The employment minister Chris Grayling has denied that prime contractors of the government’s Work Programme have used voluntary organisations as "bid candy" to win contracts.
The National Council for Voluntary Organisations Special Interest Group for Work Programme Sub-contractors said last month some small specialist charity providers feared large prime contractors were using them as "bid candy" to make their supply chains look more attractive during the tendering stage.
The group also said the programme, which pays prime contractors by the amount of people they get into work, was in danger of systemic failure unless some key issues were addressed, such as the effectiveness of the Merlin Standard code of conduct for supply chain contractors.
Speaking at the annual conference of the Employment Relayed Services Association, which represents organisations providing welfare-to-work services, Grayling said there had been lots of "chatter" and "mumblings and mutterings" about the supply chain.
But he said: "There is no evidence that any prime has been treating its specialist sub-contractors as bid candy."
Grayling acknowledged not everything had gone according to the textbook – for instance, some specialist providers were receiving fewer referrals than expected of people on Employment and Support Allowance – but said overall the programme was running well.
"I know we pushed the envelope very hard and very fast, but I thought we had to because benefits we are making in the early stages would be greater," he said.
He said the programme was now the subject of Whitehall conferences on how government programmes can be successfully set up quickly.
The next year of the programme, said Grayling, would be all about best practice. "I have no worries at all about the future of prime or sub-contractors that are excellent at innovating, work closely with business and think outside the box," he said.