Third sector organisations delivering services for the Work Programme believe they have been poorly supported and face significant losses because of problems linked to the payment-by-results scheme, according to written evidence submitted to the Work and Pensions Committee.
The committee has received 47 written responses from organisations and individuals, including more than 30 from the third sector. The committee is currently conducting an inquiry into the government’s back-to-work programme, which has been beset by problems since it was launched in June 2011.
In its evidence, the Somali Golden Centre of Opportunities, a community group based in Manchester, said it had made a formal complaint against its prime provider, G4S, for a potential breach of the Merlin Standard, the Department for Work and Pensions regulation governing the scheme. The charity said the company "showed considerable interest in us during the bidding process… but very little interest in genuine partnership working to support jobseekers", and no referrals were made. The complaint, however, was not upheld.
St Mungo’s, the homelessness charity that pulled out of the scheme in May 2012 citing a lack of referrals, said in its written evidence that "as involvement in the Work Programme becomes financially unsustainable for charities, more may be forced to leave".
Social Firms UK, the national support body for social enterprises that deliver employment services, said in its response that the programme had led to at least two of its members closing. "The cumulative effect of creaming and parking, lack of referrals and lack of support for subcontractors by prime contractors, lack of accountability… and the DWP’s laissez-faire approach has resulted in at least two of our members going out of business."
The Pluss Organisation, a social enterprise that provides disability employment services, wrote in its submission that companies handling referrals believed "that the third sector could and should deliver a free service as they are being supported by charitable donations and other funding sources".
However, G4S, which operates as a prime contractor in the south east, the north west, and Yorkshire and Humber, said in its written evidence that it offered "extensive support" to subcontractors, and its model of working had a "positive" effect on them.
The DWP said in November 2012 that 31,000 people had found a job for six months or more out of 878,000 participants in total – a success rate of 3.5 per cent.