The London Voluntary Service Council has called on the government to rethink its approach to commissioning back-to-work services after the recent closure of two Work Programme providers.
Eco-Actif Services, a community interest company based in Sutton, south London, and Red Kite Learning, an education and learning charity in Southwark, south London, both closed in July and blamed the government’s move to large-scale payment-by-results contracts.
Lin Gillians, chief executive of the LVSC, said: "Over the past two years, longer, larger contracts for employment programmes have been almost exclusively awarded to large private sector providers.
"The intention was that specialist voluntary and community sector providers would deliver tailored support as subcontractors – however, as time goes on we are seeing this specialist provision disappear.
"This raises enormous concerns about the quality of support available to the thousands of Londoners facing serious or multiple barriers to work."
Gillians said: "The government urgently needs to review the impact of this commissioning model on disadvantaged job seekers and special employment providers before more damage is done.
"This isn't about blaming the Work Programme or prime contractors – it's about providing appropriate support to give everyone a fair chance to work."
Brendan Tarring, who founded RKL 25 years ago, said: "The Department for Work and Pensions needs to reassess its one-size-fits-all mentality and acknowledge that individually tailored employment support for vulnerable jobseekers is best delivered by innovative mid-sized charitable organisations."
The DWP was unavailable for comment.