The DWP published this ad-hoc release last week. It very briefly details how much money has been paid to Work Programme providers from when it began up to 31st March this year. Providers are the (mainly) private sector organisations contracted by the DWP to help the long-term unemployed find work. In the DWP release it says:
“The Work Programme is predominantly a ‘Payment by Results’ model”
The Government have been keen to trumpet this feature, claiming that providers only get paid if they are successful. In fact though, since the Work Programme began, 39% of the money paid to providers has come from the ‘attachment’ fee. That’s a payment paid when an unemployed person starts the Work Programme with a provider. For the first year of the programme, the attachment fee was £400, the second year it was £300 and for the year just gone, £200. From July, the attachment fee will no longer be paid. To date then, on this “paid by results progamme”, the Government has paid providers £538m (out of a total of £1.372bn) just for taking people on their books and before they have helped a single person into work.
With this payment for doing nothing now ended, will we see Work Programme providers start to walk away?
On this 2nd DWP release, it says that over the same period, there have been 296,000 job outcomes. The DWP defines a job outcome as a job that is sustained for at least 6 months (or three months for certain groups). Doing a quick calculation based on the attachment fees paid, it looks as though around 1.72 million people have been attached to the Work Programme since it began, so that means only about 17% (1 in 7) have found work lasting at least 6 months. Not a great return for a spend of £1.4bn, particularly when you think that a lot of these people would have found work anyway.