The Work Programme must make substantial change to operate more effectively, but should not be scrapped, according to a report aimed at making it function more efficiently for service users and charitable providers.
The report, called Refinement or Reinvention? The Future of the Work Programme and the Role of the Voluntary Sector, has been produced by the chief executives body Acevo and the public service provider the Shaw Trust. It is based on interviews with Work Programme providers, mainly from the voluntary sector.
The report says that providers had put a lot of effort into interacting with the Work Programme framework and that it should be kept and adapted rather than scrapped, so that contractors do not have to learn a new system.
"A key message received by the working group was that the Work Programme needs refinement, not reinvention," the report says.
But it makes several recommendations to make the programme more effective.
It says the existing funding model, with small up-front payments and outcomes payments when individuals found work, is problematic for many smaller providers.
"In order to maintain a diverse set of providers with the range of specialisms and expertise necessary to make the Work Programme a success, the Department for Work and Pensions should consider how it can address the problems experienced by many providers as a result of the financial model," the report says.
"At the very least, this should include exploring options for alleviating cash-flow problems through higher up-front payments."
The report recommends moving from individually based payments to those based on a cohort. It adds that classification of clients by the type of benefit they received is unsound.
"The Work Programme’s benefit-based client classification system is flawed and does not accurately reflect the costs involved in supporting different clients into work," it says. "Consequently, we recommend that the DWP move away from benefit groups as the basis of Work Programme client categorisation, in favour of needs-based categorisation based on an up-front assessment."
It also says there should be stronger measures to protect smaller subcontractors, and that the Merlin Standard, designed to regulate the relationship between primes and subcontractors, might not be strong enough to do its job.
"Despite the existence of the Merlin Standard, it is clear that many subcontractor organisations feel that they have not been well treated by their primes," the report says. "All 18 prime providers have received Merlin accreditation. We therefore recommend that the DWP undertake a full review of supply chain stewardship, including whether the Merlin Standard is sufficient to hold primes to their commitments."
The report also highlights elements of the Work Programme that should be kept. These include: the "black box" approach that gives providers freedom to work with service users in any way they think will help; the five-year contract terms; and the way it creates a diverse market with a range of providers.