It's been over a year since the Work Programme first went live. Since its launch it has fast become one of the hottest political potatoes to be flung around the voluntary sector, and indeed Westminster. A steadily worsening economic and labour market backdrop has provided an even sharper focus on the programme's ability to get people back into work. The role and experiences of charities as subcontractors on the £5 billion initiative has likewise become a matter of intense debate.
Monitoring this experience was one of the main reasons NCVO first set up its Special Interest Group for Work Programme Subcontractors (SIG). Predictably research from the group one year into contracts has been greeted with intense media attention.
While one year marks a relatively narrow snapshot of five-to-seven year contracts, the research highlights the beginning of some worrying trends.
Most concerning is the issue of contract sustainability, with around 70% of respondents fearing their contract will not be viable for the full term. Indeed 46% expect their contracts to fail within the next six months. The reasons for this appears to be a mixture of poor referral volumes, a lack of capacity for dealing with a payment by results model, unattractive financial arrangements and, of course, the aforementioned challenging labour market conditions. Where the precise balance lies is unclear. However, regardless of whether these figures reflect subcontractor experience more widely or merely the anxieties of those questioned, they do at least highlight high levels of negative perception. If left unchecked this could be more damaging to the Work Programme than the facts themselves.
Another problem highlighted by the survey is that money is tight. While this is hardly a revelation to anyone with an interest in the Work Programme, the fact that almost half of respondents appear to be subsidising service delivery with their own reserves is perhaps more surprising. Whether this is out of a commitment to their beneficiaries or to help navigate the payment lag of the PbR system is unclear. Needless to say if this persists the situation will become untenable for many organisations, as it has for others already.
Coupled with so many unsustainable contracts, this could have a negative impact on the diversity of Work Programme supply chains, and consequently, the jobseekers with multiple barriers that rely on charities with niche specialisms.
However, the survey as with the Work Programme more generally is not all doom and gloom. One of the more encouraging findings is the low occurrence of customer 'parking'. An NCVO report highlighting some initial concerns of charities when the Work Programme was first starting out foresaw 'creaming and parking' (the practice of servicing easier to help customers at the expense of those with multiple barriers to work) as a potential problem going forward. So it was a welcome surprise that over three-quarters of respondents claimed to have not 'parked' any of their customers.
Likewise, the issue of data transparency and its consequences for the dissemination of good practice is also not perceived to be the problem some predicted, although this deserves a caveat; for a fully functioning market to operate effectively there is a need for open and transparent data. Furthermore, the information vacuum created by the 'gagging clauses' of Work Programme contracts inevitably gets filled by negative speculation from media and providers alike. It also prohibits constructive debate. Again, this only serves to damage the Work Programme to the detriment of all concerned, particularly jobseekers themselves.
All this shouldn't distract from the fact that the Work Programme is a mixed bag with both good and bad practice. Furthermore it is still relatively young. This means there is still time for government to work with the sector to address some of the concerns raised in the survey. The new Employment Minister Mark Hoban has indicated his doors are wide open to NCVO to do just this. With this in mind the next round of research will hopefully have more positive trends to report.
Paul Winyard, Partnerships and Public Services, NCVO