THE BLOG

The Work Programme Is Not Working - It Needs Fixing - And Swiftly

25/02/2013 12:50 GMT | Updated 26/04/2013 10:12 BST

The House of Commons Public Accounts Committee report on the Work Programme, which was published last week, is the latest in a series of academic, analytical and media critiques which have demonstrated that the Programme has not lived up to its promise - or at least the promise of Ministers. Only last week The Third Centre Research Centre found the scheme lacking too.

There are many reasons for this state of affairs. One of these is that the wider economic climate, in spite of some growth in employment, has curtailed the number of job opportunities necessary for the Work Programme to be successful. Indeed, the PAC report claims that as many of the long term unemployed would have found work without the Programme as did as a consequence of it!

Neither has the Programme has supported the numbers of people (who, for various reasons, are furthest from the labour market) that it was meant to. Prime and sub-contractors have been incentivised to work with those easiest to place in sustainable employment (so called 'creaming' behaviour) - and to 'park' the others. Whilst predictable, this is a social scandal.

There are also anecdotal reports of referrals of people with terminal illnesses or such severe mental health problems as to be too far from employment to benefit from the Work Programme, even if it had been successful. This too is a social scandal.

It is apparent that many specialist providers of employment support and place services have repeatedly not been offered the opportunities to work with people with special needs. These providers, in common with many sub-contractors, have not been guaranteed a flow of unemployed job seekers and have experienced many though not all prime contractors manage demand and financial risk at the total expense of their suppliers.

Given that many of these specialist providers are either social or charitable organisations or small SME companies, this has had serious implications with providers going into administration or simply having to use reserves to survive or to subsidise government from charitable funds.

These suppliers have, to their horror and financial distress, found themselves locked into some of the most inflexible and one-sided contracts that I have ever seen in my decades experience of public service contracting. They have faced massive cash flow costs and challenges as payments, when they do come, are many months after the expenditure has been incurred.

It would seem that many of the prime contractors too have faced some hard commercial choices and difficulties.

There are claims that the Department of Work and Pensions and in particular Job Centre Plus have not been as co-operative as they might have been to ensure a flow of work to the prime contractors and their supply chains. And in some cases, it has been the primes that have favoured their own provider teams and not passed on sufficient work to their supply partners. Sadly, it is likely that both claims are correct but this does not address or explain the core problems.

The Work Programme has been a failure (if not outright disaster) for prime contractors, specialist providers especially charities, the long term unemployed and the tax payer. That is some achievement!

As the Local Government Association stated in its recent report 'Hidden Talents', the Work Programme providers have not been encouraged let alone 'required' to work with local authorities and other local organisations that understand and are close to both their local labour markets and those organisations that can make a difference. Quite the reverse. Perversely, the nature of the contracts have actually led to a fragmentation and divisions between the very organisations from the public, business and third sectors that ideally (and normally) would collaborate to secure the right long term outcomes.

Responsibility for what has happened cannot be evaded by government and the DWP. Of course, some prime contractors and some of their suppliers may not have behaved or performed to the standards that Ministers might have expected - but ultimately, these prime contractors were selected by the DWP and are subject, as are in turn their suppliers, to DWP contractual terms.

And for the government, an additional and very serious problem is that the Work Programme has come to be seen by many providers and commentators as the core reason why the public sector should not in future contract through any prime contractor models or on the basis of any future 'payment by results' scheme. The very heart of this type of contractual and procurement model is now close to being discredited by the disaster that is this 'flagship' programme.

What is urgently needed is a comprehensive but rapid, high-powered review of the Work Programme undertaken by an independent review team and not a small group or individual appointed by the secretary of state with a brief to report directly to him.

Such an independent review should be undertaken by a team which has both credibility and the confidence of all the key stakeholders involved. It should take evidence from all such stakeholders and people involved in the Programme, including unemployed participants, receiving employers and staff from the public, third and business sectors.

The terms of reference for this review must include reviewing and considering:

• research and analysis already undertaken in the UK and on similar programmes internationally

• the advantages and disadvantages of the procurement, contract and payments models and terms that have been applied

• improved public service supply management

• transparency and accountability in such arrangements

• whether these models and terms have impacted differently on providers from different sectors

• the options to rectify the Work Programme and refocus on it securing outcomes for all the long term unemployed including locally led provision

• contract and service models that will encourage collaboration between providers and those who can add value to address long term unemployment

• alternative service interventions to support those with greatest needs and/or furthest from the labour market;

• and finally, to test the appropriateness of these contracting models for other public service outcomes

A great deal of public money has been spent - not always wisely or effectively it would seem - and many people have been greatly disappointed, and a great many more remain unemployed, depressed and seemingly without much good reason for hope.

Sometimes leadership requires the courage to say 'we got it wrong and here is what we are going to do about it'. The government has an opportunity to accept that mistakes have been made, and lessons can be learned. I suggest that it needs to be seen to be ready to learn - and above all, act.