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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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.