DWP should monitor Work Programme contractors more closely

16 May 2012

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16 May 2012 | Adam Leach

MPs have commended the Department for Work and Pensions (DWP) for the speed with which it implemented the Work Programme, but called on it to monitor the performance of contractors more closely.

Department for Work and Pensions: the introduction of the Work Programme, a report published yesterday by the Committee of Public Accounts (PAC), lauded the department’s efforts to implement the programme – which provides support for jobseekers to find and stay in work - promptly and for transferring some of the financial risk to contractors.

When interviewed by SM in August, DWP commercial director David Smith described the Work Programme as “truly ground-breaking”, as it was financed by the outcome of what suppliers deliver.

But the committee, chaired by Labour MP Margaret Hodge, issued a number of recommendations for DWP to take forward. In particular, it called on the department to “require” contractors set “measurable minimum standards” that all participants in the programme can expect.

Prime contractors are paid on a performance basis, where the amount they are paid depends on the number of people they get into, and how long they stay in, work. They are also paid an ‘attachment fee’, depending on the level of benefit received by candidates.

The PAC said through this method, contractors are paid regardless of the level of service individuals receive. “This method raises the risk that prime contractors ‘park’ the hardest-to-help within each payment group as these individuals may require more support. Conversely, in cases where little input is required contractors may get paid for doing very little,” it said.

The Committee said currently the DWP relies on its contractors to set out the standard of services all their participant should expect, but added “these are not always measurable”. It recommended “the department should require prime contractors to set measurable minimum standards that all participants can expect.”

* Today, the National Audit Office published a separate report on preventing fraud within DWP programmes.

Preventing fraud in contracted employment programmes, praised the Work Programme and its predecessor the Flexible New Deal for tightening anti-fraud controls after the New Deal - which finished in 2011 - was found to account for more than half of reported fraud in employment programmes since 2006.

It said that both the Flexible New Deal (launched in 2009) and the Work Programme (launched in 2011) included measurable and verifiable outcomes, which “enable the department to estimate the value of fraud and error, and to recover overpayments based on those estimates”. It also said DWP had introduced contractual conditions requiring contractors to have anti-fraud controls.


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