By Daniel Hunter

The government’s Work Programme — the scheme which uses private and voluntary sector contractors to find jobs for the long-term unemployed — has come in for a lot of criticism.

A report published by the parliamentary Work & Pensions Committee, gives a more balanced assessment, according to Alan Downey, KPMG’s head of public sector

“The report concedes that progress has been slow, but as one contractor has commented, this is a bit like judging a marathon one mile into the race," he said.

"The Committee acknowledges that providers were operating in a worse than predicted economic situation and that it would have been unrealistic to have expected outstanding results so early in the life of the programme. Providers are predicting a better set of results when the next set of figures is published in June.

"The report highlights the fact that the ‘payment by results’ (PbR) mechanism has delivered a major benefit to the taxpayer. Under PbR, providers do not receive a full payment unless and until they place individuals in sustained employment.

So far the programme has cost some £248 million less than it would have cost under a conventional ‘pay for activity’ arrangement. That is a real saving to the taxpayer. It means that the cost of relatively poor performance in the early stages of the Work Programme has been borne largely by the contractors rather than the taxpayer.

"One of the major concerns about PbR is that it will lead to ‘parking and creaming’ — i.e. providers will help those who are relatively easy to place in employment and ignore the more ‘difficult’ cases, including people with disabilities.

"The government anticipated this problem by offering a higher success fee for placing those who face greater disadvantages. As the Committee points out, differential pricing does not yet seem to be having the desired effect, and it makes some sensible recommendations for changes in the Work Programme, to address barriers to work such as disability, homelessness and serious drug and alcohol issues.

"The report does not pull any punches, but it recognises that the Work Programme is a bold and ambitious initiative. Changes are undoubtedly needed, but we should not join the rush to condemn a programme which still has potential to confound the critics."

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