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

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Will the collapse of the EU/Canada trade deal speed the demise of Jean-Claude Juncker?

The embattled European Comission President has already survived the migrant crisis and Brexit.

Jean-Claude Juncker, the embattled President of the European Commission, is likely to come under renewed pressure to resign later this week now that the Belgian region of Wallonia has likely scuppered the EU’s flagship trade deal with Canada.

The rebellious Walloons on Friday blocked the Comprehensive Economic and Trade Agreement (CETA). The deal for 500 million Europeans was at the final hurdle when it fell, struck down by an administration representing 3.2 million people.

As Canada’s trade minister, Chrystia Freeland, walked out of talks in tears and declared the deal dead, fingers were pointed at Juncker. Under pressure from EU governments, he had agreed that CETA would be a “mixed agreement”. He overruled the executive’s legal advice that finalising the deal was in the Commission’s power.

CETA now had to be ratified by each member state. In the case of Belgium, it means it had to be approved by each of its seven parliaments, giving the Walloons an effective veto.

Wallonia’s charismatic socialist Minister-President Paul Magnette needed a cause celebre to head off gains made by the rival Marxist PTB party. He found it in opposition to an investor protection clause that will allow multinationals to sue governments, just a month after the news that plant closures by the world’s leading heavy machinery maker Caterpillar would cost Wallonia 2,200 jobs.

Juncker was furious. Nobody spoke up when the EU signed a deal with Vietnam, “known the world over for applying all democratic principles”, he sarcastically told reporters.

“But when it comes to signing an agreement with Canada, an accomplished dictatorship as we all know, the whole world wants to say we don’t respect human right or social and economic rights,” he added.  

The Canadian Prime Minister Justin Trudeau was due to arrive in Brussels on Thursday to sign CETA, which is backed by all EU leaders.

European Council President, Donald Tusk, has today spoken to Trudeau and his visit is currently scheduled to go ahead. This morning, the Walloons said they would not be held to ransom by the “EU ultimatum”.

If signed, CETA will remove customs duties, open up markets, and encourage investment, the Commission has said. Losing it will cost jobs and billions in lost trade to Europe’s stagnant economy.

“The credibility of Europe is at stake”, Tusk has warned.

Failure to deliver CETA will be a serious blow to the European Union and call into question the European Commission’s exclusive mandate to strike trade deals on behalf of EU nations.

It will jeopardise a similar trade agreement with the USA, the Transatlantic Trade and Investment Partnership (TTIP). The Commission claims that an “ambitious” TTIP could increase the size of the EU economy by €120 billion (or 0.5% of GDP).

The Commission has already missed its end of year deadline to conclude trade talks with the US. It will now have to continue negotiations with whoever succeeds Obama as US President.

And if the EU cannot, after seven years of painstaking negotiations, get a deal with Canada done, how will it manage if the time comes to strike a similar pact with a "hard Brexit" Britain?

Juncker has faced criticism before.  After the Brexit referendum, the Czechs and the Poles wanted him gone. Hungary’s Prime Minister Viktor Orban muttered darkly about “personnel issues” at the Commission.

In July, it was reported that Angela Merkel, the most powerful politician in Europe, was plotting to oust Juncker. Merkel stayed her hand, and with German elections looming next year is unlikely to pull the trigger now.

When he took office in November 2014, Juncker promised that his administration would be a “political Commission”. But there has never been any sign he would be willing to bear the political consequences of his failures.

Asked if Juncker would quit after Brexit, the Commission’s chief spokesman said, “the answer has two letters and the first one is ‘N’”.

Just days into his administration, Juncker was embroiled in the LuxLeaks scandal. When he was Luxembourg’s prime minister and finance minister, the country had struck sweetheart tax deals with multinational companies.  

Despite official denials, rumours about his drinking and health continue to swirl around Brussels. They are exacerbated by bizarre behaviour such as kissing Belgium’s Charles Michel on his bald head and greeting Orban with a cheery “Hello dictator”!

On Juncker’s watch, border controls have been reintroduced in the once-sacrosanct Schengen passport-free zone, as the EU struggles to handle the migration crisis.

Member states promised to relocate 160,000 refugees in Italy and Greece across the bloc by September 2017. One year on, just 6,651 asylum seekers have been re-homed.

All this would be enough to claim the scalp of a normal politician but Juncker remains bulletproof.

The European Commission President can, in theory, only be forced out by the European Parliament, as happened to Jacques Santer in 1999.

The European Parliament President is Martin Schulz, a German socialist. His term is up for renewal next year and Juncker, a centre-right politician, has already endorsed its renewal in a joint interview.

There is little chance that Juncker will be replaced with a leader more sympathetic to the British before the Brexit negotiations begin next year.

James Crisp is the news editor at EurActiv, an online EU news service.