I work for an organisation that is part of the supply chain delivering the Work Programme. The terms under which we work are dictated by the Department for Work and Pensions contract; there is no variation or choice. DWP is operating a monopsonistic market. As a result of the terms, my organisation, like many others trying to deliver this contract, is going to go bust. About 40 jobs will be lost, plus a range of valuable services, expertise and advocacy. We are not underperforming, the terms of the contract and the key performance indicators are being met; we are simply not being paid for delivering services on behalf of the government. The contract is set in such a way that the single customer, DWP, will not pay for supporting those in society who most need it: those facing the greatest disadvantage and those who have been out of employment the longest.
DWP will only "pay for results". Even if we, as a supplier of the Work Programme, get a client into work we are not rewarded. We may have spent six months of providing fortnightly advice sessions and weekly interventions (training, workshops, activities, projects etc) and met all the client's expenses for attending, but we will not be paid for any of this. Payment will only be forthcoming after six months of "sustainable employment". The government is expecting charitable organisations like mine to lend money to subsidise a government department. The effects of the economic downturn are magnified for our clients. Employers, if they are recruiting, will take a low-risk decision to take on someone already employed or who has recently been in employment rather than someone long-term unemployed. Vacancies notified have fallen dramatically in the areas where we operate and unemployment is increasing sharply.
As a charitable organisation we have had no choice other than to seek income in the face of falling grant funding from local and national government. What no one could anticipate is the harshness of the Work Programme contract. No one has had any experience of such draconian payment terms. And it seems untimely, to say the least, to launch a major welfare reform based on getting those furthest from the labour market into work during an extended period of economic depression. To some it would seem cynical for the cost of supporting some of the most needy in society to be transferred out of the welfare state.
There is a solution: DWP needs to reward Work Programme providers more realistically for taking on clients and offset the costs against future sustainable work outcomes. The overall cost to the Treasury does not necessarily need to rise but the timing of payments to providers has to change and the risk to be shared.
Nick Bailey
Grampound, Cornwall