David Cameron’s flagship back-to-work programme was branded a ‘shocking’ failure last night – as it emerged that none of the 18 private providers has met its contract targets.
In a damning assessment, the powerful Commons public accounts committee said the £5billion Work Programme had made an ‘extremely poor’ start since its launch in the summer of 2011.
The scheme, personally championed by the Prime Minister, pays private sector firms such as A4e and G4S to find jobs for the long-term unemployed.
But during its first 14 months only 3.6 per cent of claimants on the scheme moved off benefits into lasting jobs. Spending on the programme during the period totalled £435million, with each long-term job costing more than £14,000.
The figures for the first 12 months were even worse. Of 785,360 people referred to the Work Programme, just 18,270 (or 2.3 per cent) were found a lasting job.
Officials had estimated that 5 per cent would find jobs on their own in the first year if the scheme did not exist.
Margaret Hodge, Labour chairman of the committee, said: ‘The Work Programme is absolutely crucial for helping people, especially the most vulnerable, get into and stay in work. However its performance so far has been extremely poor.
‘The programme is particularly failing young people and the hardest to help.
'It is shocking that of the 9,500 former incapacity benefit claimants referred to providers, only 20 people have been placed in a job that has lasted three months, while the poorest performing provider did not manage to place a single person in the under-25 category into a job lasting six months.
The committee said it shared concerns that providers are concentrating on creaming off job placement bonuses from the easiest cases, and sidelining clients who require more time and investment, a process known as ‘creaming and parking’.
Under the Work Programme, providers can earn between £3,700 and £13,700 per client, depending how hard it is to help an individual, with an initial payment of between £400 and £600.
The main payments are made only after someone has been in work for six months – the Government’s definition of sustained employment.
Individuals are placed on the programme for two years, meaning that a full assessment of the scheme will not be possible until this summer.
Ministers have written to seven of the 18 private providers warning them they could lose their contracts unless they improve performance. None of the providers has met its targets.
Public concern over the welfare-to-work programme erupted last year when it emerged A4e boss Emma Harrison had paid herself £8.6million in a year, despite claims that the firm’s record in finding jobs for the unemployed was ‘abysmal’.
The Department for Work and Pensions last night said the report painted a ‘skewed picture’. A spokesman said: ‘It is making a real difference to tens of thousands of the hardest-to-help jobseekers. We know the performance of our providers is improving.’