Promoting social inclusion in the labour market

Policy guides

Work Programme

The Work Programme aims to deliver flexible support to help long-term claimants of Jobseeker’s Allowance and some claimants of Employment and Support Allowance to move into sustainable jobs. It has been in place since the summer of 2011.

Under the Work Programme, Providers (or ‘Primes’) from the private, public and voluntary/ community sectors have taken on results-based contracts on behalf of The Department for Work and Pensions. Primes then manage networks of sub-contractors who deliver some or all of the employment support services on their behalf. 

Claimant eligibility for the Work Programme is set by the Department for Work and Pensions and managed by Jobcentre Plus. Primes are paid for “job outcomes” (defined as employment of thirteen or twenty six weeks, depending on the group) and job sustainment (for each additional four weeks of employment), with a small amount paid up-front for each participant on the programme.

 Background

Alongside the Universal Credit, the Work Programme is central to the Coalition government’s plans to reform welfare and increase employment. It is the single largest employment programme ever contracted, replacing a number of separate welfare-to-work programmes – in particular the New Deal and Flexible New Deal (which supported long-term unemployed jobseekers), and Pathways to Work (which supported those on incapacity benefits and Employment and Support Allowance). By bringing support for these groups within a single programme, the Government hopes both to realise greater efficiencies and economies of scale, and to encourage a more joined-up approach, based on the individual rather than their benefit.

The Work Programme is “black box” – this means that the programme itself does not prescribe specific interventions or activities that each provider must deliver. However, providers are required to deliver what they said that they would – and as part of their contracts, they have each set out their proposed approach – including how claimants would be supported and which sub-contractors they would work with.

Further Information

There are 40 Work Programme contracts in total across 18 “Contract Package Areas” covering Great Britain. Each contract is worth between £10 to 50 million a year. Each contract area has at least two providers, with claimants referred randomly between them. Over time, the Programme allows for more claimants to be referred to better-performing providers. Each contract is for five years of referrals to the Work Programme (i.e. claimants being referred from 2011 to 2016), so the last claimants will leave the Work Programme in 2018. 90% of Primes are from the private sector. For a full list of Providers and contacts see the Work Programme DWP website page. For 8% of contracts, providers were not previously delivering services in the welfare-to-work area.

Organisations sub-contracted through Primes can publish their experiences of working for primes on the Merlin web-portal. This web portal also offers opportunities for primes and sub-contractors to build contacts with one another and for sub-contractors to raise complaints or grievances.

Analysis by Inclusion has estimated that 43% of support for Work Programme participants will be “self delivered” by Primes, with the remaining 57% delivered by sub-contractors. Inclusion estimates that around 20% will be delivered by sub-contractors in the voluntary and community sector. If this is the case, then this would likely be a reduction in the market share of the voluntary and community sector – which was estimated to account for around 30% of the welfare-to-work market in the late 2000s (source: Third Sector Task Force, 2009).

Primes are paid by DWP in four ways:

  • Attachment fees: To help with initial service delivery costs, when a claimants joins the Programme. This payment will gradually reduce over the first three years of the contracts and stop by the fourth year.
  • Job outcome fees: Rewards for getting people into work and keeping them there for three or six months (depending on the customer group).
  • Sustainment fees: Paid on a four-weekly basis after the job outcome fees, for each four weeks of employment. The maximum amount of these payments differs between customer groups.
  • Incentive payments: There will be additional job outcome payments for the highest-performing providers.

The maximum amount that providers can earn for supporting someone into work (and keeping them there for around eighteen months over two years) varies from £4,000 to over £13,000 depending on the "customer group”.

The eight “customer groups” for the Work Programme are set out below (with the maximum amount that can be paid in each case – usually for employment of eighteen months out of two years):

  • Jobseekers aged 18-24 who have been claiming JSA for 9 months (£3,810)
  • Jobseekers aged 25 or over who have been claiming JSA for a year (£4,395)
  • Jobseekers with significant disadvantage (for example young people previously not in education, employment or training) who can volunteer to be referred after three months on JSA (£6,600)
  • Jobseekers Allowance (JSA) claimants who had previously claimed Incapacity Benefit (IB) and have been claiming JSA for 3 months (£6,600)
  • Employment and Support Allowance (ESA) customers within the “Work Related Activity Group” who are expected to be fit for work within 3 months (£6,500)
  • Any ESA claimants who volunteer to join the Work Programme (£3,700)
  • ESA claimants who had previously been claiming incapacity benefits and who volunteer for the Work Programme (£13,720)
  • Any IB and Income Support claimants who volunteer to join the Work Programme - only in England and only for the first three years (£3,865)

It is estimated that over the five years, 3.2 million people will start the Work Programme, with 1.5 million on the Programme at its peak.

Recent Developments (February and March 2012)

  • 16 March: The Labour Party pledged that it would offer six months of work to 100,000 18 to 24 year olds who had been out of work for a year, by using £600 miliion raised from a bankers' bonus tax. This policy is called the 'Jobs Guarantee'. Read more here.
  • 15 March: Launch day of the Merlin Standard Assessment and Accreditation Service. The Merlin Standard is intended to promote sustainable and positive partnerships between supply chains and primes. Read more here.
  • 6 March: It was anoounced that prisoners leaving jail who then claim Jobseeker's Allowance are to join the Work Programme immediately upon release. Read more here.
  • 22 February: The fraud enquiry at A4e was revealed which has created huge public outrage directed at the Work Programme. Read more here.

 Commentary

The Centre for Economic and Social Inclusion response

Inclusion’s responses to the Work Programme focused upon:

  • Quality of services offered
  • Whether the most disadvantaged receive adequate support
  • Whether it can respond to needs of specific localities
  • The role of the voluntary sector in sub-contracted services

http://www.cesi.org.uk/node/208

http://www.cesi.org.uk/sites/default/files/response_downloads/perform_or_bust.pdf

http://www.cesi.org.uk/sites/default/files/response_downloads/work_programme_succeed.pdf

More recently, Inclusion has argued that downgrades to growth forecasts since the Work Programme was launched will make it harder for providers to hit their targets – estimating that the new growth forecasts will lead to around 8% fewer job entries at the minimum performance levels.

Association of Chief Executives of Voluntary Organisations (ACEVO)

ACEVO have argued third sector involvement in the Work Programme is vital to reduce unemployment. A Third Sector Work Programme Survey from late August/ early September found that only 8% of third sector organisations felt the Work Programme would meet targets. Also, ACEVO found that only 38% of sub-contractors surveyed had signed contracts for their provision.

http://www.acevo.org.uk/document.doc?id=1730

The Guardian: Patrick Butler

Patrick Butler, editor of society, health and education policy for The Guardian, has argued that under the Work Programme some claimants may not be receiving the support that they need. This is because few primes in practice appeared to be calling on specialist voluntary sector organisations that have in the past delivered results. In addition, Butler has reported that Work Programme providers are referring claimants to volunteer centres without paying the centres for the support that they provide.

http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2011/nov/07/work-programme-not-working-for-young-people

http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2011/nov/10/work-programme-charities-working-for-free

Social Market Foundation

The SMF’s ‘Vicious Cycles’ publication from 2009 arguably helped to influence the design of the Work Programme. SMF however, has been concerned that the Programme may be under-funded, and that the minimum performance expectations are too high, being based upon highest targets that were ever achieved under the Flexible New Deal programme.

http://www.smf.co.uk/will-the-work-programme-work.html