Margaret Hodge MP also said the committee had concerns about Work Programme providers referring sick and disabled benefit claimants for sanctioning:
“We are also concerned about how the Department’s sanctions regime is operating. Sanctions can cause significant financial hardship to individuals, and it is not clear whether the sanctions regime actually works in encouraging people on the Work Programme to engage with the support offered by providers.
“Feedback from some constituents suggests that the number of sanctions has been increasing and that some providers have been recommending sanctions more than others. The Department confirmed that Seetec has referred more claimants for sanction than other providers.
“The Department should monitor whether providers are making the right sanction referrals to the Department and that they are not causing unfair hardship. It should publish the number of sanctions by provider.
“The Department has designed the contracts with providers in a way which exposes the taxpayer financially.
She added: “After a slow start, performance of the Work Programme is improving, but there is still a long way to go before it is working effectively for all.”
Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, said:
“The Government’s decision to put all unemployed people through the same ‘one size fits all’ programme has clearly failed. This report is further evidence that the Government’s Work Programme is failing to give disabled people the chance to work and get on in life. Just one in 20 disabled people on the Work Programme actually get a job.
“We need to get the benefit bill down, so a Labour government will bring in a Compulsory Jobs Guarantee and reform the Work Programme to bring in a dedicated Work Support programme to give disabled people and job seekers the chance to get off benefits and into work.”
TUC General Secretary Frances O’Grady added:
“Once again the Public Accounts Committee has exposed private contractors for broken promises and poor performance.
“The Work Programme is yet another expensive failure for Iain Duncan Smith and the Department for Work and Pensions. Private companies are milking the tax payer without delivering the results they promised for people who are desperate to get a decent job.
“Disabled people have been most let down and are being unfairly sanctioned in record numbers instead of getting the help they need to get a job.”