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The Work Programme, ESA claimants, and the problem of payment by results

Jenny Gulliford

20 June 2013

The Employment Related Services Association (ERSA), the trade body for the welfare to work sector, have pre-empted the government’s release of the latest Work Programme’s statistics on the 27th June by a week. Today (20th June 2013), they published their own data collected from their members revealing the number of job starts since the beginning of the programme.

It is worth making two points before we discuss their findings. Firstly, these figures should not be confused with the Department of Work and Pensions own standard unit of measurement- ‘job outcomes’, which occurs when a person has been in continuous employment for either three or six months. It should be noted that it is only when a person reaches a ‘job outcome’ point that a provider receives the majority of their funding. This data will be published next week.

Secondly, statistics provided by any trade body are not subject to the same rigorous standards as official government statistics. That is not to say that these figures aren’t accurate, but simply that they aren’t the same as government statistics.

The big news from this release is the findings on job starts for people claiming Employment Support Allowance (ESA). This is the main unemployment benefit for people with disabilities. ERSA found that only 15% of people who have been on the Work Programme since June 2011 have started a job; that’s only 15% of people who have been on the programme for the full two years. The job outcome rate - the condition providers are dependent upon to claim their payment - must be almost non-existent.

Whilst, as ERSA points out, ESA claimants tend to be further away from the labour market than Jobseekers Allowance claimants- with around a quarter not having been in employment in the last 11 years- this doesn’t go far enough in explaining why these figures are so low. Other ‘back to work’ programmes for people with disabilities such as Work Choice have a six month job start rate of 31.7%

In response to these shockingly low figures the ERSA states that ‘it is becoming clear… that the costs of helping jobseekers on ESA back into work are significant and cannot all be met by the Work Programme. ERSA is therefore advising that there should be a review of the entirety of resources available to this group, including health and skills budgets’.

This raises an interesting point, and one that goes to the heart of the Work Programme’s model. Can specialist support be provided in a mainstream and all-inclusive model, especially if it’s a ‘payment by results’ model?

I’ve discussed in previous blogs the impact of the Work Programme’s pay structure- ie, the dangers of ‘creaming and parking’ and the problems that this can cause for people who need specialist support and the organisations that provide it.

I don’t want to repeat myself, but we are nearly half way through the contract life of what was one of the first back to work programmes in the world almost wholly dependent on payment by results. Questions need to be asked about this highly innovative and relatively untried pay structure. Providers, policy-makers and everyone working in the employment sector needs to start thinking- is it just the financial incentives which aren’t calibrated correctly? Or will a payment by results model, with as broad an intended audience as the Work Programme, always skew towards helping only those who need the least support?

Comments in Chronological Order (Total 6 Comments)

Andy Platt

20 Jun 2013 8:26PM

ESA is NOT the main 'unemployment benefit' for people with disabilities. It is a sickness benefit.

The fact that the main criterion for qualification is that you must be 'incapable of work' goes a long way to explaining the small number of ESA claimants who get a job. Only in successive governments' fevered imaginations are thousands of people 'languishing' on ESA when they could be working.

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