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.

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.