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25 January 2011

The coalition’s flagship work programme looks to be in danger of sinking before it is even launched in the summer.  Within days of the back to work industry’s trade body warning that the scheme may not be financially viable,  one major provider has already pulled out, whilst many others are declining to put in bids for regions they think it will be hardest to make money in.

The Association of Learning Providers warned last week that many of its members were becoming increasingly uncertain about participating in the coalitions massive new back-to-work programme, even though they ca make up to £14,000 for getting hard to help claimants into sustained employment.  The uncertain state of the economy combined the high level of results required to make big profits are thought to be putting many companies off.

Following the warning, Australian back-to-work provider Sarino Russo Job Access has announced that it will not be bidding for contracts in any of the three regions - West Midlands, London and the South East – in which it has been designated a potential prime provider.  It will now only be willing to work for other agencies as a subcontractor, thus avoiding much of the risk faced by prime providers.

Many other companies are now quietly declining to put in bids for areas of the country in which they think they are least likely to make big profits.  Avanta, Reed and Seetec, for example,  have all pulled out of the West Midlands.

It now seems very likely that, if the work programme goes ahead at all under the current terms, it will go ahead with a greatly diminished number of private sector companies participating.  The wisdom of voluntary sector organisations such as Mind and Mencap being so keen to get involved may also now come under further scrutiny