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Work programme will do little for people in economically weaker areas

Anna Kharbanda

10 June 2011

Under embargo until: 00.01hrs  Friday 10 June 2011

With the new Work Programme underway in parts of the country from today (10 June), The Work Foundation is warning that the programme will do little to improve employment opportunities for people living in economically weaker areas. It will be difficult for private contractors to deliver the programme at a profit in certain parts of Scotland, Wales and London, thus disincentivising activity in these areas (see appendix for regional breakdown).

Neil Lee, senior economist at The Work Foundation said, “The Work Programme is based on a national payment structure and does not take into account local and regional variations in labour demand. Economic growth is faltering and parts of the country - still dealing with the fallout from the recession - are facing significant public sector job losses.

“As the Work Programme is based on payment by results, contractors carry the initial risk. There is therefore the danger that private contractors will focus on investing in places where they are more likely to get people into work to secure a return on investment. The financial risk may also be passed down to small, local voluntary sector organisations which could be knocked out of the market as a result.

“London presents a more complex picture. Although demand for labour is generally strong across the city, other barriers pose a problem for getting people from certain areas into work, including such factors as cost of living, housing and childcare. There is also intense competition for the low skilled jobs that are available.”

 “The programme’s success is really dependent on the speed of economic recovery and the availability of suitable job vacancies for participants. This could be difficult as the programme’s minimum success criteria are in most cases above that which have been achieved by other employment programmes during times of economic growth.

”The pattern of service delivery across areas should be monitored closely. If there are significant variations in performance across different areas, the government should look again at the payment structure to reflect differences in labour demand and the associated additional cost of supporting people in these areas. Doing this will ensure people get the support they need regardless of where they live.”

Ends

Media enquiries:

Anna Kharbanda 020 7976 3646 akharbanda@theworkfoundation.com

Tom Phillips 0207 976 3554 tphillips@theworkfoundation.com

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Notes to editors
  1. Neil Lee, senior economist at The Work Foundation is available for interviews and briefings.
  2. A full paper is being published on this next week. Lizzie Crowley, researcher at The Work Foundation is the author of the paper.
  3. The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks. In October 2010, Lancaster University acquired The Work Foundation, forming a new alliance that will enable both organisations to further enhance their impact