DWP urges improvement from Work Programme providers

27 November 2012

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27 November 2012 | Adam Leach

The Department for Work & Pensions' (DWP) Work Programme has got more than 200,000 people into employment since it was launched – but just 31,000 have stayed long enough to meet the requirement for payment by results.

Under the Work Programme – designed to get the unemployed back into work – the DWP has a contract with 18 primary employment providers. It pays them for each candidate that is placed and stays in work for a minimum period of three or six months, depending on their classification.

Figures published today by the Employment Related Services Association (ERSA) show that 207,883 people have entered employment through the programme since it was launched last June through to September 2012. It calculated the cost per job is £2,097, making it better value for money for the taxpayer than all previous back-to-work initiatives.

However, the ERSA figures do not take into account how long candidates have stayed in work. The government’s own figures, which were also published today, showed that from its launch up to July 2012, just 31,000 ‘job outcomes’ - where a candidate has stayed in employment for either three or six months, triggering the ‘payment by results’ to a contractor - have been achieved.

Mark Hoban, minister for employment, said: “While these figures show progress is being made, the government is clear that there is more to be done. Each provider has a performance development plan and the department is managing them vigorously to constantly improve performance. Formal contract letters requiring improvement have been issued to those providers with the lowest performance to date.”

Commenting on the figures, David Smith, commercial director at DWP, told SM: "Despite the fact that performance is under expectations, a large number of people are going through the programme and as it's structured uniquely on payment by results it's not costing the taxpayer." He added: "We are robustly managing the providers to increase their performance."

In an interview last year, Smith, and head of strategic sourcing, John Michalski, explained procurement had played a central role in establishing the programme, which in their view was “ground-breaking”.

Smith said at the time: “What’s truly ground-breaking on a government contract of this scale is it’s the first financed by outcomes. Providers don’t just get paid when they get a customer into work, it must be sustained work.”

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