In May 2010, the Coalition Government announced that the Work Programme would replace all existing welfare-to-work programmes by the summer of 2011. The Work Programme operates as a payment by results scheme for the organisations assisting the unemployed to find work.
In April 2011, the then Employment minister Chris Grayling announced the preferred bidders to run the Work Programme. Private-sector companies accounted for 15 of the preferred bidders, with two of the 18 being voluntary sector organisations and one public sector organisation.
In Scotland, the two providers are Ingeus and Working Links. Ingeus were previously known as Work Directions and started out in Australia in 1989. In 2002, they started operating in the UK. In 2011, Deloitte took a 50% share in Ingeus UK. Working Links was established in 2000 by the Shareholder Executive, Manpower, and Ernst and Young Consultants.
A BBC documentary illustrated how staff of Triage in Aberdeen referred to clients of the Work Programme as LTBs – code for ‘lying, thieving bastards’. The documentary also reiterated that staff were told not to spend much time and effort assisting jobseekers with disabilities as they were seen as too difficult to get paid employment
In general, Jobseekers Allowance (JSA) claimants are mandatory referred to the Work Programme after nine months if they are aged 18 to 24 and after 12 months if they are aged 25 or over. Employment and Support Allowance (ESA) claimants who are expected to be fit for work within three to six months are mandatory referred from the date of their work capability assessment.
The DWP pays providers using a payment-by-results mechanism. There are three key payment elements – an attachment payment for taking a claimant on the programme (due to be phased out); a job outcome payment for participants who have been in work for a continuous or cumulative period of employment (differs between claimant groups, generally three to six months); and a sustained outcome payment paid every four weeks for keeping a participant in employment.
The payment structure means that a provider can make between £3,810 for a JSA claimant aged 18 to 24 and £13,720 for an ESA claimant who have recently moved from Incapacity Benefits (IB) – in terms of an attachment payment, a job outcome payment, and a sustained outcome payment.
Between June 2011 and March 2013, over 100,000 people joined the Work Programme in Scotland. Slightly more people joined Ingeus than Working Links. The DWP expected that 36% of people referred to the programme would find work which would lead to a payment to providers.
Comparing the figures in Scotland of JSA and ESA/IB claimants between June 2011 and March 2013, it can be seen that the Work Programme is far more successful in getting JSA claimants into work, than those of ESA/IB.
|Job Outcome Payments
Both the job outcome figures for JSA and ESA/IB claimants are much lower than the government’s Minimum Performance Level of year two of the programme (Between 33 per cent and 16.5 per cent depending on age and benefit received). The figures for ESA/IB claimants indicate that the Work Programme simply isn’t delivering for people with health problems.
|Job Outcome Payments
The poor job outcomes of ESA/IB claimants has led to accusations that Work Programme providers are focussing on those easiest to help into work and ‘parking’ those claimants who face more series obstacles to work – people with disabilities, people with a history of substance abuse, and homeless people.
The Work and Pensions Select Committee has asked the Government to consider departing from the current pricing model to a much more needs-based individualised system. The Committee has also suggested that the £248 million under spend of the Work Programme, due to the under-performance of providers, be spent on helping jobseekers with disabilities.
Another controversy of the Work Programme is the number of benefit sanctions on claimants. Between July 2011 and April 2012, there were 7,280 JSA claimants sanctioned in Scotland. Claimants are sanctioned for not attending meetings or mandated activities, such as workshops. This is leaving many clients in a desperate financial situation.
There are also allegations that providers are inappropriate with clients. A BBC documentary illustrated how staff of Triage (a sub-contractor of Ingeus and Working Links) in Aberdeen referred to clients of the Work Programme as LTBs – code for ‘lying, thieving bastards’. The documentary also reiterated that staff were told not to spend much time and effort assisting jobseekers with disabilities as they were seen as too difficult to get paid employment.
In a survey carried out by the BBC, 184 organisations responded which were listed on with the DWP as third party providers (specialist expertise which the main Work Programme Providers can utilise). The survey found that 80 per cent of these organisations had fewer referrals than expected and 40 per cent of respondents had had no referrals at all.
There are a number of changes which could be implemented to improve the Work Programme. Firstly, there needs to be greater transparency over which third party providers are been utilised and that there needs to be financial penalties on Work Programme providers who do not utilise specialist services for their ESA/IB clients.
Furthermore, it may simply be the case that many ESA/IB clients have too many complicated issues and the present Work Programme simply is not set up to assist them. The current under spend could be utilised to set up a specific programme for them.
Richard Johnson writing in the Guardian argued that the DWP tendering process virtually ensured that those organisations who put the lowest bids in won. Thus, ensuring the focus on those easiest to help and ‘parking’ those not. Any decent tendering process should focus on assisting the most disadvantaged.
This may result in the Work Programme providers being reluctant to invest any resources in external training for their clients to improve their employability and improve their opportunities of getting paid work. The providers need to be encouraged to seek relevant training for their clients.
The sanctions regime needs revisited. Clearly, removing payments to benefit claimants will worsen a poor situation, leading to increased reliance on food banks and high-interest loan firms. Indeed, it may exacerbate mental health issues, making it more difficult to find work.
What is not clear are the relationships between the Work Programme providers and employers. Employer engagement is an area which could develop relationships, leading to a better chance of Work Programme clients finding paid employment. The DWP could ensure greater transparency in this area and play a greater role in bringing employers and providers together.
A major issue with any welfare-to-work initiative is the number of paid employment opportunities available. According to the Labour Force Survey, there were 205,000 unemployed people in Scotland (May 2013), whilst there were only 33,285 Jobcentre Plus vacancies (November 2012).
In addition, there will be people in paid employment who will be applying for new jobs. Thus, there is an enormous challenge for people with health problems, who may have been out of work for years to compete against people without such issues for paid employment.
There are real concerns with the levels of youth unemployment in Scotland. The figures for July 2013 showed an increase of nearly 2,000 from June 2013 to take the claimant count to 37,030 of 18-24-year-olds (7.4 per cent). In general, people aged 18-24 have to be claiming JSA for nine months before they are referred to the Work Programme. An improved Work Programme would look to see young people involved in less time in order to lessen the chances of them becoming long-term unemployed.
Indeed, the Work Programme could learn from the Labour Future Jobs Fund. The fund offered people aged between 18 and 24 who had been unemployed for a year or more a guaranteed job for six months. Research has indicated that the net benefit to society of the scheme was £7,750 per participant.
Whatever the outcome of the independence referendum, Scotland needs to think about the best methods of supporting people into paid employment. The evidence is that the Work Programme is not delivering sufficiently for people on ESA/IB and the providers are focussing on those easiest to help into work for a quick payment.
There is also the issue of accountability of private firms delivering welfare-to-work. What say do individuals and communities have over these services? An enhanced programme would give individuals a real influence in the training and services they receive.
Furthermore, many people will be in the position where paid employment will not be their immediate goal – their circumstances may dictate that voluntary work, education or training may be more appropriate to boost confidence and skills and they should be supported to do so.
There is evidently a need for more jobs for the unemployed to fill. Any decent society would invest in areas to create paid employment opportunities that meet the needs of society, such as house building, public services and the transition to a low-carbon economy.