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The Work Programme - is it too early to be deemed a failure?

Jenny Gulliford

28 November 2012

Yesterday (27 November) was a big day for the Work Programme, with the Department for Work and Pensions releasing its first set of statistics on job outcomes.  A job outcome is when a participant has successfully maintained employment for six or three months, depending on what kind of benefit they are claiming. As many critics of the Work Programme have already pointed out, the total number of people who have achieved a job outcome is only 3.5% of all those referred between June 2011 and July 2012. Given that the original Invitation To Tender (ITT) for the Work Programme laid out the initial non-intervention performance as 5% in a year, this would suggest that the Work Programme is underachieving. However, whilst I have my concerns about the Work Programme (see my blog here for some worrying stats on the future of charity sub-contractors in the scheme) these figures have been defended by many in the industry, and it’s useful to have a look at the arguments that attempt to mitigate these figures.

Firstly, it can be argued that the minimum non-intervention performance level of 5% was based on predictions made back in 2010, when the government were a lot more optimistic about the future of the labour market. Whilst employment has risen recently in the last few months, it has not been to the level that many might have expected back when the ITT was drawn together. However, CESI argues that even with this taken into account the Work Programme should be doing better than it is, and claim that the job outcomes figure is 47% lower than their own benchmark. 

The Employment Related Services Association (ERSA), the trade body for the welfare to work industry which represents both prime contractors and sub-contractors in the Work Programme, argues that jobs starts were severely affected by both normal seasonal fluctuations and the beginning of a recession in 2011/2012. In their data we can clearly see a significant dip in December 2011 from which it took three months for the programme to recover from.  This could have led to important knock-on effects on the number of people in the Work Programme meeting the job outcome goal.  This data also shows that that the number of people starting jobs has been increasing significantly in the last few months. According to this data the total number of job starts rose from around 50 per cent in the six months up September 2012, from 18,750 to 28,648. Coupled with information from the government’s statistical release which shows that the number of job outcomes per month has been steadily rising it’s possible to make the case that we’re not seeing the whole picture here, with the many people currently in employment yet to have made it to the six or three month job outcome goal.

Of all the arguments put forward by the government and the industry, it’s perhaps this that is the most convincing, and perhaps the hardest to argue with. It means that, whilst it’s frustrating, in many ways it’s still a little too early to say whether the Work Programme is a success or not. The current figures are undeniably bad, but it is possible that it could pick up over the next few months. It is after all a long-term scheme, and it might not be until the next statistical release that we can begin to make a final decision on the Work Programme. After that point the impact of the increase in job starts in recent months will hopefully be clearer, and we will be able to see if they ever translated into sustainable employment.

 If they haven’t, the ideas that underpin the Work Programme- payment by results and the freedom of the ‘black box’ approach- will be brought into question. It’s not as if concerns surrounding these concepts haven’t been aired on numerous occasions. Questions as to whether a payments by results model gives sufficient incentive for providers to invest in those who are furthest away from the labour market and unlikely to find employment in the current economic climate has dogged the programme from the very beginning. Whether or not the hands off ‘black box’ approach will necessarily lead to innovation is also up in the air. Considering that the government has been applying these principles to many other policy areas, such as the Troubled Families Programme and elements of the Youth Contract, I’m sure many will be watching this space with concern.