Did 50% of young people on the Work Programme find Jobs?

by richardhutton

[It needs to be noted from the outset that the source here is an uncorrected transcript of Parliamentary evidence].

During a House of Commons Work and Pensions Committee hearing about ‘the Work Programme: experience of different user groups’, several representatives of Work Programme providers made striking claims about their success in finding jobs for participants.

Sean Williams, Managing Director of G4S Employment Support Services, claimed that: “Of those young people who have been on the programme for 18 months, over half have got jobs.”[1]

Richard Clifton, Business Development Director of the Shaw Trust and Careers Development Group, added: “Our experiences mirror what Sean is saying. We are looking at a similar figure: half the people in the 18 to 24 group have already entered employment”[2].

Is this really true? Is it really?

No, of course not. In their commentary on the Work Programme statistics[3], the National Audit Office reported during December 2012 that for Jobseeker’s Allowance claimants aged 18-24 years old, there were 176,680 referrals to the Work Programme (as of July 2012). 5,920 job outcomes were achieved: a success rate of 3.4%[4]. G4S provides the Work Programme in three areas of Britain; and as of November 2012, their rate of overall Job Outcomes tabulated as follows:

Manchester, Cheshire, Warrington

Total Referrals: 19,330

Total Job Outcomes: 880

Rate: 4.55%

Surrey, Sussex, Kent

Total Referrals: 21,500

Total Job Outcomes: 900

Rate: 4.19%

NE Yorks, The Humber

Total Referrals: 13,250

Total Job Outcomes: 460

Rate: 3.47%

Average rate of success: 4.07%

Careers Development Group provides the Work Programme in one area:

East London

Total Referrals: 26,630

Total Job Outcomes: 910

Rate: 3.42%

Average rate of success: 3.42%

So, both groups have claimed overall job outcomes for somewhat less than half of their participants[5]. Their rate is consistent with the general proportion of 16-24 year olds gaining jobs while being on the Work Programme (3.4%) – so it is fair to assume  that neither G4S nor CDG managed to help c. half of their young participants into jobs.

This particular exaggeration, by a multiple of approximately 10, is in-keeping with claims previously made by the Employment Related Services Association – the trade body for organisations delivering the Work Programme – whose Chief Executive Kirsty McHugh has repeatedly maintained that the Work Programme helped more than 200,000 people into employment, when the true number was 31,000. For example, in December 2012:

“By the end of September 2012, ERSA figures show that the industry had helped 207,831 individual jobseekers into work, with 29% of those who started the Work Programme in June 2012 having found employment”[6].

Obviously, this is not true. The DWP themselves have stated that “the total number of job outcomes paid to providers from 1st June 2011 to the end of July 2012 is 31 thousand”[7]. Despite this, during the Parliamentary committee hearing, McHugh again claimed that:

“We know at the end of September of last year, 207,000 individual jobseekers had entered work”

Furthermore:

“We are going to be releasing new job-start figures towards the end of April, we hope, and we are working with the prime contractors around the collation of those. I cannot give you that figure yet, but it will probably be 50% higher than the one we released at the end of September. Do not hold me to that if it is not, but we are probably looking at about 300,000, who have gone into work”[8].

Again, this is c. ten times the DWP’s reported performance of Work Programme Job Outcomes. However, McHugh did reveal something which is noteworthy:

“Q286 Chair: What is the definition of a job start?

Kirsty McHugh: This is about individual customers and individual jobseekers entering work.

Q287 Chair: It could be one day?

Kirsty McHugh: It could be one day or it could be one, two or five years”

So, of the 3-5% job starts G4S/CDG have claimed, it is possible that all of them have been on behalf of people working for no more than one day.

All of this may sound unpromising, but it actually proves highly lucrative for Work Programme providers. Job outcome fees vary, from £1,200 for customers claiming Jobseeker’s Allowance, to £3,500 for people “coming off Incapacity Benefits”[9]. At a minimum, in job outcome fees G4S will have claimed £2.68 million[10]. CDG will have claimed at least £1.09 million[11]. So, altogether, these two providers will have made a minimum of £3.7 million in Job Outcome fees.

But this is a trivial sum compared to the amount of money both organisations will have received merely from people being allocated to them by Job Centres. Attachment fees vary, from £400 to £600[12]. So at a minimum, G4S’ referrals will have made the company £21.6 million[13]. CDG’s referrals will have made them at least £10.6 million[14]. Altogether, £32.2 million in attachment fees, and £3.7 million in Job Outcome fees: a total of at least £35.9 million between these two organisations.

This is an awful lot of money – and it is extremely questionable what, precisely, Work Programme providers do to help somebody secure employment, of any duration. There is no concrete evidence, anywhere, outlining the type of support they provide; evaluating whether or not they really did assist somebody in gaining work – or if a person merely found employment of their own accord. So why aren’t these people being held to account for this?


[1] ‘The Work Programme: Experience Of Different User Groups’ Work and Pensions Committee, House of Commons (Session 2012-13); 6th March 2013 http://www.publications.parliament.uk/pa/cm201213/cmselect/cmworpen/uc835-iv/uc83501.htm

Williams previously claimed that:  “The work programme is the most cost effective welfare-to-work scheme the government has ever produced. At £2,097 per job, it’s less than a third of the previous flexible new deal,” ‘Welfare-to-work firms strike back at government’s “gross misrepresentation”‘ by Randeep Ramesh, Guardian; 27th November 2012:

http://www.guardian.co.uk/society/2012/nov/27/government-work-programme-private-firms

This isn’t true either. According to the DWP themselves:

“the maximum fee a provider can attract for an individual client ranges from £4,050 for a JSA claimant aged 18-24 to £13,120 for an ex-Incapacity Benefit claimant in the Work Related Activity Group”.

See Section 4. Differential Payments, in ‘Work Programme: providers and contracting arrangements – Work and Pensions Committee’ Work and Pensions Committee, House of Commons; 8th May 2011

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/718/71807.htm

It’s impossible to provide a proper ratio of expenditure on the Work Programme, versus job outcomes, because the current spending on the Work Programme is not publicly available. However, an approximation can be made: the DWP estimate that the Work Programme will cost between £3 billion – £5 billion, over a period of 5 years: that is, roughly £600 million – £1 billion per annum. There have been 31,000 job outcomes for the first year of the Work Programme. So, each of these jobs

Equates to a cost of £19,354 – £32,258: potentially for no more than one day’s work, each person; and with the Work Programme provider possibly offering no credible support or input at all.

[2] ‘The Work Programme: Experience Of Different User Groups’ Work and Pensions Committee, House of Commons (Session 2012-13); 6th March 2013 http://www.publications.parliament.uk/pa/cm201213/cmselect/cmworpen/uc835-iv/uc83501.htm

[3] These were released in November 2012: see ‘Work Programme Statistics’ by the Department for Work and Pensions: http://statistics.dwp.gov.uk/asd/index.php?page=wp

[4] ‘A commentary for the Committee of Public Accounts on the Work Programme outcome statistics’ by National Audit Office; 13th December 2012: http://www.official-documents.gov.uk/document/hc1213/hc08/0832/0832.pdf

[5] ‘Data shows Work Programme failures’ by Randeep Ramesh, Guardian; 27th November 2012: http://www.guardian.co.uk/news/datablog/2012/nov/27/data-work-programme-failures

[6] ‘Kirsty McHugh on the official Work Programme statistics’, ERSA; 7th December 2012: http://ersa.org.uk/media/blog/kirsty-mchugh-official-work-programme-statistics

As far as I can tell, these figures are a total fabrication. There is no evidence available to support McHugh’s claims at all: the statistics are drawn from a table of ‘Job Starts’ on page 5, in a report by ERSA themselves ‘Employment Related Services Association Media Pack Release of Job Start Data: November 2012’

http://www.avanta.uk.com/wp-content/uploads/2012/07/Work-Programme-ERSA-Nov-2012.pdf

No source is provided for this data.

[7] See ‘Work Programme Statistics’ by the Department for Work and Pensions: http://statistics.dwp.gov.uk/asd/index.php?page=wp

[8] ‘The Work Programme: Experience Of Different User Groups’ Work and Pensions Committee, House of Commons (Session 2012-13); 6th March 2013 http://www.publications.parliament.uk/pa/cm201213/cmselect/cmworpen/uc835-iv/uc83501.htm

[9] ‘The Work Programme: Experience Of Different User Groups’ Work and Pensions Committee, House of Commons (Session 2012-13); 6th March 2013 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/718/71807.htm

[10] Manchester, Cheshire, Warrington: £1.08 million (900 x £1,200)

Surrey, Sussex, Kent: £1.05 million (880 x £1,200)

NE Yorks, The Humber: £552,000 (460 x £1,200)

[11] (910 x £1,200)

[12] ‘The Work Programme: Invitation to Tender – Specification and Supporting Information’, Department for Work and Pensions; (no date)http://www.dwp.gov.uk/docs/work-prog-itt.pdf

[13] (54,080 individuals x £400)

[14] (26,630 individuals x £400)