Iain Duncan Smith, Secretary of State for Work and Pensions, has struggled to implement his grand ideas
Show Hide image

Welfare-to-work firms are being paid five times over for a job half done

The coalition has struggled to implement its Work Programme. Labour needs to ensure its latest ideas don't go awry if they make it into government.

A report out this week has highlighted the problem with high-minded political reviews, like the one Labour published to much fanfare on Tuesday.

The National Audit Office, the apolitical body responsible for scrutinising government spending, has investigated the government’s Work Programme – its flagship scheme to help the unemployed into work.

It shows three things. First, it’s underperforming.

The government’s estimates have proved as over-optimistic as they appeared when the programme was launched in 2011. One of the most important measures of its success is how well it has helped the “hardest-to-help” into work.  If a claimant holds a job for at least three months they are deemed a success.

The government forecast more than 1 in 5 claimants would be helped back into work. The firms that won the contracts to help them were even more optimistic – suggesting nearly 1 in 4 would be successfully retrained.

Instead, just 1 in 9 of them have been. This is not surprising. It is in line with the success of comparable programs, such as Labour’s Flexible New Deal. The department, no longer buoyed by the grand promises of new governments, have belatedly reduced their expectations. They now expect around 1 in 8 to find work – half as many as the firms charged with delivering the contract pledged to achieve.

Despite this lack of success, these firms are now spending less than half as much as they committed to on the “hardest-to-help” job-seekers. They offered to spend £1,360 per person when they bid; they are now spending just £630.

One of the main reasons the firms have used to justify this – according to the NAO report – appears counter-intuitive:

“The introduction of participants that are further from employment has allowed greater use of group work or ‘lighter touch’, less frequent contact which can be more appropriate to their needs.”

You might have expected those struggling the most would be helped the most, with targeted one-to-one help and extra funding. Instead, it is those classified as “easier-to-help” who are actually receiving more money – nearly 40 per cent more. It seems the Work Programme has done little to change the culture of job centres under Labour, as documented in 2009 by Channel 4’s Benefit Busters.

At least, you might hope, these firms – who have retrained less than half as many of the hardest-to-help as they forecast, and are spending less than half as much on them as they agreed – would have faced the consequences of their failures.

But, as usual, they are still being well-paid – regardless of performance. They are entitled to £31m in incentive payments for 2014-15. The NAO estimate they would be paid £6m "using an accurate measure of performance".

Moreover, the difficulties of tracking how long workers keep their jobs has already cost the government £11m, and is set to cost it another £25m by 2016.

Margaret Hodge, the Chair of the parliamentary committee which takes up NAO reports, launched a familiar attack on the findings, arguing the government should be able to “force contractors to spend more" and stop paying "bonuses to all of its contractors despite their poor performance".

These are problems which her committee has been struggling against throughout this parliament – and which no government seems capable of solving.

They also show the limits of the grand policy announcements and thoughtful speeches currently exciting debate in Parliament. Without vision politics doesn’t inspire. Every political leader offers one – David Cameron ran on the ‘Big Society’ and Ed Miliband has called for ‘One Nation’. But without the ability to implement ideas, great plans often end up being little more than noble intentions.

The growth review published this week by the Labour Party was a thoughtful year-long study. The substance of its two dozen recommendations were scarcely criticised – although a key statistic was – and its calls for growth across the country echo George Osborne’s recent promise to create a ‘Northern powerhouse’.

It also talked specifically of the need to fix government contracting. But there is no simple solution. The Coalition has already tried to ensure more contracts go to small firms. The failures of the Work Programme show how much more there is to do.

Everyone wants the state to be become ‘smarter and more entrepreneurial’, ‘facilitate innovation’, and ‘radically improve’, as the review suggests. It offered engaging ideas – like more technical colleges and a ‘Teach Next’ scheme to complement the success of Teach First – but the question is how any government actually creates change.

The man behind the report, Andrew Adonis, has proved himself among the most capable operators in government – he spent a decade thinking up and driving through the academy system that now accounts for more than half of British schools.

We should react to his report by explaining how such ideas might be made possible – and learning from the perennial problems exposed by the committee who deal with government’s failures.

 

This is a preview of May2015.com, an affiliated site launching later this year. You can find us on Twitter.

 

Harry Lambert was the editor of May2015, the New Statesman's election website.

Getty
Show Hide image

Not since the Thatcher years have so many Tory MPs been so motivated by self-interest

Assured of an election win, backbenchers are thinking either advancing up the greasy pole, or mounting it for the first time. 

One hears despair from Labour not just about probable defeat, but from MPs who felt they had three years to improve the party’s fortunes, or to prepare for personal oblivion. In the Conservative Party, matters seem quite the opposite. Veterans of the 1983 election recall something similar: a campaign fought in the absolute certainty of winning. Theresa May talked of putting the interests of the country first when she engineered the poll, and one must believe she was sincere. However, for those expecting to be Tory MPs after 8 June there are other priorities. Theirs is not a fight for the national interest, because that for them is a foregone conclusion. It is about their self-interest: either advancing up the greasy pole, or mounting it for the first time. They contemplate years ahead in which to consolidate their position and, eventually, to shape the tone and direction of the party.

The luxury of such thoughts during a campaign comes only when victory is assured. In 1983 I worked for a cabinet minister and toured marginal seats with him. Several candidates we met – most of whom won – made it clear privately that however important it was to serve their constituents, and however urgent to save the country from the threats within what the late Gerald Kaufman later called “the longest suicide note in history”, there was another issue: securing their place in the Thatcher revolution. Certain they and their party would be elected in the aftermath of the Falklands War, they wanted their snout in the trough.

These are early days, but some conver­sations with those heading for the next House of Commons echo the sentiments of 1983. The contemporary suicide note has not appeared, but is keenly awaited. Tories profess to take less notice of opinion polls than they once did – and with good reason, given the events of 2015 and 2016 – but ­imagine their party governing with a huge majority, giving them a golden opportunity to advance themselves.

Labour promises to change the country; the Liberal Democrats promise to force a reconsideration of Brexit; Ukip ­promises to ban the burqa; but the Tories believe power is theirs without the need for elaborate promises, or putting any case other than that they are none of the above. Thus each man and woman can think more about what the probability of four or five further years in the Commons means to them. This may seem in poor taste, but that is human nature for you, and it was last seen in the Labour Party in about 2001.

Even though this cabinet has been in place only since last July, some Tory MPs feel it was never more than an interim arrangement, and that some of its incumbents have underperformed. They expect vacancies and chances for ministers of state to move up. Theresa May strove to make her team more diverse, so it is unfortunate that the two ministers most frequently named by fellow Tories as underachievers represent that diversity – Liz Truss, the Lord Chancellor, who colleagues increasingly claim has lost the confidence of the judiciary and of the legal profession along with their own; and Sajid Javid, the Communities Secretary, whom a formerly sympathetic backbencher recently described to me as having been “a non-event” in his present job.

Chris Grayling, the Transport Secretary, was lucky to survive his own stint as lord chancellor – a post that must surely revert to a qualified lawyer, with Dominic Grieve spoken of in that context, even though, like all ardent Remainers in the government, he would be expected to follow the Brexit line – and the knives are out for him again, mainly over Southern Rail but also HS2. David Gauke, the Chief Secretary to the Treasury, and the little-known Ben Gummer, a Cabinet Office minister, are tipped for promotion with Grieve if vacancies arise: that all three are white men may, or may not, be a consideration.

Two other white men are also not held in high regard by colleagues but may be harder to move: Boris Johnson, whose conduct of the Foreign Office is living down to expectations, and Michael Fallon, whose imitation of the Vicar of Bray over Brexit – first he was for it, then he was against it, and now he is for it again – has not impressed his peers, though Mrs May considers him useful as a media performer. There is also the minor point that Fallon, the Defence Secretary, is viewed as a poor advocate for the armed forces and their needs at a time when the world can hardly be called a safe place.

The critical indicator of how far personal ambition now shapes the parliamentary Tory party is how many have “done a Fallon” – ministers, or aspirant ministers, who fervently followed David Cameron in advising of the apocalyptic results of Brexit, but who now support Theresa May (who is also, of course, a reformed Remainer). Yet, paradoxically, the trouble Daniel Hannan, an arch-Brexiteer and MEP, has had in trying to win selection to stand in Aldershot – thanks to a Central Office intervention – is said to be because the party wants no one with a “profile” on Europe to be added to the mix, in an apparent attempt to prevent adding fuel to the fire of intra-party dissent. This may appease a small hard core of pro-Remain MPs – such as Anna Soubry, who has sufficient talent to sit in the cabinet – who stick to their principles; but others are all Brexiteers now.

So if you seek an early flavour of the next Conservative administration, it is right before you: one powering on to Brexit, not only because that is what the country voted for, but because that is the orthodoxy those who wish to be ministers must devotedly follow. And though dissent will grow, few of talent wish to emulate Soubry, sitting out the years ahead as backbenchers while their intellectual and moral inferiors prosper.

Simon Heffer is a columnist for the Daily and Sunday Telegraphs

Simon Heffer is a journalist, author and political commentator, who has worked for long stretches at the Daily Telegraph and the Daily Mail. He has written biographies of Thomas Carlyle, Ralph Vaughan Williams and Enoch Powell, and reviews and writes on politics for the New Statesman

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

0800 7318496