Summary
Concerns have been raised over the new largely privatised initiative for employment of jobseekers as discussed in 'Work Programme: Providers and Contracting Arrangements’ (HC 718).
The Work Programme, which will consolidate existing programmes that help benefit claimants to find work, is scheduled to be implemented nationwide by June 2011 and will be delivered on a regional basis by a framework of prime contractors, the majority of which will come from the private sector.
These prime contractors will be paid by the Government based on their results in achieving sustainable employment for jobseekers.
Prime contractors are expected to subcontract service provision to specialist local organisations, including voluntary sector providers.
There is a risk of bias, even under the payment-by-results model, as Work Programme providers might focus on the clients they assess as being easier to help.
The Committee recommends that the Government keeps the payment model under review and assesses the outcomes for all participants.
The Work Programme creates a significant financial challenge for prime contractors. This might lead to some clients receiving lower quality support and to significant costs to the Government in responding to service failures.
The Government should put contingency arrangements in place to ensure the continuity of provision for clients. The DWP should remind prime contractors that a key aspect of their role is to bear financial risk, rather than passing it on to subcontractors disproportionately.
Contracting arrangements need to ensure that subcontractors are fairly managed and that prime contractors are able to hold subcontractors to account for poor performance. The DWP must establish robust and independent arbitration and sanctioning arrangements.
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