November 26, 2012 7:29 pm

Failure expected on Work Programme target

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Fewer than five out of every 100 jobseekers are finding work through the government’s employment scheme, according to industry executives.

Financial Times analysis, meanwhile, shows that some companies paid to find jobs are doing much worse than their rivals.

Two senior figures in employment services have told the FT they expect the government to miss its target of finding sustainable jobs for 5.5 per cent of people going through the £5bn Work Programme in its first year.

Mark Hoban, the employment minister, will confirm the actual figure – which some believe could be as low as 3 per cent – when he publishes official statistics on Tuesday.

One senior executive said: “I don’t think 5.5 per cent is a realistic figure to be aiming for. It was already an ambitious figure when the government thought there was going to be 2 per cent growth. I definitely don’t think it will have been achieved in the middle of a double-dip recession.”

Another industry insider said: “The figures we were seeing in June this year were more like 3 per cent. The statistics for the full year are likely to be at a similar level.”

Ministers would be highly embarrassed to admit the scheme has fallen so far short of expectations. Iain Duncan Smith, the work and pensions secretary, has staked much of his reputation on its success, while the prime minister has often cited it as a sign of the government’s success in tackling unemployment.

Ian Mulheirn, director of the Social Market Foundation, called the findings “a reflection of [the Department for Work and Pensions’] vastly over-ambitious expectations for the programme”.

Tony Wilson of Inclusion, another think-tank, said the target should have been set at a more modest 5.1 per cent.

While the success rates are expected to increase in the coming months, as the country exits recession, some of the blame for the programme’s shortcomings are likely to be pinned on the companies paid to get long-term unemployed people back to work.

Analysis carried out by the FT shows a wide range in how successful companies have been at finding work for claimants, as measured by the revenues they are receiving, based largely on performance.

The figures show that Serco, the best-performing company, earns nearly double that of the worst-performer, Prospects, for every claimant it is referred. In general, larger companies and ones that refused to underbid their rivals are performing better than smaller ones and some of the more aggressive bidders.

Prospects did not immediately return a request to comment.

Ministers have long been concerned that some contractors are underperforming, and Mr Hoban will write to the lower achievers on Tuesday to warn them their contracts will be terminated if they do not improve the number of people they get back into work.

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