Employment: Work Programme

Lord Freud Excerpts

Wednesday 29th February 2012 Lords Chamber

[Lord McKenzie of Luton]

To ask Her Majesty’s Government what progress is being made by the Work Programme in assisting benefit claimants to find employment.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the Work Programme provides personalised support for the long-term unemployed and those at risk of long-term unemployment. By the end of October 2011, 332,000 people were already receiving this support. We will publish the first statistics on job outcomes in the autumn.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his reply. As the recent NAO report made clear, the Work Programme has been bedevilled by the speed of its introduction, which included a lack of piloting, going live before the IT was in place, and compiling the business case after the decision to proceed. Perhaps this is why the Government are a little coy about releasing data, although such relevant data as we have show that benefit off-flow rates are down, not up; that referrals to the Work Programme include only a trickle of the hardest to help; and the haemorrhaging of voluntary and community sector providers. Will the Government now at least permit providers to publish their own performance data and, under the Government’s own data work programme, arrange for the publication of user satisfaction information?

[Lord Freud]

My Lords, I must point out that the NAO acknowledged that the Work Programme addressed significant weaknesses of previous programmes; that key elements within it improved affordability and drove value for money; and that it was a significant achievement to introduce it in a year. It is expected to help more people more effectively and for less money than previous programmes. As for information, ERSA has put out some information about what happened to the first cohort. It said that people got into jobs at a rate of between 18 per cent and 23 per cent, which was more or less in line with the expectations of the industry.

[Lord German]

My Lords, up and down the country there are third sector and charitable organisations supporting the Government in delivering this Work Programme as subcontractors. However, the National Audit Office report shows that many of these subcontractors are concerned about the way they are being treated by the prime contractors, and recommends that the Government should institute a programme of spot checks to ensure that they are fulfilling the standards which I know the Government have put in place. Can my noble friend tell me whether these spot checks have taken place yet, and if not, when are they likely to take place, and will he report to the House?

--- Later in debate ---

[Lord Freud]

My Lords, we monitor very closely what is happening within each of the prime provider contracts, and we have introduced—I think for the first time by any Government, in this country certainly—a process where the prime providers look after their supply chains, which we call the Merlin Standard. That is the main protection for subcontractors to make sure they are treated appropriately.

[Baroness Sherlock]

My Lords, when travelling the country with the Riots Communities and Victims Panel, a frequent complaint was that the Work Programme did not have any subregional targets. For example, if you had a couple of wards with very bad unemployment, which could potentially be a reason for future disturbances, a contractor could actually meet all its targets by cherry picking people from other areas who were easier to move into work, and leaving that area untouched. Can the Minister tell the House what the Government are doing about that?

[Lord Freud]

My Lords, the way that we are trying to reduce the cherry picking, which has been natural in all of the programmes that have been introduced, is to try to fine-tune the financing so that providers are incentivised to help the hardest to help. That is why providers can earn up to £14,000 to help the very hardest to help. If we see problems developing, in that we have not priced accurately, we will need to look at pricing structures, because that is the way to solve the problem.

[Lord Knight of Weymouth]

My Lords, the Department for Work and Pensions says that, of those referred on to the Work Programme—those unemployed for more than 12 months—30 per cent would get a job anyway, regardless of any intervention. I gather that the minimum contract performance on the Work Programme is to get 33 per cent into work. Therefore, for a difference of only 3 per cent, they can start making a profit. Is it not therefore vital that there is full disclosure region by region or contractor by contractor in real time—that is what is wanted from employers for universal credit—so that we can make sure that those contractors are doing a lot better than a paltry 3 per cent?

[Lord Freud]

My Lords, this is designed so that people are investing their own money, which they will get back when they start making a return above what would have happened anyway—that is, in the jargon, above the dead weight. We will produce statistics to national statistics standards. Clearly, we can do that only once we can see some results. This is a long-term programme in the sense that you start getting rewards, even your first reward, possibly only after six months of that person being in work. Then you start getting further rewarded as you keep the people in work. The first time we think that it is sensible to have national statistics is around the autumn. That is what that process has come up with. I assure the noble Lord that I am looking forward a lot to showing noble Lords what those figures say. From what I am hearing anecdotally, I think that I shall be feeling very smug at that point.

[Lord McKenzie of Luton]

My Lords, perhaps I may ask the Minister to answer the question I posed. Will the Government now permit providers to publish their own performance data?

[Lord Freud]

My Lords, I thought that I had made that clear. Some performance data have been put out by ERSA. We are discussing with ERSA what kind of performance data it can put out. Clearly, we have to be careful that the information that goes out from the providers cannot undermine what the national statistics will say. That is the issue.