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The Work Programme's only success is at 'creaming and parking' The Work Programme's only success is at 'creaming and parking'
(7 months later)
The Third Sector Research Centre (TSRC) report on the Work Programme has clearly found that welfare-to-work firms are "creaming and parking" – helping jobseekers who are more "job ready" to find work and ignoring everyone else. This cherry-picking is having a negative impact on any of their subcontractors (up to 50% of whom may be charities and third sector organisations), particularly specialist providers best equipped to help vulnerable people with more complex needs into work.The Third Sector Research Centre (TSRC) report on the Work Programme has clearly found that welfare-to-work firms are "creaming and parking" – helping jobseekers who are more "job ready" to find work and ignoring everyone else. This cherry-picking is having a negative impact on any of their subcontractors (up to 50% of whom may be charities and third sector organisations), particularly specialist providers best equipped to help vulnerable people with more complex needs into work.
The TSRC report found that a number of the subcontractors feel unable to talk about their predicament as a result of gagging clauses in their contracts. When I have spoken to these organisations myself, I have found that they are suffering for a number of reasons: they simply aren't getting any jobseekers referred to them by the big welfare-to-work prime-contractors; or the people who are referred all require very intensive support, since the "primes" are keeping all the "cream" to themselves, which is very expensive; and if they do help someone, the primes don't pay enough to cover the costs.The TSRC report found that a number of the subcontractors feel unable to talk about their predicament as a result of gagging clauses in their contracts. When I have spoken to these organisations myself, I have found that they are suffering for a number of reasons: they simply aren't getting any jobseekers referred to them by the big welfare-to-work prime-contractors; or the people who are referred all require very intensive support, since the "primes" are keeping all the "cream" to themselves, which is very expensive; and if they do help someone, the primes don't pay enough to cover the costs.
ERSA, the industry body that lobbies on behalf of all but one of the prime contractors, says that it is unfair to criticise the primes in this way. Its chief executive, Kirsty McHugh, observes: "Most Work Programme advisers, regardless of sector, are motivated by helping those furthest from the labour market into a job."ERSA, the industry body that lobbies on behalf of all but one of the prime contractors, says that it is unfair to criticise the primes in this way. Its chief executive, Kirsty McHugh, observes: "Most Work Programme advisers, regardless of sector, are motivated by helping those furthest from the labour market into a job."
This certainly used to be the case when I ran welfare-to-work offices across the country for Serco, when my advisers were constantly seeking ways to reach more people trapped more deeply in unemployment.This certainly used to be the case when I ran welfare-to-work offices across the country for Serco, when my advisers were constantly seeking ways to reach more people trapped more deeply in unemployment.
Unfortunately, such motivation is not really relevant given the design of the Work Programme contracts. The only way in which these Work Programme contracts can be delivered viably is to cream and park rigorously and cynically.Unfortunately, such motivation is not really relevant given the design of the Work Programme contracts. The only way in which these Work Programme contracts can be delivered viably is to cream and park rigorously and cynically.
This was evident from the outset, as soon as the Department for Work and Pensions (DWP) initiated the tendering process. Welfare-to-work companies either offered DWP untenable terms, and won, or went out of business. The organisations which offered no (or limited) discounts in the price competition of the tenders were those with substantial business elsewhere, notably G4S and Serco. Those who won the most contracts offered to do it cheapest.This was evident from the outset, as soon as the Department for Work and Pensions (DWP) initiated the tendering process. Welfare-to-work companies either offered DWP untenable terms, and won, or went out of business. The organisations which offered no (or limited) discounts in the price competition of the tenders were those with substantial business elsewhere, notably G4S and Serco. Those who won the most contracts offered to do it cheapest.
Though the scant data that the DWP allows into the public domain two years on clearly indicate that overall performance is poor, and those who are the least job-ready are being ignored, the primes continue to call it all a big success.Though the scant data that the DWP allows into the public domain two years on clearly indicate that overall performance is poor, and those who are the least job-ready are being ignored, the primes continue to call it all a big success.
One of the primes' more outlandish claims is that this is the cheapest welfare-to-work programme that there has ever been. If the primes hit all their targets, the programme is expected to cost the government about £300m less per annum than previous provision.One of the primes' more outlandish claims is that this is the cheapest welfare-to-work programme that there has ever been. If the primes hit all their targets, the programme is expected to cost the government about £300m less per annum than previous provision.
But the reduced cost will come mainly because under the payment-by-results model there will be fewer outcome payments to the primes because they won't be getting difficult jobseekers into work. They are giving all their advisers much larger caseloads to deal with. As a result, fewer jobseekers get and keep jobs, and those that do, find work with less money spent on them because they were cherry-picked.But the reduced cost will come mainly because under the payment-by-results model there will be fewer outcome payments to the primes because they won't be getting difficult jobseekers into work. They are giving all their advisers much larger caseloads to deal with. As a result, fewer jobseekers get and keep jobs, and those that do, find work with less money spent on them because they were cherry-picked.
On the basis of the modelling I undertook when tendering for these contracts, I estimated that about 30% of jobseekers might find and keep jobs. For the other 70%, there will be little or no assistance.On the basis of the modelling I undertook when tendering for these contracts, I estimated that about 30% of jobseekers might find and keep jobs. For the other 70%, there will be little or no assistance.
With every day of unemployment, your chances of getting stuck there increase, and other associated problems start to appear, such as poor mental and physical health. The 70% who are parked will go on to cost far more, in basic benefits as well as across a whole range of other public services.With every day of unemployment, your chances of getting stuck there increase, and other associated problems start to appear, such as poor mental and physical health. The 70% who are parked will go on to cost far more, in basic benefits as well as across a whole range of other public services.
It is to be hoped that the lessons emerging from the Work Programme will be heard loud and clear in the Ministry of Justice, where the former employment minister Chris Grayling is now justice secretary. It is his stated intent to apply to probation what he did at the DWP, where he introduced the payment-by-results Work Programme. I'm not sure what creaming and parking will look like when applied to ex-offenders leaving prison on probation orders.It is to be hoped that the lessons emerging from the Work Programme will be heard loud and clear in the Ministry of Justice, where the former employment minister Chris Grayling is now justice secretary. It is his stated intent to apply to probation what he did at the DWP, where he introduced the payment-by-results Work Programme. I'm not sure what creaming and parking will look like when applied to ex-offenders leaving prison on probation orders.
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