NAO claims Work Programme will not achieve DWP performance targets
January 24, 2012
DWP has introduced the Work Programme quickly, in just over a year, and this has had benefits, but the speed with which it was launched has also increased risks, according to a report published today by the National Audit Office (NAO). The NAO claims that DWP and providers have made assumptions about how many people the Work Programme will get back into work but there is a significant risk that they are over-optimistic.
The report highlights some of the benefits of the Work Programme, such as the fact that providers are paid primarily for the results and that they will receive higher rewards for supporting harder to help claimant groups into work.
However, the report also suggests that assumptions about the feasibility of the Work Programme might be over-optimistic. The NAO’s analysis suggests that 26% of the largest group of job seekers in the Programme will get jobs, compared to DWP’s estimate of 40%. The Employment Related Services Association, ERSA, has challenged this analysis, suggesting the NAO’s figures are not based on performance information and that it is too early to draw any conclusions on likely performance levels across the life of the contracts.
The NAO report goes on to suggest that some contractors in areas of high unemployment may struggle to meet nationally set targets and that one or more contractors will get into serious financial difficulty as a result. Today’s report also claims that no alternatives to the Work Programme were considered as part of the business case, nor was it piloted to test assumptions.
The NAO claims that it has so far cost £63 million to terminate previous welfare to work contracts, including the Flexible New Deal. Two former contractors are reported to not yet have agreed termination settlements. The report is also critical of the delays in introducing the PRaP system, claiming that there is a resultant risk of fraud and error going undetected. The NAO further claims that fewer clients in the ‘harder-to-help’ category than expected have been referred onto the Work Programme. As a result, some sub-contractors are frustrated at the speed with which clients have been referred to them.
Amyas Morse, Head of the National Audit Office, said: “The Department for Work and Pensions has made a significant effort to learn the lessons of previous welfare to work programmes. It is too early to judge the success of the Work Programme, which will depend on whether the Department can get more people into work than previous programmes. The Department has set providers stretching performance targets and it needs to ensure that they do not cut corners to stay in profit, such as targeting easy to reach people, reducing service levels or treating sub-contractors unfairly.”
A press statement from ERSA in response to the NAO report states that: “ERSA, on behalf of providers, welcomes many of the findings of the National Audit Office report, particularly the focus on referral numbers and type. However, it believes that its conclusions in relation to the likely performance over the life of the contract are premature and unsubstantiated. Clearly, however, the deteriorating economic backdrop means that there needs to be a strong partnership with the Department for Work and Pensions to ensure that the Work Programme delivers for all customers.”
The full report from the NAO can be found at the following link:
http://www.nao.org.uk/publications/1012/dwp_work_programme.aspx
You can view the ERSA press statement in response to the NAO report here: