The Work Programme: just 1 in 20 ESA claimants have found work through the scheme

The latest batch of Work Programme data were released today. New quarter; similar results: a programme doing acceptably for some, but for others not.

Bill Davies is a researcher for IPPR North

The latest batch of Work Programme data were released today. New quarter; similar results: a programme doing acceptably for some, but for others not.

Whilst around one in six adult JSA claimants have found sustained work through the scheme, it remains the case for those receiving Employment Support Allowance (ESA) that only 1 in 20 have. Furthermore, different localities are seeing widely different results. A jobseeker in Blackburn is half as likely to leave the programme with a sustained job as one in Mid Sussex.

When results are unevenly distributed, so are the payments. The following shows the total estimated expenditure by region, split by the number of people joining the programme. Alongside that, it shows the percentage of programme joiners finding sustained work through the programme.

It shows broadly that places seeing the most Work Programme jobs get the most Work Programme money. In a payment-by-results system money follows success, and in some places, such as the South East, Work Programme success is rightly rewarded. In the North East providers have a large share of Work Programme participants, but a small cut of the funding.

Graph work progj

Generally this must be right, but there are two reasons to think the system needs refining.

First, regional performance of the Work Programme strongly reflects regional labour market characteristics. In part, providers in regions seeing better results appear to be profiting from benign labour markets, while those failing may be suffering from weaker ones.

Second, the cash available for people joining the programme (attachment fees) has gradually been cut, and by next year will disappear entirely.

With no money for new participants next year, providers who have struggled to get work for people in difficult labour markets are now going to have to do so with even less money. This is particularly bad for harder to help groups, such as ESA claimants, who are in dire need of intensive support.

Without reform, the design of the programme will entrench economic iniquity. The system of payment-by-results does need to be recalibrated to account for certain facts 1) that certain people are harder to help into work than others, and 2) that some labour markets have more jobs than others.

For one, it should ensure that a basic payment for each individual joining the programme is fixed throughout the programme. This would recognise that people joining the programme later should get the same support as those who joined earlier, and that places with difficult labour market challenges are not starved of public money.

To ensure that the right incentives remain, providers could instead be charged a penalty for not getting people into employment during their time on the programme. Given the different geographies and demographics of the Work Programme, this penalty payment could vary by place, and type of jobseeker.

Finally, the money from these penalties, along with the wider Work Programme underspend, should be channelled towards supporting wage subsidies for people with poor mainstream labour market prospects, and places with fewer jobs.

The programme needs wider reform, but payment by results should not punish people and places that need help the most.

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