Work Programme (Funding)
Oral Answers to Questions — Treasury
11:30 am

Photo of Sheila Gilmore

Sheila Gilmore (Edinburgh East, Labour)

What assessment he has made of the effectiveness of the funding arrangements which he agreed with the Secretary of State for Work and Pensions for the Work Programme.

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Danny Alexander (The Chief Secretary to the Treasury; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

The Work programme is the biggest single payment-by-results programme Great Britain has ever seen. The funding arrangements I agreed with the Secretary of State for Work and Pensions ensure that providers are paid to find sustained job outcomes for those who are or are at risk of being long term unemployed. For the very first time, providers are paid in part through the benefit savings that they generate.

Photo of Sheila Gilmore

Sheila Gilmore (Edinburgh East, Labour)

The Chief Secretary wants us to look at the cheapness of the scheme to providers, but buying cheap can be a false economy if the product does not work. The price here is being paid by people staying in long-term unemployment, not getting jobs and still being on benefit. Is not the Work programme a failure?

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Danny Alexander (The Chief Secretary to the Treasury; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

No, I do not believe it is. The hon. Lady refers to costs, and she will know that the flexible new deal, which the Work programme replaced, cost £7,495 per job outcome; that compares with costs of about £2,000 under the Work programme. It is a great deal more cost-effective. The hon. Lady will also be aware that 56% of those first Work programme starters have come off benefits and that up to September this year, there have been 200,000 job entries, as reported by providers, so there is a sense of progress in the Work programme, too.

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Andrew Bridgen (North West Leicestershire, Conservative)

Does my right hon. Friend agree with the CBI, which has said that the Work programme has already helped to turn around the lives of thousands of people and is delivering real value for money for the taxpayer?

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Danny Alexander (The Chief Secretary to the Treasury; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)

Yes, I do agree. The fact that the job outcomes are more stretching than previous schemes before providers get paid and that they are paid only for results—not just for activity—of course means that it is harder for them to start with, but the fact that there have been 200,000 job entries under the scheme up to September 2012 speaks for itself.