10.06.11

Work Programme Roll-out Begins

The national roll-out of the Work Programme has now begun. Described by the Government as “the centrepiece of the most sweeping welfare reform for 60 years”, it aims to take one million people off benefits and into jobs over the next two years, with a further one and half million in the tree years that follow. 

The programme replaces employment support currently on offer including the New Deals, Employment Zones and Pathways to Work.

Eighteen prime providers, mostly private companies, have won 40 prime contracts in 18 different ‘lots’ (areas) covering England, Scotland and Wales.  They, and the networks of subcontractors they have set-up, will be paid for each person they manage to get into employment. The programme will be worth £3-5 billion to providers over the next seven years and they are being encouraged to innovate and design support based on the needs of jobseekers and local labour markets.

The contracts will be run on a payment-by-results basis, paid partly through the benefit savings made from the people they help get back to work – the first time such an approach has been tried in this country.

Only 10 per cent of the contract money will be paid up front. The next point at which the providers will see any money is after a jobseeker has been in work for six months. To gain the maximum amount they will have to keep those from the  ‘hardest to help’ groups in work for up to two years. 

Payments will range from about £2,200 for getting a young person into work up to almost £14,000 for the hardest to help who have come off sickness benefits.

The payment by results approach means that the providers will be taking much of the risk.  They are expected to invest around £580 million over the next few years and there are fears that if they fail to hit their targets for the number of people they can get back into, and sustain in work, that some of them will go under. 

Ministers say they recognise this potential problem, which is why they have appointed either two or three prime contractors in each of the programme areas.  

Read TAEN’s press release..

 

 

 

 

 

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