Support 100 years of independent journalism.

  1. Politics
4 January 2012

Will the Work Programme work?

Some key background reading to understand the debate on welfare reform.

By Rafael Behr

Liam Byrne, the shadow Secretary of State for Work and Pensions, has successfully created a bit of a stir with his intervention on welfare reform in Monday’s Guardian. There is more planned, with speeches on the subject over the next few months. 2012, I’m told, is meant to be the year that Labour gets back into the conversation about welfare reform. Since the election, the terms of debate have been effectively set by the Tories. Public opinion remains steady in support of cuts to the benefits bill, with a widespread perception that the last government lost control of spending and was relaxed about people choosing to live on the dole. Iain Duncan Smith’s popular promise to reform the system to “make work pay” has, senior Labour figures privately concede, effectively shut the opposition out.

Whether Ed Miliband can get back in is the subject of my column in this week’s magazine. One key factor will be the question of whether the government’s welfare plans will actually work. There is already a lot of disquiet around the Work Programme, the huge welfare-to-work scheme under which private and voluntary sector providers compete for contracts to place the long-term unemployed in work. The contractors are paid according to how effective they are in matching their “customers” with jobs. As I write in the column, the whole thing starts to break down if there simply aren’t enough vacancies around to fill. The scheme was designed at a time when the Department for Work and Pensions expected the labour market to track optimistic growth forecasts from the Office for Budget Responsibility. The OBR turned out to be wrong, of course.

But even if vacancies are there for some of the people being transferred onto the Work Programme, there are serious doubts being raised in the welfare-to-work sector about whether some of the providers will be able to meet their targets. There is also a lot of suspicion around that some of the providers won their contracts with unrealistic estimates of how much it actually costs to train someone who has been out of work for a year and find them a job. There are some rumbling noises around about the Work Programme either collapsing or, more likely, needing to be bailed out by government.

For anyone interested in welfare-to-work policy detail, I recommend the following links:

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. A weekly newsletter helping you fit together the pieces of the global economic slowdown. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

Public Accounts Committee report on “Pathways to Work”

Content from our partners
How to create a responsible form of “buy now, pay later”
“Unions are helping improve conditions for drivers like me”
Transport is the core of levelling up

This is a parliamentary investigation into a pilot scheme set up under Labour to use the private sector to help claimants of incapacity benefit back into work. Mostly they failed to meet their performance targets and generally performed worse than the Job Centre. A number of organisations named as serious under-performers in the report won contracts under the Work Programme.

The Social Market Foundation report: Will the Work Programme Work?

The think tank that pioneered payment by results as a mechanism for improving delivery of welfare-to-work programmes questions whether its ideas have been implemented in a way that is likely to get the desired outcomes. (Answer: no.)

BBC Radio 4: The Report – The Work Programme

Almost everything you need to know about welfare-to-work schemes in one handy half-hour radio documentary.