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Making the Work Programme work better: how can welfare-to-work programmes improve support for disadvantaged groups?

Authors: Dr Libby McEnhill Researcher at The Work Foundation

21 October 2015

Today the Work and Pensions Select Committee released its latest report, looking at the Government’s flagship welfare-to-work initiative, the Work Programme. With the programme due for review in 2017, the report reviews contracting and delivery arrangements with a view to producing better outcomes for disadvantaged groups within the labour market.

Outcomes from the Work Programme have improved since the early years of its operation, but 70% of participants still leave the programme without having found sustained employment. Particularly poor outcomes are being recorded for unemployed people with complex needs and multiple disadvantages including disabilities, homelessness, very low key skills and weak employment histories.

The report identifies five key issues that need to be taken into account when the programme is recommissioned and makes recommendations based on these:

  • The ‘differential payments’ model has not had the intended effect of incentivising providers to work more intensively with clients with multiple disadvantages, in part because benefit type (which is the current basis for differential payments) is a poor proxy for work-readiness. The report recommends a simplified payments model, based on client characteristics (eg. low skills, weak employment history, housing problems) rather than benefit type. This would allow claimants to be more accurately categorised and payments to be made accordingly.
  • Welfare-to-work services are not currently sufficiently integrated with local services including health, education and housing, and this integration needs to be improved.
  • Specialist organisations which are often already engaged as subcontractors in the Work Programme need to be used to their full potential. Specifically, the report suggests that they should play a greater role in providing support to disabled people.
  • There should be a ‘Work Programme Plus’ for the most disadvantaged participants, with providers eligible for an upfront service fee payment to reflect the level of investment required.
  • The DWP needs to do more to encourage providers to try innovative approaches and to learn from one another.

For some participants the Work Programme is working, but it is clear that there is a core of unemployed people that are still being failed by it. Employment figures in the UK continue to rise, and as the economy recovers, those unemployed people closest to the labour market will tend to find work anyway with either minimal or no additional support. However, improved employment figures conceal a core of unemployed people - those identified in the Committee’s report - who will struggle to find sustainable, good quality work regardless of the economic outlook. This group will require intensive support if they are to avoid becoming or remaining long-term unemployed.

In its current form the Work Programme is clearly not delivering this support effectively, and as such it will struggle to address structural unemployment in the UK. Unless the government can design a welfare-to-work programme that adequately addresses unemployed people with complex needs, there is a real risk that this core of people will be left behind, unable to benefit from and contribute to the economic recovery. Today’s report should only serve to sharpen that realisation ahead of recommissioning in 2017.