Work Programme - 1m fewer people targeted

Mon, 16/07/2012 - 12:19 -- nick

The government's flagship employment scheme is facing an "almighty mess", Labour has said, after a revision of official forecasts showed 1 million fewer people would be eligible.

In the latest blow to the work programme, in which companies are paid by results to find work for the long-term unemployed, the government has almost halved the number of people expected to use the scheme. There are now fears that people hired to find work for the unemployed could in turn lose their jobs.

Liam Byrne, the shadow work and pensions secretary, said: "Chaos is engulfing the government's flagship back-to-work scheme. Unemployment is at a 16-year high and yet welfare to work now appears to be in the hands of the Keystone Cops."

The government disclosed in May that 1.4 million people would be eligible for the scheme, rather than the 2.6 million forecast in December. This represents a 43% fall in the number of people expected to go through the work programme between now and 2015-16.

Government sources acknowledged there was a surprising spike last December in projections by the Office for Budget Responsibility of the number of people who would apply for jobseeker's allowance. The OBR, the government's independent economic forecaster, has repeatedly revised downwards its forecasts for economic growth.

A spokesman for the Department of Work and Pensions said it was misleading to compare the forecasts for the work programme in December and May because those claiming employment support allowance were not included in the lower set of figures.

The latest disclosure follows a series of hiccups in the work programme, which is one of the key elements of the government's welfare reforms. The National Audit Office recently criticised the DWP for adopting an "overly optimistic" target of ensuring that 36% of participants find long-term work. It said about 26% would do so.

Byrne warned that the latest figures from the DWP, which were placed in the House of Commons library, showed the work programme was in deep trouble. He said: "The work programme is now so badly managed that we face the prospect of welfare-to-work staff being laid off in the middle of an unemployment emergency, as providers are forced to shed the staff they took on when they thought the government had the slightest idea what it was doing.

"Ministers have got into one almighty mess over their back-to-work programme and the result is there for all to see: a generation out of work and a government department totally unable to cope."

Kirsty McHugh, chief executive of the Employment Related Services Association, said: "How can anybody run a business under those circumstances? You need accuracy of forecasting. The finances of the work programme are extremely tight anyway. The state of the economy has had a knock-on effect in terms of how many people they have been able to get into jobs. The last thing they needed were inaccurate forecasts on top of that.

"So it is very difficult for the prime contractors to do their job and it has an impact on their finances. It has an impact on the subcontractors, many of whom had taken on additional staff to manage these increased volumes. They are now left holding the baby. What do they do? Let the staff go and incur costs or keep them on? There is a question mark. What is accurate? Is December accurate, is June accurate? What can we believe?"

A DWP spokesperson said: "It is simply misleading to compare these figures from December 2011 and May 2012 as hundreds of thousands of employment support allowance claimants are not included in the more recent projections. Our data shows the work programme has had a promising start, with nearly a quarter of the early starters spending at least three months off benefits."

Chris Grayling, the employment minister, said last week that the work programme was working. He said figures showed that of 28,600 people on the scheme in June 2011, 7,000 had had "a continuous 13-week break" in benefit claims nine months later. This works out at 24%.

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