Several charities have said they are considering pulling out of the Work Programme over the next year, amid concerns about the state of the labour market and the design of the scheme.
At a round-table discussion held in the Houses of Parliament yesterday, which was hosted by Gareth Thomas, the shadow civil society minister, and Stephen Timms, the shadow employment minister, charities working in a range of areas said they were worried they would not be able to find sustainable work for the unemployed people who were being referred to them under the programme.
Kirsty Palmer, chief executive of Volunteer Centre Chelsea and Kensington, a Work Programme subcontractor in west London, said at the event: "We are taking a risk on this programme. If in a year’s time it doesn’t work, we will pull out."
Palmer said the government should review the programme so that it rewarded providers for supporting those who were furthest from being work-ready. "If the programme is not reviewed, we are going to see a terrible consequence," she said. "People at the bottom, who need the most help, will fall out of the system."
Palmer told Third Sector the charity could be forced to run the programme at a loss because there were few jobs available and the charity would be paid for its work with unemployed people only if those people found jobs during the 18 weeks in which it worked with them.
"If they find work a week later as a result of their volunteering with us, the payment will go to our prime contractor," she said.
Two other charities, speaking at the event on the condition of anonymity, said they were considering pulling out of the programme for similar reasons.
The homelessness charity St Mungo’s, which did not say it was considering leaving the programme, and another national charity said they had not yet received any referrals under the programme, despite having been appointed as subcontractors to deliver specialist services.
Katharine Moy, director of skills, employment and offender services at St Mungo’s, said at the event that she was concerned that the programme was not reaching those most in need of support. She said that, out of 1,700 clients St Mungo’s already worked with, it could find only 20 people who had been placed on the Work Programme. "Considering that 96 per cent are unemployed, that seems very low," she said.
Another charity representative said a prime contractor had referred to her charity a woman who was seven months pregnant and a person who was on bail and likely to be sent to prison. "Is it realistic to refer these people to us?" she said.
In a statement, the Department for Work and Pensions said: "We monitor prime providers to ensure they are meeting their obligations under the Merlin standard.
"Although the Work Programme is ahead in terms of overall referrals, we are aware of the situation described around referrals to voluntary sector organisations and are working with prime providers to investigate the cause."