It’s too early to judge the Work Programme, but it isn't too early to worry

By Peter Hoskin
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Has the Government’s Work Programme failed? Well, today’s numbers from the DWP certainly don’t look good. They show that of the 743,870 people who were processed through the scheme in its first twelve months, only 18,270 managed to clock up six months of work. That’s a paltry 2.5 per cent.

And it gets worse: for the main group of jobseekers*, the equivalent figure was 2.2 per cent. That compares to the Government’s “minimum performance level” of 5.5 per cent. All this is rather a blow for Iain Duncan Smith and his team.

But before everyone rushes to condemn the Work Programme to death, it’s worth pointing out some quiet truths:

• This has happened before. Funny how all the Labour MPs who are decrying the Work Programme as a “miserable failure” today were less vocal when their own welfare-to-work scheme consistently missed its targets. And that is what happened: just look at this FT story from 2009, or this one from the same year.
• As it was then, the economy is the main problem now… To be fair, Labour had a fairly decent excuse back then: their welfare-to-work targets were devised in the good times, so when the economy sank they immediately became unrealistic. But the Coalition could also say something similar. They cooked up their targets a year-and-a-half-ago, when growth for 2012 was expected to be around 2 per cent. That obviously hasn’t happened, so it’s more difficult to place the long-term unemployed into employment.
• …but the contracts might be a problem too. The contracts written between the DWP and the providers who administer to the Work Programme are one gigantic balancing act. Costs need to be traded off against expectations, and the result is often imperfect. Under New Labour it was argued that some providers had “priced too low and promised too good a performance” in order to pick up government business. That sort of thing could be happening today, again skewing the official targets.

All of which suggests that it’s too early to judge the Work Programme: its performance should improve as the economy recovers, and it might improve before then if the Government can tweak some of the contracts it has signed. Indeed, it’s striking that poorly-performing providers have been given until April to improve, otherwise they might be jettisoned. When Chris Grayling founded the Work Programme, he always intended the contracts to be continually reviewed and renewed.

But, that said, it isn’t too early to worry about the course of the Government’s welfare policies. Today’s figures are pretty dreadful, and they come on top of doubt about the deliverability of the Universal Credit. This remains some of the most important work that the Coalition is doing, but they may now have to wait until after the election to boast about it.

*Those on Jobseeker’s Allowance who are aged 25 or over.