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Chris Grayling “really disappointed” at NAO report

The National Audit Office (NAO) has released a less than glowing report on the achievements and future of the Work Programme. In particular, it states the government has overestimated the number of people to be helped return to employment.

The National Audit Office report said 26% of over-25s would get jobs, compared with the official estimate of 40%.

The report also described the possibility that some programme providers will “cut corners to stay in profit” by ignoring harder-to-reach people. Additionally, some of the programme providers could get into “serious financial difficulty” while trying to meet their ambitious targets.

Chris Grayling said payment by results was “a totally new approach” and its success could not “be assessed in the same old ways”.

“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.

“Unlike the last government’s welfare to work schemes, we only pay when companies succeed in getting the long-term unemployed into sustained employment.”

Read the full report “The Introduction of the Work Programme”

Click here to read the response of a DWP spokesperson

Amanda Frewin

Research & Project Support

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PRESS RELEASE

FOR IMMEDIATE RELEASE

 

23 January 2012

Welfare to work providers respond to National Audit Office report on Work Programme procurement

The Employment Related Services Association (ERSA), the trade association for the welfare to work industry, today comments on the findings of the National Audit Office (NAO) report into the procurement of the Work Programme (released 24 January 2012).    ERSA welcomes the focus of the National Audit Office on referral numbers and type.  However, it believes that the NAO’s conclusions in relation to likely performance levels are premature. 

In particular, ERSA highlights the following points in response to the report.

  • The rapid procurement and implementation timetable of the Work Programme was met by the welfare to work industry, with a great deal achieved over a short time.   Undoubtedly, the process of transition from previous welfare to work programmes to the Work Programme was difficult for many providers, with largescale TUPE transfers taking place across the sector.  This has necessitated industry-wide collaboration, which has been to the benefit of customers.
  • ERSA does not recognise the performance levels anticipated by the National Audit Office.  These appear to be speculative and not based on performance information.   ERSA believes that it is too early to draw any conclusions on likely performance levels across the life of the contracts.  Providers are working hard to achieve the best possible performance levels for all customers and early indications of job entry levels are in line with expectations.
  • Clearly, however, the economic backdrop has worsened since providers submitted tenders in spring 2011.  In particular, regional variations in economic outlook may have an impact on performance levels over the next two to three years.  ERSA will therefore track the UK’s economic performance very carefully and is ready to help facilitate dialogue with the Department for Work and Pensions if this were to become necessary.   ERSA does not believe that this is the case at present.
  • ERSA welcomes the recognition by the National Audit Office of the problems faced by the industry of the lower than expected level of customers on Employment and Support Allowance (ESA).  ERSA believes that this is currently the number one problem that the government needs to solve.  Low level of ESA referrals have disproportionate affects on voluntary and community sector providers, as this sector disproportionately provides the specialist support many of these customers need.

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  • ERSA regrets any suggestion that providers will act unethically in the delivery of services.  ERSA members are asked to sign up to a code of conduct, while all providers are subject to the Merlin standards of responsible supply chain management.  In addition, the sector is introducing its own set of qualifications and is setting up a dedicated professional institute to ensure the very highest quality standards across the entirety of the industry.

Speaking in response to the NAO report, ERSA chief executive, Kirsty McHugh said:

‘The welfare to work industry welcomed the ambition of the Work Programme, believing that its design and scale will help to facilitate high quality support to jobseekers.   Providers have achieved a great deal in implementing the programme over a short period of time.    We welcome the focus by the NAO on the need to increase the number of ESA referrals to the Work Programme, but do not recognise the performance figures in the report. 

‘Clearly, however, the worsening economic backdrop must be taken into account and therefore the industry will require a strong partnership with the Department for Work and Pensions to ensure that the Work Programme delivers for the benefit of all customers. ‘

Ends

Notes to Editors

 

ERSA is the trade association for the welfare to work industry. Established in 2005, by the industry for the industy, it exists to help members achieve their shared goal – to help people achieve sustainable work.  ERSA’s membership ranges from large multinational corporations to small specialist charities. It represents over 90 percent of those organisations that have been awarded prime contracts for the Work Programme. Approximately half its members are third sector organisations.

Press enquiries should be directed to Philip Curry at philip.curry@ersa.org.uk or 07919622053.

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