The controversial practice of big companies "creaming and parking" – "creaming" off the easiest cases and "parking" the hardest ones with charity subcontractors – is endemic within the government’s Work Programme, according to a study by the Third Sector Research Centre.
The study, Does Sector Matter? Understanding the Experiences of Providers in the Work Programme, examines the experience of providers from the private, public and charity sectors, and says that charities have experienced particular problems with the government’s back-to-work scheme.
The study says the practice of creaming and parking is "endemic within the programme" and is a "rational response" by providers given that the scheme uses a payment-by-results model whereby "a proportion of customers would always be very unlikely to get a job".
It notes that some prime providers are "uncomfortable with this but felt it was the only way they could operate within the programme".
The study says the government attempted to control creaming and parking in the programme by introducing higher payments for harder-to-help clients, but researchers found no evidence that this had incentivised providers to take on problem cases.
Some charity subcontractors in the programme have also experienced a lack of referrals or no referrals at all. The researchers say this "raises concerns about what is happening to those in need of specialist provision".
The structure of the programme also places those who are not generic welfare-to-work providers at a disadvantage – which, the researchers argued, affects many third sector organisations that provide specialist support.
James Rees, part of the TSRC team that conducted the research, said: "Despite positive government attempts to introduce payment incentives for harder-to-help groups, it appears that those who are furthest from the labour market or require specialist provision are not being catered for by the Work Programme in practice.
"It seems that reduced funding, coupled with a more competitive and commercial environment, may be undermining the success of the programme. Interventions for many clients might be costly – but they might pay off in the long run.’
James Allen, head of public services and partnerships at the National Council for Voluntary Organisations, said: "We share the researchers’ concerns that specialist providers are receiving a low number of referrals, and that harder-to-help service users are being ‘parked’.
"While we have seen examples of good practice by both prime and subcontractors, there are still question marks over the quality of service that many people on the work programme actually get."
Ralph Michell, director of policy at the chief executives body Acevo, said: "The TSRC report echoes what many specialist third sector providers have been telling us – that many of the most disadvantaged people are not receiving the help they need through the Work Programme."
A spokesman for the Department for Work and Pensions said in a statement: "The Work Programme has already got more than 207,000 of the hardest-to-help unemployed people into work, and many specialist charities are playing an important role."