It is a dreary winter morning at the offices of a charity subcontracted to the government's flagship welfare-to-work scheme, the Work Programme. The charity is letting me spend the day watching how the programme is run, on the condition that it remains anonymous.
Third Sector has decided to approach a charity directly, without approval from the Department for Work and Pensions, in order to gain full access to the programme and a frank account from staff about the charity's experience of delivering it. All identities have been changed to protect the charity's identity.
Six unemployed people are due to arrive at 10am, but only two have turned up by half past so Charles, who runs the programme, begins. "It's quite common that people don't turn up," he says. "We make at least three attempts to contact them over the following week by phone, post, email and text message. But if after that they don't arrive, we just give their name back to our prime contractor. They're not our responsibility after that."
Most jobseekers are referred to the charity if they have not found work after taking part in a scheme run by its prime contractor. That is the case for the two jobseekers here today.
"Referrals to subcontractors are already below those predicted by the Department for Work and Pensions"
Margaret Hodge MP, chair of the Public Accounts Committee
Peter, aged 58, is articulate, has a range of experience and has completed courses in literacy, numeracy and IT skills. He is keen to work in a clerical role, but says he has been bullied at work and is worried about age discrimination.
Esther refuses to reveal her age or to give clues about her employment history or what she would like to do. She mumbles, slumps in her chair and hides behind a pulled-down hat.
Clara arrives an hour late. She is young, European and speaks English slowly but comprehensibly. She seems keen to work, but is baffled by the range of agencies she has been sent to and unsure why she is here.
Charles outlines how the charity runs the programme. "You'll be with us for the next few months," he says. "We will help you to look for jobs and we will try to put you into voluntary roles if that could lead to work or make you more employable.
"You're not going to be harassed by the job centre or the other welfare-to-work provider while you're here. We will be supportive and give you the space to think about what you'd really like to be doing as a career. You should make the most of that."
"There is no evidence that any prime is treating specialist subcontractors as bid candy"Chris Grayling MP, employment minister
His approach is supported by the charity's chief executive, Laura, who had told me earlier: "We don't like to work on an 'any job is good enough' principle. Shelf stacking is not good for everybody."
After the initial session, the jobseekers are paired with Charles and his colleagues, Luke and Charlotte, to talk about their career aims and look for placements that could lead to jobs. Charles joins Esther, who has not brought a CV or named an area in which she would like to work. He takes a tough approach.
"It sounds like you're just trying to tick the boxes to stay on benefits and you're wasting my time," he tells Esther. "If you want to just tick the boxes, that's fine - we can do that for you."
I am surprised by Charles's approach. The voluntary sector has been championed partly because it is perceived to be better than large, private firms at helping hard-to-reach people with complex needs. I ask Charles about this later.
"I'll do what I can for her, but this programme is payment by results," he says. "If it looks like she doesn't want to work, I can invest only so much time in her."
"The DWP should make sure standards for prime contractor management of subcontractors are implemented"National Audit Office report
After the one-to-one sessions, the jobseekers leave and the charity's staff get together to debrief. "Peter has expressed an interest in four different voluntary roles and he seems well qualified for them," Charlotte says. "But he's obviously had problems working with people in the past, and I wonder whether he's a little paranoid."
Luke says Clara has shown an interest in two voluntary roles, and members of the team discuss offering her some English language training. Esther is by far the day's most difficult case. "I don't think she's interested in anything," Charles says. "I don't think she wants to work."
I ask about the Work Programme generally. "Getting the type of people we see into work within 18 weeks is unrealistic," says Charles. "We can usually get them into some kind of voluntary work in that time, but the likelihood of them moving into work at those places is slim because they don't have many vacancies."
The team tells me that about half of the jobseekers they see do not speak English as a first language, and about 20 per cent do not speak English at all. Some have been out of work for 20 years, they say.
The charity, they say, has had more referrals from its prime provider than it initially expected to receive but, because of the payment-by-results model and a lack of up-front funding, it cannot recruit someone to handle the extra workload - the 'attachment fee' that the charity receives for each person it works with is only just enough to cover the jobseeker's travel expenses.
"The number finding jobs is broadly in line with expectations"The Employment Related Services Association
"In the past, with more funding, we ran more intensive welfare-to-work programmes. If those programmes didn't succeed in breaking the cycle of unemployment, this won't," Charles says.
Laura describes how the charity is paid for getting a person into work only if that work comes from an interview arranged while they are on the charity's scheme. So if a jobseeker arranges an interview the day after the programme, using the skills learned during that programme, the charity receives nothing. But the prime is paid.
I ask what could be done to help them deliver the programme more effectively. Charles suggests increasing the attachment fee and paying for softer outcomes, such as improving a person's interview skills or confidence, so that the charity could afford to take on a new member of staff to run the programme.
"We criticise Esther because she is just ticking the boxes to stay on benefits, but it feels like we are doing the same thing," he says. "We're just ticking the boxes to follow our contract."
"There is something called 'cream and park' - private firms cream off easier clients and park the rest with voluntary organisations"
Sir Stuart Etherington, chief executive, NCVO
He says the prime is supportive and tries to help the charity where it can, but there is a lot of bureaucracy. "This programme was supposed to be non-bureaucratic, but there is so much paperwork and so many hoops to jump through," he says. "We are in contact with our prime on a very regular basis about how the programme is going."
Like other organisations delivering the Work Programme, the charity is struggling to meet the targets set out in its contract. None of the jobseekers referred to it have yet found work. "There will come a point where our prime will tell us we are not meeting the targets," says Charles. "They'll probably strike us off. We're looking at whether it's financially viable to keep running the programme."
Laura, the chief executive, says: "We have a more positive approach than a lot of people in the sector, but we can see it is flawed. Our prime expects us to get 25 per cent of the people into work, and that figure will need adjusting. We knew that was a risk when we signed the contract."
Laura says the charity is sheltered from some of the risks because it receives some unrestricted income from a charitable funder, which allows it to fund the small Work Programme team, and because the programme is a small part of its overall operation. "If this was our sole source of funding, I'd be really worried," she says. "The structure of the programme is one-size-fits-all, and that is a poor approach. Looking at the bigger picture, that does worry me."
PROGRAMME PROS AND CONS:
The good points
The non-prescriptive approach Charities are allowed to run the scheme in any way they choose, provided it meets minimum standards. Tomorrow's People and Community Links have welcomed this, saying the scheme is less restrictive than previous welfare-to-work programmes.
Incentives to help the hardest to reach Providers are paid more for getting harder-to-help jobseekers back to work.
Merlin Standard The DWP produced a set of standards that prime contractors should adhere to in dealing with voluntary sector subcontractors. Many charities agree that the standards are sound.
The sticking points
The economy Economic growth is slower than was expected when the programme was designed, so jobs are harder to find. A National Audit Office report last month said the DWP's targets were likely to be over-optimistic.
Number of referrals A National Council for Voluntary Organisations report last month said most charities were not satisfied with the low number of jobseekers their prime contractor had referred to them.
Protection from risk The NCVO report said most charities felt their prime contractor had not shielded them from financial risk, or had done so only to a small extent.
Referral fees Some charities would like prime contractors to pay higher up-front 'attachment fees' when they refer jobseekers to them.
Hard outcomes Charities delivering the programme are paid only if a jobseeker gets into work and stays in work for three or six months. Many have said they would like to receive payments for achieving soft outcomes, such as improving jobseekers' interview skills.
Data The DWP will not permit the publication of figures relating to the scheme. Some charities say this prevents them from sharing good practice.