The Public Accounts Committee has today found that the Work programme is failing employment and support allowance (ESA) claimants, with only 10% moving into work. Work programme providers are spending less than half the amount they promised they would on ESA claimants as they focus on easier money. Instead, the private sector seems much more ready to sanction ESA claimants than help them, with Seetec being the most likely to refer claimants fo a sanction.
The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:
"The Department has not succeeded in incentivising Work Programme providers to support harder-to-help claimants into work. Almost 90% of Employment and Support Allowance claimants on the Work Programme have not moved into jobs.
Evidence shows that differential payments have not stopped contractors from focusing on easier-to-help individuals and parking harder-to-help claimants, often those with a range of disabilities including mental health challenges.
Data from Work Programme providers shows that they are, on average, spending less than half what they originally promised on these harder to help groups.
It is a scandal that some of those in greatest need of support are not getting the help they need to get them back to work and are instead being parked by providers because their case is deemed just too hard.
The Department must do more to encourage providers to work with harder-to-help groups by tackling poorly performing prime contractors and sharing information on what works.
It should also collect and publish information from each provider on how much they are spending on different payment groups.
We are also concerned about how the Department’s sanctions regime is operating. Sanctions can cause significant financial hardship to individuals, and it is not clear whether the sanctions regime actually works in encouraging people on the Work Programme to engage with the support offered by providers.
Feedback from some constituents suggests that the number of sanctions has been increasing and that some providers have been recommending sanctions more than others. The Department confirmed that Seetec has referred more claimants for sanction than other providers.
The Department should monitor whether providers are making the right sanction referrals to the Department and that they are not causing unfair hardship. It should publish the number of sanctions by provider.
The Department has designed the contracts with providers in a way which exposes the taxpayer financially.
Underperforming providers may still be able to claim bonus payments for 2014-15 because of the flawed performance measure whereby the fewer clients referred to a provider, the better their performance looks. This may include Newcastle College Group whose contract has been terminated.
The Department must make every attempt to claw back the estimated £11 million of inappropriate payments.
After a slow start, performance of the Work Programme is improving, but there is still a long way to go before it is working effectively for all."