Work Programme

Esther McVey Excerpts

Thursday 6th March 2014 Written Statements

[The Minister of State, Department for Work and Pensions (Esther McVey)]

Having now helped 444,000 people into jobs and 208,000 into lasting work, the Work programme is succeeding—transforming the lives of those furthest from the labour market, who are the hardest to help into employment. The performance of providers since the Work programme’s first year of operation has significantly improved. As planned, these providers are being paid for getting people into work and keeping them there; a real change in the whole culture of how welfare-to-work schemes operate. Now, the positive signs are clear to see: there are fewer people on jobseeker’s allowance than when the Work programme started, and this quarter marked a sizeable fall of 45,000 in long-term unemployment.

Our aim from the start was always that the Work programme should allow for continuous improvement. By its very design, the Work programme was intended to create a competitive market. Providers are paid by results—transferring financial risk to providers and protecting the taxpayer, unlike previous schemes where vast amounts were paid out up front regardless of success. What is more, for the first time unlike other programmes, through levers such as market share shift and contract termination, we are able to actively manage this market place. Since August last year, the Department for Work and Pensions has been rewarding success by referring more claimants to the better performing providers. At the same time, the structure of the Work programme is intended to push out poorer performing providers.

It is now the right time to focus on those contracts which are not doing as well as their competitors. While all contracts are on track to hit their contractual JSA targets, there is significant variation in performance. Accepting only the best for claimants, I have reviewed the performance of the bottom 25% of contracts against a range of performance measures. As a result, the providers delivering these contracts have been put under an enhanced performance management regime, driving them to up their game further.

Following this review, I have also decided to terminate one contract—the lowest performing when assessed against this range of measures. Today I have issued a notice of termination to Newcastle College Group in respect of their contract for the provision of Work programme services in north-east Yorkshire and the Humber. The notice of termination has been issued under the voluntary break clause in the contract and not for any breach of contract by Newcastle College Group.

Following the contract termination, no individual on the Work programme will be left without support. Not only do other providers operate as competitors in the area already, but Newcastle College Group are required to operate within the terms of their contract while the Department appoints a replacement provider within the next 12 months. To ensure continuity of service for those currently on the Work programme in the region, before making that appointment, we will rigorously assess bids to determine who can best deliver the quality of service and results we require. The Department will also support the provider’s supply chain during the transition of services to the replacement provider.

What we have initiated here is a continuous process of evaluation and improvement, with rewards for success and consequences for failure. To this end, other providers who deliver low levels of performance and fail to improve will be considered for further action including the termination of their contract. For the first time, a Government employment programme is harnessing the disciplines of the market place so that only those providers who succeed are retained to help claimants into work. In doing so, we can deliver on our goal to ensure claimants get the best possible service and achieve the best possible outcomes from the Work programme.