1 Introduction
Announcement of the Work Programme
1. Employment programmes to help long-term unemployed
and certain other economically inactive people to find jobs and
to come off benefits ("welfare to work") have been delivered
through government contracts with the private, public and voluntary
sectors since the 1990s.[1]
The Coalition Government announced its plans to "end all
existing welfare to work programmes and create a single welfare
to work programme to help all unemployed people get back into
work" as part of its Programme for Government in May 2010.[2]
2. The scheme will be called the Work Programme
and will replace existing contracted employment programmes for
a range of unemployed and certain other economically inactive
people, including those with health conditions and some disabled
unemployed people. The programme will not, however, replace Work
Choice.[3] Contracts to
deliver most existing programmes (Flexible New Deal, New Deal
for Young People, New Deal 25+, New Deal for Disabled People,
New Deal for Lone Parents, Pathways to Work, Progress2work and
Employment Zones) will end during spring/summer 2011. The Work
Programme will be rolled out nationally in June 2011.[4]
We discuss the transition from existing contracts to Work Programme
contracts in chapter 9.
3. The Work Programme will be available to people
claiming income-related Jobseeker's Allowance (JSA) and Employment
and Support Allowance (ESA) (both income and contribution-based).
The programme categorises customers into eight groups, based on
the benefit which they are claiming at the time they are put on
the Work Programme. For some customer groups, individuals will
need to have been receiving benefits for a specific period before
becoming eligible for the programme.
4. The eight groups will form the basis for differential
payments, which are designed to incentivise prime contractors
to support the hardest to help by offering these organisations
larger payments for finding jobs for those furthest from the labour
market. The intention is to ensure that prime contractors do not
focus simply on working with people for whom it may be easier
to find jobs. We discuss the differential payments model in chapter
4.
5. Some key features of the Work Programme are
as follows:
- Providers will be required
to help benefit claimants into sustained employment of up to two
years rather than the previous requirement of only six months
- It will allow early access to employment support
for those facing the severest barriers to work; for example, those
under 25 will be able to access the programme earlier than in
previous programmes
- Payment to contracted providers will be largely
results-based and the additional challenge faced by providers
in finding employment for people who face the greatest barriers
to work will be recognised in a differential payments system
- The Programme will be funded from the money saved
in future benefit expenditure as people are moved into work
- The Department for Work and Pensions (DWP) will
not prescribe the type of support which providers will be required
to provide. Providers will be free to determine the type of intervention
which a client requires depending on their specific needs (the
"black box" approach).[5]
Background to this inquiry
6. We were keen to examine the contracting arrangements
for the Work Programme, including requirements to be placed on
providers, and report on our findings before the programme is
rolled out nationally. Our inquiry therefore focused on the following
issues:
- The steps DWP needs to take
to ensure that a procurement programme of this size and complexity
is managed effectively and delivers high quality outcomes
- The extent to which the Work Programme will differ
from existing contracted employment programmes
- The relationship between prime contractors and
subcontractors and DWP's role in overseeing this relationship
- The role of Jobcentre Plus in delivering the
Work Programme
- The implications for providers of the increase
in volume and the change in profile of Jobseeker's Allowance claimants
arising from the migration from Incapacity Benefit to Employment
and Support Allowance
- The implications for providers of "payments
by results" arrangements, with particular reference to the
voluntary and social enterprise sector
- The likely effectiveness of a differential payment
scheme in encouraging providers to support harder to help groups
- The implications of regional variations in the
labour market.
7. We received 37 submissions from a range of
organisations and individuals. We took oral evidence from academics
and experts; prime contractors, subcontractors and the industry
body, the Employment Related Services Association; and the DWP
Minister, Rt Hon Chris Grayling MP, and DWP officials. A full
list of witnesses is set out at the end of the report. We also
visited the United States to talk to organisations and individuals
involved in the delivery of welfare to work services in the State
of Wisconsin and New York City and academics in the field. We
are very grateful to all those we met in the US and to everyone
who contributed to the inquiry.
8. We would also like to thank our Specialist
Adviser for this inquiry: Ian Mulheirn, Director of the Social
Market Foundation.[6] We
very much appreciate the contribution he made to our work.
9. We intend to look at the operation of the
Work Programme in more detail, focusing more specifically on its
effectiveness in supporting different customer groups, later in
this Parliament.
1 See, for example, David Freud, Reducing dependency,
increasing opportunity: options for the future of welfare to work:
An independent report to the Department for Work and Pensions,
March 2007. Back
2
HM Government, The Coalition: our programme for government,
May 2010, page 23. Back
3
Work Choice, a separate programme to help disabled people with
severe disability-related barriers to work, was launched by DWP
in October 2010. Work Choice replaced the existing WORKSTEP and
Work Preparation programmes and the Job Introduction Scheme. Back
4
HC Deb, 10 June 2010, cols 37-8. Back
5
HM Government, The Coalition: our programme for government,
May 2010. Back
6
Relevant interests of the specialist adviser were made available
to the Committee before the decision to appoint him on 17 November
2010. The Committee formally noted that Ian Mulheirn declared
an interest as Director of the Social Market Foundation, in that
some of the Foundation's work has been sponsored by private and
third sector employment service providers.
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