By a Newsnet reporter
Christina McKelvie MSP is pressing the UK Department of Work and Pensions to publish the results so far of its Work Programme, after a National Audit Office (NAO) report suggested the private companies who were handed the contracts to run the programme are falling well short of their job creation targets.
Ms McKelvie, SNP MSP for Hamilton, Larkhall and Stonehouse, has sent a Freedom of Information request to find out more about the Work Programme which is intended to help long-term unemployed people back into the workplace.
When it was established last year, the Conservative-led Westminster government handed the contract to run the Scottish programme to private companies with no record of job creation in Scotland, shutting out social enterprises and third sector organisations.
The National Audit Office report estimates that only 26 per cent of people going through the programme are going into work, well below the UK government’s target of 40%. The NAO was unable to provide a fully accurate estimate because the DWP refuses to publish the results of the Work Programme so far.
Critics such as Iain Mulheirn of the Social Market Foundation have warned that the Department of Work and Pensions massive overestimate of performance targets has put Work Programme providers and their charity subcontractors in a very risky position. Should the findings of the NAO report be borne out, the only solution for these providers will be to cut services in order to save money.
The NAO report also described the possibility that some programme providers will “cut corners to stay in profit” by ignoring harder-to-reach people and people with multiple social problems. The report also warned that some of the programme providers could get into “serious financial difficulty” while trying to meet the ambitious targets imposed on them by the Department of Work and Pensions.
Mr Mulheirn noted: “The average provider may have to slash their spending by something like a third before they become profitable. The alternative is failure for them and their supply chain. What impact an effective one-third cut in funding will do to service quality is anyone’s guess, but the impact on subcontractors won’t be pretty.”
The Minister of State for the Department of Work and Pensions, Conservative MP Chris Grayling, attempted to brush off the report, and claimed that it was based on “guesswork”, saying: “I’m really disappointed that the NAO is producing a report which is partially based on guesswork, when it’s private companies and not taxpayers who are carrying the risks.”
He added that the the system of payment by results was “a totally new approach” whose success could not “be assessed in the same old ways”.
Ms McKelvie said: “When the UK government handed out the Work Programme contracts last year, they claimed that private enterprise would be the panacea for helping the long-term unemployed. The National Audit Office report suggests that this is very far from the case.
“Ingeus and Working Links were given the contracts, despite having no record of job creation in Scotland, while Scottish social enterprises with a proven record – such as the Wise Group, which got 5,300 people into work in 2010 – were shut out of the process. For the sake of unemployed people and for our economy, we need the Work Programme to be effective, but it turns out that is not the case.
“Chris Grayling has tried to trash the NAO report – yet he refuses to publish the figures himself. If the target is 40% and they are only reaching 26% why is that? The UK government has questions to answer: these private organisations were never checked for proof of success and failed to run any pilots to justify the targets they set.”