Government 'over-optimistic' on Work Programme numbers - NAO

Published by Ross Macmillan for 24dash.com in Housing and also in Central Government, Communities, Local Government

The Government has been 'over-optimistic' in its estimates for the number of people its flagship Work Programme can get back into employment, according to a report by the National Audit Office (NAO).

The programme, which was launched last summer, sees housing associations working with private contractors to help the unemployed get back into work.

The scheme replaced virtually all of the existing ‘welfare to work’ schemes, including the popular Future Jobs fund, which many housing associations were involved in.

The NAO revealed today it had so far cost £63 million to terminate those existing welfare to work contracts, including contracts with 10 providers that went on to win contracts for the Work Programme.

The new programme sees contractors paid by the Government on a results basis.

The NAO’s analysis suggests that 26 per cent of the largest group of job seekers in the programme will get jobs, compared to the Department’s estimate of 40 per cent.

The NAO report says: "Some contractors in areas of high unemployment may struggle to meet nationally set targets. It is possible that one or more contractors will get into serious financial difficulty during the term of the contracts."

Today’s report also points out that no alternatives to the programme were considered as part of the business case, nor was it piloted to test assumptions.

The uptake from housing associations has been slow because there are no guarantees of funding or the numbers of unemployed people being referred to them.

The NAO report recognised such frustrations adding that "sub-contractors are frustrated at the speed with which clients have been referred to them."

Landlords also feel they're not being treated fairly by prime contractors for the work they're being asked to do.

Associations involved in the Work Programme include the likes of the Papworth Trust, Affinity Sutton, Framework Housing Association, Helena Partnerships and Twin Valley Homes.

The NAO also raised concerns about the speed at which the programme was rolled out before the IT project to support the scheme was "fully functional".

The NAO report said: "A consequence is that the department will not be able, until March 2012 at the earliest, to carry out automatic checks to confirm that people who find work have stopped claiming benefits."

It says the department needs to ensure that improvements to the IT system are delivered on schedule. It added: "In the meantime, there is an increased risk of fraud and error going undetected."

Employment Minister Chris Grayling said he was disappointed the report was partially based on "guesswork".

He said: "I'm really disappointed that the NAO is producing a report which is partially based on guesswork, when it's private companies and not taxpayers who are carrying the risks.

"Unlike the last government's welfare to work schemes, we only pay when companies succeed in getting the long-term unemployed into sustained employment."