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WorkProgramme — [Mr Charles Walker in the Chair]

– in Westminster Hall at 2:48 pm on 10th October 2013.

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[Relevant documents: Can the Work Programme work for all user groups?, First Report from the Work and Pensions Committee, HC 162, and the Government Response, HC 627.]

Photo of Anne Begg Anne Begg Chair, Work and Pensions Committee 2:55 pm, 10th October 2013

I am delighted to be given the chance, Mr Walker—five minutes early—to debate the report on the Work programme that my Select Committee published at the end of May this year, and the Government’s response to it.

Other colleagues will arrive, hopefully, in time for when they thought that the debate would start, but in the meantime I extend my congratulations to the new Minister; this is perhaps her first outing in her new role. She may be new to the employment aspects of the role, but she is all too familiar with certain issues that I shall raise this afternoon to do with people with disabilities and their ability, or inability, to get into work. I appreciate that when I refer to “the Minister” this afternoon, it is probably not her that I am speaking about, but her predecessor. I extend my condolences to him, in as much as he proved to be a capable Minister whenever he appeared before our Committee, and he knew his brief well.

The report that we are debating was the result of our second inquiry into the Work programme. The first, in May 2011, was on the contractual arrangements of the programme just before it was introduced. At the time, we said that we would return to the subject, to see how things were working out in practice and whether the Work programme was delivering on its promises. As a result, we carried out a further inquiry into the experience of the people on the Work programme; as that inquiry progressed, we realised that while the programme might be delivering sustained job outcomes for some people, it was not effective in helping those who have major barriers to work, such as those who are homeless, have drug or alcohol problems or, in particular, have a disability or health problem, diagnosed or undiagnosed.

The report is therefore called “Can the Work Programme work for all user groups?” The question mark is important. In short, the answer is no. To be generous, I could say that the answer is not yet, but there would have to be major changes to the way in which the contracts are delivered, and to how the differential pricing structure works, if the Work programme is to begin properly delivering job outcomes for those with the highest barriers to work.

My Committee’s starting point was one of broad support for the programme’s policy intentions and innovative approach. It was a replacement programme—a single one, instead of all the various welfare-to-work schemes introduced by the previous Government. It was to focus on sustained job outcomes and to be a payment-by-results system. Elements such as the differential pricing structure were meant to encourage providers to focus on those who were furthest from the world of work, not just those who were easiest to help.

There was also to be a prime provider model, in which large providers—predominantly from the commercial sector—would bear most of the financial risk of operating in a results-based system, but draw on the expertise of a wide range of subcontractors to deliver services, in particular to meet the requirements of jobseekers with more complex needs.

The debate is timely, in that the Department for Work and Pensions has just published its latest set of statistics on Work programme performance; it is the third set of statistics, covers the period between July 2012 and June 2013 and was published at the end of September. The statistics bear out the conclusion of our report: the performance levels for mainstream jobseekers have continued to improve—some commentators say that they are plateauing, but they have improved after a shaky start—and are now above the Department’s minimum performance levels.

For those claiming employment and support allowance, however, the results remain very poor: only 5.8% get work, which is way below the minimum performance levels, set at 16.5%. Only six people out of every 100 in that group are getting a sustained job. In fact, for that group of claimants—the group that the Government said they would not leave languishing on benefits as the previous Government did—the Work programme is delivering a worse outcome than the previous, specialist welfare-to-work programmes for the recipients of incapacity benefit, such as pathways to work.

Pathways to work varied in different parts of the country, but the programme had job outcomes of between 10% and 30%. The coalition Government, on coming to power, said that those results were simply not good enough—but if the 30% was not good enough, the 5.8% must be a cause for shame. That is why our key conclusion was that differential pricing had not had its intended impact. Creaming and parking persist, and we believe that segmenting jobseekers into payment groups according to the type of benefit being claimed is proving ineffective. We also have concerns about how the prime provider model is operating in practice, having heard evidence that smaller niche providers with the experience to support more disadvantaged jobseekers have received far fewer referrals than anticipated, and in some cases none at all.

Our inquiry was hampered by a lack of transparent data. We were unable to assess from official statistics the level of specialist advisers’ involvement in the programme, or how effective those providers are. Publishing official referral and performance data at subcontractor level would not only aid effective scrutiny, but facilitate the development of a more effective welfare-to-work market.

As this debate is about the Government’s response to our report, I would like to turn my attention to some of our concerns about the process for formulating Government responses. The quality of the Government’s response is poor and includes some perfunctory responses to individual recommendations. There is no explicit indication of whether the Government agree with the overall thrust of the report. Some of their actions suggest that they share at least some of the Committee’s concerns, but that is not mentioned in the response, or is mentioned only perfunctorily. I will give a few examples.

The current consultation on Work programme statistics, which accepts the need for the Department to improve the scope and clarity of official data, is not mentioned. The response alludes briefly to a pilot in which Work programme participants who are undertaking or recently undertook treatment for drug or alcohol dependency attract increased outcome payments. That is exactly the sort of pilot we recommended. Clearly, the Government share to some extent our concern that the Work programme pricing structure does not sufficiently incentivise providers to help some groups of harder-to-help claimants. A fuller description of the pilot and how it will be evaluated would have been appropriate. We are aware of a further pilot that tests closer working between the Work programme providers and treatment programmes to support participants with a history of drug or alcohol problems, but that is not mentioned at all in the Government’s response.

The response gives the strong impression that no official in the Department for Work and Pensions has read the report in full. In some cases, it addresses only the text of the individual recommendation paragraphs, instead of engaging with the preceding evidence-based discussion and argument in our report. A particularly egregious example is the Department’s reply to the Committee’s concern that smaller specialist providers seem not to be involved in the Work programme to the extent anticipated. The Department states:

“In fact, the latest stock-take of the Work Programme supply chain shows that 43% are from the voluntary and community sectors, and charities.”

That sounds good, unless our report has been read. The official who drafted that sentence seems ignorant of the fact that in the paragraphs preceding the recommendation the report casts serious doubt on the usefulness of that stocktake exercise. It notes evidence that many organisations included in the 43% cited by the Department for Work and Pensions have received no Work programme referrals at all.

The report highlights the results of a BBC “Panorama” survey of voluntary sector organisations listed as Work programme subcontractors, but 40% of those organisations did not even consider themselves to be part of the Work programme when they were approached, and 73% had received fewer referrals than expected. The stocktake seemed to us to be merely a list of organisations named by prime contractors as being part of their Work programme supply chains, regardless of whether those organisations have received a single client via the Work programme. It was clear from evidence to our inquiry that the stocktake tells us nothing about the availability of specialist support within the programme.

We had other concerns about responses to some of our recommendations. The response to our recommendations on minimum performance levels does not engage with the Committee’s concern that the Government’s calculation of minimum performance levels seems to be based on unrealistic economic forecasts made prior to the launch of the programme. Paul Lester’s independent review, which the Department holds up as evidence that it has dealt with this issue, seems to have concerned itself only with how data on performance are presented, and not with how more realistic performance expectations can be calculated.

The Department’s primary concern seems to be that performance in year one of the Work programme looked low to commentators and the media. Our concern, which was not addressed in the Government’s response, was that performance was in fact low—it did not just seem low; it was low—when measured against the Department’s unrealistic expectations.

This is fundamentally important in a payment-by-results programme. If contractual performance expectations are set too high, they risk starving providers of funding, with inevitable consequences for service delivery. Our recommendation that the Department explore, with independent experts, new methods for setting minimum performance levels that are more responsive to economic conditions and can be more transparently calculated and applied deserved a more considered response from the Government.

We also made recommendations about jobseeker segmentation. It is clear that the Department knew from the outset that segmenting participants predominately by benefit type and using that as the basis for the differential pricing structure was a risk. Everyone accepted that benefit type was only a very rough proxy for claimants’ level of need. There is now strong evidence that segmenting claimants in this way ignores important information that is crucial in making an accurate assessment of claimants’ distance from the labour market. Participants most at risk of not having their needs recognised or addressed include homeless people, those with unrecognised health or disability-related barriers to work, and people with a history of drug or alcohol problems.

The Department says it is

“currently exploring whether we can more effectively identify and segment those claimants who are likely to be particularly difficult to help back into sustained employment.”

However, more details about the Department’s work and the approach it is considering would have been appreciated. We believe it should pilot an initial assessment along the lines of the Australian jobseeker classification instrument, testing its effectiveness in jobcentres. We hope that in that way the specialist help will go to those who are furthest from the labour market.

Another recommendation was that the money that was returned to the Treasury because of the year one underspend should have been redirected to the Work programme. Due partly to the underperformance I have referred to in terms of the data, £248 million was unspent in year one of the Work programme. That could have been used to address some of the programme’s clear shortcomings over the course of the current contracts. The recommendation received the most dismissive of responses. The Department simply told us:

“All in-year under-spends are returned to Her Majesty’s Treasury.”

That might be a statement of fact, but it is despite the then Minister telling us in oral evidence that he had entered into discussions with the Treasury on that very point.

Our view is that it was short-sighted not to use that money to help those jobseekers who are currently being failed by the Work programme. The Government should not lose sight of the fact established by Lord Freud in his 2007 review of welfare-to-work that well-targeted and effective employment support for those furthest from the labour market has the potential to achieve large savings for the Exchequer in the long run.

We welcomed the establishment of a best practice group looking at minimum service standards, which are so vague in some cases as to allow providers virtually to ignore some Work programme participants, if they so chose. However, it is unfortunate that the Department appears to have ruled out a single set of core minimum standards on the grounds that it would in some way inhibit providers’ ability to innovate—the black-box approach, I suppose. We simply do not agree. It is perfectly possible to establish core minimum standards that offer all participants protection and service assurance without being overly prescriptive about the services providers offer.

There is no attempt to address the problem of high adviser case loads. Average case loads are between 120 and 180 participants per adviser, which is far too high to allow an acceptable level of service for all participants. Advisers have no choice but to prioritise certain participants to support. The Department’s response to our recommendation that it, together with providers, consider ways of reducing case loads amounts to fewer than four lines of text. Its assertion that compliance monitoring officers

“provide assurance of service delivery at individual claimant level” is simply not plausible. Addressing high case loads means finding resources for more advisers or offering alternative provision for some participants. It is not just that the differential payment structure is not delivering for those furthest from the labour market, but that an assurance of service quality is not built into the system, which makes it clear why many advisers are not working with those who are most difficult to help.

The Committee also took evidence about the Merlin standard. Much of it was from subcontractors, many of whom felt they had been unfairly treated by primes. Most had received far fewer referrals than they had been promised; some had received none at all. A number had withdrawn from the Work programme altogether. Many felt that, far from shouldering the burden of financial risk, prime contractors were passing the risk involved in payment by results further down the supply chain. We are concerned that the Merlin standard—the regulatory regime intended to monitor the quality of supply-chain relationships—appears incapable of addressing these very real issues. A review of the Merlin standard is necessary, so we welcome the news that the Department for Work and Pensions, together with the Merlin advisory board and the accreditation service provider, is seeking views from across the sector on the regime’s effectiveness to date. Our strong view is that changes are required to strengthen the regulatory regime.

What should be the future shape of the Work programme? The Committee’s key conclusion—that the programme as currently contracted has the potential to work well for relatively mainstream jobseekers, but that it is unlikely to do so for those facing more severe barriers to employment—has been borne out by the published data, and particularly the most recent data. In line with our conclusion, the Employment Related Services Association—the welfare-to-work industry body—openly accepts that the programme is not working well for disabled jobseekers.

Clearly changes are required. The Government must decide whether improved support for disadvantaged groups can be achieved through changes to the Work programme’s design, pricing structure and payment model, or whether alternative, specialist programmes are required, so that appropriate support is available for everyone who requires it.

Work programme 2, or whatever programme or collection of programmes replaces the current contracts, will need to be in place by 2015. No doubt the Department is beginning to consider its options. It would have been a good start if the Government had engaged properly with the recommendations in our report.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy 3:14 pm, 10th October 2013

It is a pleasure to serve under your chairmanship this afternoon, Mr Walker. It is also a pleasure to follow the Chair of the Select Committee, who has shown a great interest in this subject, as has her Committee. This is a weighty report, which I am sure the Department will take very seriously.

It is worth clearly stating that there are success stories in the Work programme that we should all acknowledge. Yes, there are issues to be dealt with, and that is the nature of a programme that is as ambitious as the Work programme. However, we should acknowledge the success.

We should also acknowledge—this has been acknowledged by the National Audit Office, for example—that the fact that the statistics were collected at a very early stage has resulted in media stories claiming that the programme has failed. It is worth noting that, of those individuals who have completed the 104 weeks—the first cohort—about 41% are still in employment, which is a significant figure.

It is also important to understand that we—I say “we” because I feel passionately that the coalition Government should be proud of the Work programme—are delivering this programme in the context of the austerity facing the public finances. Yet, it is delivering job outcomes at a rate that is beneficial to economies such as that in my constituency. More importantly, success is being delivered at a cost that is significantly below that of the predecessor schemes. For example, the average cost under the Work programme is about £2,097, compared with about £7,500 under the previous programme.

Photo of Anne Marie Morris Anne Marie Morris Conservative, Newton Abbot

Does my hon. Friend agree not only that we have the cost benefits to which he alluded, but that, despite the criticism that the programme did not meet its targets, those targets have been better met than the targets set by the previous Government in their schemes?

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

That is a fair point. When people try to score political points on this issue, it is worth bearing in mind that the performance of the previous programmes was not as good as what we are seeing under the Work programme.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions)

I will have something to say about the performance of previous programmes if I catch you eye later, Mr Walker. However, I want to pick the hon. Gentleman up on his point, which I agree with, about the programme’s performance at the beginning being particularly disappointing. With the benefit of hindsight, would he agree that the cliff-edge approach of shutting down the previous programme and immediately trying to set up the Work programme—inevitably, it took many providers quite a long time to get going—was not a good way to go about things?

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

In view of the fact that we were looking to shake up the way we were supporting people into work, I am not sure there was any other way around that. The summary to the Select Committee report highlights the fact that it was an achievement on the part of the Department to deliver the Work programme so soon after the announcement in Parliament and after the legislation was passed. Despite the circumstances, the programme was delivered.

The key problem with the statistics that people originally looked at is that there is a natural delay in the system before we can talk of a positive outcome in terms of generating a job for somebody. That delay has allowed the statistics to be used to try to make a political point about the programme. I know for a fact that the trade body representing Work programme providers has been particularly annoyed and upset at the way in which some of the statistics that have been released, which often have not indicated the time lag in the programme’s performance, have been used to try to make a point about the way the programme is performing.

Another interesting, key point highlighted in the report’s summary is about the importance of the relationship between Work programme providers and jobcentres. That relationship is highlighted as a weakness of the programme, but I have to say—I can speak only from personal experience in the area I represent—that one of the key factors behind the success of the Work programme in north Wales has been the positive relationship between jobcentres and Work programme providers. A key recommendation in the report is that different areas of the country, with different providers, should learn from each other. If providers in other parts of the country are having difficulties co-operating with their local jobcentres, and they want to learn some lessons, they are more than welcome to come to north Wales, where the relationship is working particularly well. That is not to say that the figures in north Wales are particularly good, but I will come to that, because there are problems facing the programme in different parts of the country that are not necessarily of the programme’s making. That is something I need to put on record.

Another point I want briefly to touch on is whether the Work programme can support all user groups. One of the programme’s crucial successes is in supporting young people back into employment. We have a youth unemployment problem, although it is not as bad as in some other European countries, and we should be thankful for that. There is no doubt that the youth contract and the financial support we offer employers to engage with young people looking for a job who are on the Work programme have been a success.

The report also highlights the fact that there is sometimes a lack of publicity, and of appreciation of what is happening and the support available to employers who want to recruit young people and to understand the Work programme. There is an obligation on Members of Parliament to highlight the support that is available. It does not matter what political party a Member represents; they will obviously prefer the Work programme to be a success. I wrote to hundreds of businesses in my constituency about the Youth Contract, highlighting the financial support available for young people on the Work programme who were job-ready, and willing and able to work, and explaining that if there were opportunities in those businesses the Work programme providers were ready and willing to help. I am glad to say that the initiative resulted in at least 20 young people securing jobs; I know that because employers have contacted me.

That might be a small contribution, but as well as highlighting failures politicians have an obligation, where there is lack of publicity or understanding, to let employers know what support is available; because they are the ones who create jobs.

We have identified those under 24 as needing particular support, because of the challenges that they face in getting access to work. As everyone knows, it is easier to get into a job from a job. A young person without experience on their CV needs support to get a position. The Youth Contract has been a significant benefit to many young people, certainly in my part of the world, but perhaps there is a need to extend such support to other hard-to-reach groups. I have been keen to support young people looking for jobs in my constituency, but I am also aware that the average age of my constituents is among the highest in any constituency in the country, and certainly in Wales. A significant problem that we need to re-examine is how proactively to help those over 50 who are desperate to work. They may, despite having skills, have been out of the job market for some time. There is an argument for something similar to the Youth Contract, if funds permit at some point, to support those people. Perhaps we need to persuade employers that there is an advantage in recruiting such people from the Work programme.

Photo of Anne Marie Morris Anne Marie Morris Conservative, Newton Abbot

My hon. Friend makes an extremely good point. There is a challenge for older people who have been made redundant. Does he agree that an area in which the Work programme could do better is in helping to provide advice and support to those who could think about self-employment? That seems appropriate for the older person. The all-party group on micro-businesses did a survey showing that only half the Work programme providers could provide such advice and support.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

I agree entirely with my hon. Friend. One of the strengths of the Work programme in rural Wales is the fact that providers have been able to vary their targets for attracting people to self-employment. Originally, the significant targets for self-employment were given to providers in south Wales. However, statistics clearly showed that the self-employment option was not doing well in south Wales, but that in rural and north Wales there was considerable interest in taking that route. There is a significant amount of support available from Work programme providers, but, more importantly, there is flexibility in the system to allow the numbers to be switched, and that has benefited many in my part of the world.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions)

The hon. Member for Newton Abbot raised an interesting point. Does the hon. Gentleman agree that it could be useful if eligibility to the new enterprise allowance were to be extended to participants in the Work programme? It is not available to them at the moment.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

That, indeed, is one of the recommendations that I would make to the Department. I have been a key advocate of the new enterprise allowance. A long time ago I was an adviser to people starting out on the old enterprise allowance scheme. There are still businesses in my constituency that were established under that scheme. It is important to provide such joined-up support.

I am not making a criticism; Work programme providers are giving valuable support in my constituency to people interested in self-employment. I appreciate the fact that they have developed strong relationships with local enterprise support providers, which is very important; the black box approach is a key issue for Wales. I agree that it would be helpful if the new enterprise allowance were available, especially when there is flexibility in the programme to allow figures and targets to be swapped between different parts of the country. We must not put barriers in the way of people who want self-employment.

Flexibility is a key part of the Work programme. There is no such thing as a standard client. That flexibility is crucial for reaching those who most need support and are most difficult to place. Work programme providers in various parts of the country have sometimes got access to quite specialist support services for individuals, to ready them for the jobs market, and often that support has been partially funded through European funding. For example, the European social fund has enabled some providers to refer Work programme clients to support schemes to make them more work-ready. The Welsh European Funding Office, an arm’s length body fully controlled by the Welsh Government, has decided not to allow Work programme clients access to any programme partially funded by the European social fund. That has been a great barrier to the black box approach. Indeed, Work programme providers in Wales that I have talked to—and certainly the two operating in my constituency—have been unable to get support for their clients that is available elsewhere. That might be support with numeracy, confidence-building or skills, but the providers are not allowed to refer clients to the programmes because of a decision that in Wales if a project is funded by the European social fund the support is not available to Work programme clients.

That is a matter of huge concern. As the report highlights, Welsh performance levels are not as impressive as those in other parts of the country. It could be argued that the economy and employment level in Wales are not as high as elsewhere, but private sector employment growth there, while not spectacular, has been positive since 2010. An extra 69,000 jobs have been generated in the Welsh economy and there is less dependence on the public sector than for a long time. It is bizarre that people who everyone recognises need to be supported into work—and often the ones who most need support—are denied access to programmes provided by further education colleges and specialist providers, just because they are Work programme clients. I am happy to say that evidence from the Welsh Government and the Department for Work and Pensions to the Select Committee on Welsh Affairs, for its report on the Work programme in Wales, will highlight that discrepancy. It is worth pointing out that often the individuals who are worst affected by the decision not to allow Work programme participants to use the schemes may be exactly those who, according to the report we are considering today, are least well served by the Work programme. There is an issue for the DWP, but I also want the message to go out that the Welsh Government should carefully examine the reason why their definition of additionality in European funding differs so markedly from the one used in England.

I have written to small employers in my constituency; and I do not have many large ones. During the general election campaign the present Chancellor of the Exchequer, who was then the shadow Chancellor, wanted to visit my constituency. He asked for a list of employers with more than 500 members of staff, and I could offer him nothing but the local authority. My constituency is very dependent on small businesses; so I have tried to highlight the support available for small businesses from the Work programme. The other thing we have done in my constituency is to undertake a jobs fair, which was a success. We managed to get significant participation and, again, have seen positive outcomes in terms of jobs created. I said clearly to the local newspaper that if one person found a job as a result of the jobs fair, it was my time well spent. Two weeks later, we are up to seven, which is very positive, with another six interviews in the offing.

The key point from that meeting was the fact that a number of small businesses came up to me and said they were confused by the number of organisations telling them that they offered support. This is an important point that we need to get across: we have to ensure that the streamlined level of support and the understanding of what support is available is also part of the way in which we deliver the Work programme. The last thing we want is for employers to feel that it is too difficult to engage with such an important scheme as the Work programme.

My experience of the Work programme has been positive, but I am not somebody who says there is no way in which we can improve the system. We have had two years, and in my view, the programme is delivering well, but there are problems with specific groups who are being supported by it but are not particularly successful, at this point, in getting into employment. We need to look at such things as why there is a delay before somebody can be referred on to the Work programme. In many cases, the delay is because the job centre will be able to support individuals, because, as everybody knows, the opportunity for people to re-engage with the workplace is much higher when they have recently lost a job than it is after several months.

However, there is an issue about identifying individuals who might have specific barriers in terms of getting back into the workplace. Why would it not be possible for such people to be referred immediately on to the Work programme? I am not sure whether there would be a huge additional cost, but we would avoid the period in which somebody loses their confidence for a period because they are in the job centre system and perhaps feeling increasingly dejected as they are unable to get back into the workplace. When identifying someone as needing particular levels of support, it might be worth considering that such individuals could be referred to the Work programme earlier. If we have confidence, as I do, that the Work programme is adapting and meeting the challenges of helping people back into the workplace, the sooner we can refer some people on to it, the better. I would like people to consider that point.

It is also fair to say that the programme was established quickly. The Select Committee recognises that it was an achievement to get the contracts signed and the programme up and running so quickly, but there is always an opportunity to regroup and readdress some issues. I talk to providers in my constituency and yes, they are very enthusiastic about the scheme, yes, they are confident that they will deliver in due course, and yes, they are frustrated with some restrictions in a Welsh context, but one comment that comes out strongly is that the assessment of individuals based on the benefits that they currently claim is a blunt tool, in terms of identifying the required support.

I understand that the reason why that was the way forward initially was that we needed to get the scheme up and running, and obviously, we assess people in terms of what sort of benefits they qualify for. However, as we have more confidence in the providers of the Work programme—and increasingly, we are confident that in most parts of the country we have Work programme providers who know what they are doing—we need to have an increased level of understanding about individual clients’ needs. Ultimately, if there are barriers because of somebody being categorised for a particular benefit, and that barrier is stopping them getting the support they need, we should, at least, try to recognise that and address it in due course. There is an argument for looking carefully at the way in which we assess individuals in terms of the level of support that they need, rather the using the blunt instrument of the benefits that they are receiving.

We also have to look carefully at the fact that we are now coming to the end of the initial two-year period. Clearly, the aim and aspiration is that the vast majority of people in due course will find employment. Current figures show about 56% being returned to job centres and about 41% going into employment, while some have been lost, or have left the system in some way. That is not a bad performance—obviously, I would like to see a majority gaining jobs—but we need to start thinking carefully about what we do now. Do we extend the programme? I have talked to individual Work programme clients—and advisers—and what has been striking is that a number have said that it has taken them a significant period of time simply to rebuild their confidence, and to feel that they can face an employer across a table and try and sell themselves. The coalition Government and, certainly, the DWP need to think carefully about whether there is mileage in extending the Work programme for particular clients for longer than two years. The two-year period is, again, a blunt instrument, because it is one rule for all, despite the fact that we recognise that some individuals need more support than others.

Nobody would deny that we can look at ways to improve the system, but we should be doing so from the point of view of claiming that there are great success stories and significant developments in the Work programme that are helping people get back into employment. As politicians, we need to be constructive friends of the Work programme. Where concerns exist, we need to highlight them, but we need to do so in the context of acknowledging that with a significantly better value-for-money ratio, the programme is delivering support and delivering people back into the workplace. Can it do more? Of course it can. Do we want it to do more? Of course we do. Can the Government look at ideas about changing elements of the programme to be more supportive of those who find it most difficult to find employment? Yes, I think the Government should, but we should also recognise that to date, the programme is a success story. I only hope that that success continues and is enhanced, and if changes result in that enhancement being even greater, no one would be more pleased than me.

Photo of Debbie Abrahams Debbie Abrahams Labour, Oldham East and Saddleworth 3:36 pm, 10th October 2013

I apologise for being a few minutes late, Mr Walker. I had the debate down in the diary for 3 o’clock, but I am glad to be here.

It will come as no surprise that I take a slightly different view from the rosy one portrayed by Guto Bebb. In fact, my right hon. Friend Stephen Timms alluded to a different view in his remarks about the start of the programme. As hon. Members probably know, in spite of the difficult economic circumstances faced by the Work programme—which the report acknowledged—the levels of employment achieved through the programme in the first 14 months would have been achieved without it. For the first 14 months, therefore, it was not a success.

I want to focus on a number of points today. We need a 21st century welfare-to-work system that reflects not only our current economic reality, but the dynamic economy and flexible labour market that we need for the future. I am afraid that the Work programme fails in that regard on a number of levels. It fails, first, in terms of the efficacy of welfare-to-work providers, and I shall try and pick out a few points on that in a moment. Secondly, in contrast to the remarks made by the hon. Member for Aberconwy, it fails to address the growing number of long-term unemployed, and that was really the thrust of the message in our report. The Work programme is also not helping with the change in our economy. It is perpetuating a low-skill, low-aspiration economy. We need to ensure that a welfare-to-work programme complements the type of economy that we want, but it is failing to do so.

I shall focus now on the Work programme providers. We have seen a pattern across public services of private sector providers delivering public services, whether in the Work programme, in adult care, or, increasingly, in the NHS. I do not have a problem with that where private providers innovate, add value or capacity. However, I do have a problem where private providers put profit before people and the services that they deliver. When that is the case, I find it totally unacceptable. It is not acceptable that staffing levels in some Work programme providers mean caseloads of 120 to 180 jobseekers per adviser. It is not acceptable that advisers are not adequately accredited or qualified to fulfil their role. It is not acceptable—my hon. Friend Dame Anne Begg mentioned this—that small specialist organisations, which are disqualified from applying for contracts separately because they are too small and do not have the financial capacity to bid for them, are lured in and used as bid candy for contract bids, but are then not used. They have a track record of achieving success, particularly for jobseekers with specialist needs, but are not being used. It is not acceptable that there are no minimum standards other than job outcomes, that there is no effective regulation and that there is a lack of transparency of Work programme data, which prohibits effective scrutiny.

One of the Select Committee’s biggest concerns was that the Work programme is failing to address the growing number of long-term unemployed people, particularly young people. The Work programme was supposedly designed to cater for that through a payment-by-results system, with differential pricing based on the type of benefit that jobseekers received, but evidence received by the Committee shows that that is clearly not working, with those furthest from the jobs market being parked and providers creaming off those who are job-ready and easiest to place.

The Select Committee recommended a more holistic approach to identifying the barriers to work—for example, health problems or housing. A number of specialist providers cater for people who are homeless, and homelessness is an increasing problem. That comprehensive, more holistic assessment must be needs-based, and funding models must be developed that reflect an appropriate level of up-front funding.

Related to that, two years after the Select Committee’s report on the work capability assessment, which highlighted our growing concerns at the time, the Committee took more evidence that the WCA is not fit for purpose. One example involved a claimant with terminal cancer whose life expectancy was shorter than the WCA work-ready prognosis, but who had been referred to the Work programme. What is happening about that issue? It has been mentioned before. We are now two years on, but certainly in my constituency surgery, I frequently encounter such cases. Why are the Government not doing more on that?

I urge the Government to act now and undertake an immediate evaluation of the WCA, with a view to revising the assessment process into work-related and health-related components. That, too, was a key recommendation in the Select Committee’s report. It would identify the help that claimants with health conditions or disabilities need in order to get into work.

Let me move on to consider how we develop a welfare-to-work programme that will help to skill up our economy. The WCA is just one example of how the system is not fit for purpose. The Work programme, as the flagship welfare-to-work programme, is failing to help to develop a high-skilled work force. There are indications that opportunities to train beyond, for example, level 3 skills training are being denied to jobseekers. Instead of that type of training being supported, jobseekers are being told that they must attend the training provided through the Work programme and only that. Our welfare-to-work programmes must be more flexible than that. We must be developing our skills base, not restricting it. Just as our economy demands increased flexibility from our labour market, so must our welfare-to-work programmes be more flexible.

Finally, I want to express my concerns about the Work programme in the context of other welfare reforms. Last month, the National Audit Office published a damning report about universal credit. I see direct parallels in how the Work programme and universal credit have been developed and implemented. A key failing identified in the NAO report was the culture and leadership of the Department, which created what was described as a “fortress” culture. I hope that, in addition to responding to my remarks about the work capability assessment, the Minister can explain how she will deal with that culture and ensure that there is more openness and transparency in her Department.

Photo of Stephen Lloyd Stephen Lloyd Liberal Democrat, Eastbourne 3:45 pm, 10th October 2013

It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the Minister on her elevation. The question is, can the

Work programme work for all user groups? That is the nub of this debate. I share the broad views of my hon. Friend Guto Bebb and his passion for the programme. The Chair of the Select Committee, Dame Anne Begg, knows very well that I am absolutely passionate about the Work programme. One of the key things that got me back into politics was the whole issue of dignity of work and the challenge for the long-term unemployed, so I feel very strongly about the Work programme and I think that in many ways, despite its bumpy start, it is beginning to deliver and is making a significant difference for a lot of people.

The challenge—this is the nub of our report; this is what it focuses on—is whether the Work programme works for all user groups. My view is that, as currently configured, it does not, and I urge the Minister, in her concluding remarks, to deal with the specific issues that have been mentioned. The Department has already had an opportunity to respond to a number of the key recommendations, but I do not feel that it has responded properly.

In the first report, we clearly supported the principle of the programme, but we flagged up two key concerns. The first was whether the differential pricing would be sufficient to incentivise, and the second was whether the Work programme supply chains would be suitably managed to ensure adequate specialist services. The Work and Pensions Committee recognises, as we all do in this area, that for many people who either are a long way away from the job sector or have very specific impairments and disabilities, the best way to help them into work is for them to receive support from those very specialist and often quite small groups that really understand the issue. One of the concerns about the configuration of the Work programme was that we were not confident that the supply chain, when it came down to it, would include all those specialist groups. The Committee made a commitment to return to the Work programme a year later to see whether our concerns in those two specific areas had held water or had been dealt with.

Let us consider differential pricing. I am slightly frustrated about this, because before I came into politics, a lot of the work that I did with Governments of both colours—Labour and Tory in the old days—was in this area. The whole issue of creaming and parking, as the hon. Member for Aberdeen South knows, is old hat. It has been around a long time, so I was very hopeful that differential pricing would crack it, and that this time we would head towards the sunny uplands. Unfortunately, that has not happened, or not to the extent that I would have liked. I need the Government to address that. I need the DWP to be quite fierce about it with the Work programme providers.

I shall give a local example. In Eastbourne, my constituency, the first tranche of those who unfortunately are called two-year returners are coming through the sausage machine. I have had a meeting with a number of the local training providers. Like my hon. Friend the Member for Aberconwy, I work incredibly closely with my local training providers, the chamber of commerce, Jobcentre Plus—you name it—and I am discovering that a fair number of those individuals have had very little support indeed. I am talking about a couple of face-to-face meetings in two years, and then follow-up phone calls. They have been parked. The reason why I am so hopping mad about it is that under the Work programme, those individuals each had a £600 attachment fee. I want to go to the local Work programme providers—my subcontractors, as it were—and, on behalf of the Department for Work and Pensions, claim back £550 per person so that I can feed it into other training operators and get those people jobs. There are issues with differential pricing.

My hon. Friend the Member for Aberconwy talked about benefit versus impairment. I agree strongly—it was one of the recommendations in the report—that how benefit is assessed needs revisiting. I am not urging the Government to revisit the attachment fee at present; however, I do not believe that Eastbourne is any different from any other part of the country, other than that it is the sunniest town in the UK, and for some early people there, the attachment fee has not been used properly. I am disappointed that in some instances, the primes clearly used specialist providers on the list to help them get contracts, but did not use them properly after that. The DWP must look closely at that.

I do not want to tar all providers with the same brush. Like everything else in life, there are good ones, middling ones and bad ones. One thing that I liked about the business model for the Work programme is that the DWP and the Secretary of State always said to us that as time went on, the better Work programme providers would be rewarded and the worse ones penalised. I want to see that happen, and I want the Department to be absolutely vigorous. I am quite prepared to have competition in this challenging and difficult area, but I want it to be genuinely robust, so that better Work programme providers are rewarded and worse ones are not.

The other challenge that we face is helping people with disabilities back into work. I am disappointed—every Government has failed on this issue—but I share the view of my hon. Friend the Member for Aberconwy that we will get better at it. I feel strongly about it. It is difficult. If someone has been out of work for 10 years with a mental health problem and is in the Work programme, it is hard for them. Anyone who says that it is not is in denial. I appreciate the challenge, but I am disappointed that 90% of people with a disability do not succeed in getting a job through the Work programme, and only 6% of those on ESA get a job. I know the issue well, and I know how challenging it is, so I will not jump up and down on the Government, but I demand that we do it differently. All of us—the Select Committee on Work and Pensions, the Opposition and Government Members—know that it has been a crime. It is a waste of human capacity and ability. I urge the Minister, in her response, to take on board the fact that more needs to be done on disability and helping disabled people into work.

Our report made numerous specific recommendations, as the Chair of the Select Committee mentioned. I will focus on two, to keep it simple for the Minister when she responds—the two that the Government did not address. The first was on the accuracy of the work capability assessment. To quote the report, the Committee

“heard some quite shocking examples of participants referred to the Work Programme who had clearly been incorrectly declared fit for work following a WCA. We recommend that DWP work with providers to agree a process by which participants whom providers believe are clearly unfit for work can be referred back to Jobcentre Plus.”

However, we also recognised that a system was needed so that providers could not game the system by saying, “These people are too difficult; send them back to Jobcentre Plus.”

We saw that the situation would get worse, and it has. The coalition Government have done a lot of work around the Harrington report, so it is better than it was a few years ago, but the number of people coming down the pipe is huge compared with a few years ago, so I do not believe that that is good enough. I never had the automatic loathing of Atos that a lot of my constituents and the media have, because I know that we are talking about a difficult task—and, frankly, Atos was appointed by the previous Government. I had hoped that after the Harrington report, Atos would improve and fewer clearly unsuitable people would be passed. The situation is not good enough. I have come to the point where I do not think that Atos is meeting its contract to a level with which the Government should be satisfied. I urge the Minister to take a serious look at that provider. I am seeing too many personal cases.

I have been involved with disability for many years, and if someone with a disability says, “I have a disability; I can’t work,” I have no problem telling them, “Yes, you can. Have you tried it?”. I am quite firm about it, but I get extremely angry when I see what has happened in my constituency over the past 18 months to some people who are clearly not fit for work. I even send one of my casework officers to tribunals more often than not. The Government must address that seriously.

The other recommendation to which the Department did not respond involved provision for unsuccessful participants. I have already mentioned the people coming down the pipe after two years—two-year returners. As the Chair of the Committee will know, we identified them as a concern. I remember personally addressing the Secretary of State about it a year or so ago, and asking for confirmation that a proper system would be in place to manage the people who had not got a job after two years and to keep them going in the direction of travel to get a job, rather than just emphasising their sense of failure. I was given an absolute commitment that the JCP would have a set of programmes ready, but it does not. Things are patchy.

Again, I acknowledge the comments made by my hon. Friend the Member for Aberconwy. Certain JCPs are working well—to be honest, mine are; I get on extremely well with the middle managers there, who work extremely hard—but there is no systemised process, which means that there can be a rubbish service in one constituency because there is no systemised instruction from on high, and a good one nearby because an MP or councillor is enthusiastic about it, or the JCP has a good manager. We must get service provision up to speed right now. I had 31 cases three weeks ago and 12 the week before that, and I have 26 coming down next week. They are beginning to come out of the pipe.

I have met a lot of people who have been on the Work programme and did not succeed in getting a job. Hon. Members will be unsurprised to learn that their emotions vary from enormous rage to a sense of deep shame, depression and so on. I understand that. If I were them, I would be feeling all those things. This is a crucial challenge, to which I urge the Minister to respond in a way that makes me confident that the Government will do some serious thinking about how they can make a difference in helping those people into work.

I will share something that I am doing in Eastbourne, because it might help. Forgive me, but I am liberal: I do not buy and never have bought the concept of the workshy poor. It is dim and ignorant, and it shows no understanding of what things are like. That does not mean that I believe everyone out there is perfect—it does not work like that—but I know that if I had not worked for three or four years, my self-worth would be extremely low. I would almost certainly be taking some nonsense that the doctor had given me for depression, and I would be anxious and nervous about getting a job. The last thing that I would want to be told is that I was workshy vermin and that the only thing that would work was for me to be forced to get a job.

If the Government told me that I had to employ those people, as a good orange booker and someone who has employed dozens of people over the years, my first thought would be to tell them, in words of few syllables, to get stuffed. That is not how things work; this is a free country. I would say, “I am an employer and I am not going to take on these people who have not worked for five years.” To help those folk to get a job, we need to make a difference. We need to step up to the plate as a country, a nation and a Government.

I will tell the Minister what I am doing in Eastbourne. Straight after the election, I launched “100 apprenticeships in 100 days”. I had it all organised because I hoped I was going to win, so I was the first new MP to get going, and the programme has been a huge success. We got 181 apprenticeships in 100 days. The latest figures show that there are 2,500-plus Eastbourne apprentices, and that unemployment is down to 3.9%. I am pounding the town and I have everyone on board in a big tent—I even have Tories in the tent—all working to transform the economy of the town and get people jobs.

Over the past few months, I have begun to meet the people who did not get a job in the past two years, and they are a challenging group. I would be the same if I had not worked for years. I am going into town and saying, “I want 100 work experiences in 100 days”, because the only way that those people will have a prayer of getting a job is with work experience. There will be people who used to be employers. An employer will not employ someone who has not worked for five or seven years—they are not a charity—but if that person has work experience and has done 100 hours’ work experience, that will give them discipline and perhaps tick a few boxes for an employer.

The scheme will work, as long as the MP and the whole town go to employers and say, “Do it for Eastbourne. Do it, not because they’re losers, but because they are our friends and neighbours. They are our family, for God’s sake. Let’s do it because we are all in it together”—excuse me for misquoting the Prime Minister. In fact, I am certain that it will work. I start in a couple of weeks and I look forward to coming back to the DWP and saying, “Listen, this is a way we can make it happen. Please, for the love of God, don’t either say you are going do something and not do it, or demonise this group.” Yes, I know that there will be people who game the system, but the majority are people who feel, for one reason or another, that they are failures. What is happening is just not good enough and I have had it up to here.

I have addressed a few issues to which I would like the Minister to respond. In this very partisan place—I am not very keen on partisanship, but that is probably because I am from a business background—the Work and Pensions Committee was pretty united over this issue. Even when we disagreed, we understood and supported the basic premise of the Work programme, but we want to make it better. We want to make it work, not only for the group of people who, after losing their job, are turned around quickly, but for the challenging group of people who have been stuck for a long time, and for the tens of thousands of people with disabilities, who have tremendous resources and skills to give to the country, which we need. If we do not give the right level of support, we will have failed, despite successes at getting those at the top end into work.

Finally, this debate is important, and not only in this place. The topic exercises the views, personalities and thoughts of literally millions of people. The Select Committee produced a good report. I look forward to the Minister’s response on some of the areas where I think the Government can do better.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions) 4:04 pm, 10th October 2013

I apologise for missing the first minute or two of the debate. I very much welcome the Select Committee report and the telling observations made by the Chair of the Committee, my hon. Friend Dame Anne Begg, in her opening speech. I also welcome the contributions from the other members of the Committee—my hon. Friend Debbie Abrahams and Stephen Lloyd; and indeed from Guto Bebb.

I share the Chair’s disappointment that the Government’s response was so cursory and did not address many recommendations fully, but we cannot blame the new Minister for that. I warmly welcome her to her new role. I congratulate her on her appointment. I look forward to debating these matters with her in the coming months. I hope that we will get a little hint from her this afternoon that she recognises the extent to which the Work programme is underperforming at the moment and the fact that it needs change, as the hon. Member for Eastbourne said. I am not denying that good things are happening in the Work programme, but it is underperforming and needs change. We need to look for a major change when the current contracts end.

The hon. Member for Eastbourne talked about those who had left the programme. There were 74,630 people referred to the Work programme in its first month, June 2011, but 53,720 of them returned to Jobcentre Plus after two years without a job. That is a disappointing outcome after two years’ effort. The hon. Member for Aberconwy is right to say that the Work programme got off to a slow start, which was predicted and could have been avoided, but unfortunately was not. I hope that we will see a significantly better performance over the coming months, but of those referred in that first month, more than 50,000 were badly served, with a few of them getting only a couple of face-to-face meetings and a phone call or two, as the hon. Member for Eastbourne described. I am sure that is part of the reason why we saw such a big rise in unemployment at that point.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

According to House of Commons Library figures, 96,000 participants have completed 104 weeks, of which 54,000 have returned, meaning that 40,000 have gone into employment.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions)

The numbers I have are slightly different, but we can look up the figures. Certainly, 50,000 people spending two years going back to the jobcentre is a disappointing start, but I hope that we will see better figures in future.

I was struck forcefully by something that the Chancellor of the Exchequer said in his spending review statement about the task facing the Secretary of State for Work and Pensions. He said:

“That will require a difficult drive for efficiency, and a hard-headed assessment of underperforming programmes.”—[Hansard, 26 June 2013; Vol. 565, c. 314.]

The Select Committee is right to address key issues underpinning the underperformance of the Work programme identified by the Chancellor. The Centre for Economic and Social Inclusion has been commissioned to carry out the official evaluation of the Work programme, and I think that it will produce an interesting piece of work. In its analysis of the 26 September on the most recent performance data, it points out that two years in, the Work programme is not performing as well as the flexible new deal. The percentage of those over 25 entering the programme who secured a job in two years is 35%; it was 38.9% under the flexible new deal. The Minister’s predecessor but two used to castigate the flexible new deal. It turns out, according to CESI observations, that it was better than the current programme.

One thing that would help, and that the Minister could do quickly, would be to lift the ban on providers publishing data about what is going on in their areas. The ban was introduced—let us be frank—to safeguard the career prospects of the then Minister who introduced it, to whom I recall that the present Minister was Parliamentary Private Secretary, and in that it was successful. The right hon. Gentleman was promoted to his current post in September 2012 and a few weeks later we saw the first Work programme performance data, by which time he was safely off the scene. The ban means that information about what works well has been disseminated much too slowly and the underperformance that concerns the Chancellor, and I suspect all of us, would have been less if providers had been free to publish their performance data, as they were in the past.

The Government’s “Open Public Services” White Paper says:

“To make informed choices and hold services to account people need good information, so we will ensure that key data about public services, user satisfaction and the performance of all providers from all sectors is in the public domain”.

Actually, we had a complete ban on any data at all for the first 18 months of the Work programme. There are still no data, as the Select Committee has pointed out, about subcontractor performance. The “Open Public Services” White Paper, published by the Cabinet Office, uses the phrase

“all providers from all sectors”,

but we have still had nothing at all from the subcontractors. From that quote, I want to pick up the point about user satisfaction, which the Select Committee report also mentions. The Select Committee called, quite rightly, for regular surveys of user satisfaction on the Work programme, which would be valuable information. The

“Open Public Services” White Paper had an effusive foreword written by the Prime Minister and the Deputy Prime Minister, in which they signed up to its goals. We should understand the user experience on the Work programme. The Government’s response to that recommendation is simply to tell us that there will be a couple of surveys of people who have been on the Work programme. That is not what the White Paper stated was going to happen. There should be much more information about what people are experiencing. The fact that there is not is one of the reasons for the underperformance that the Chancellor has pointed out.

The hon. Member for Eastbourne was absolutely right to highlight concerns about the performance of the Work programme for people on employment and support allowance. The Work programme invitation to tender stated that if nothing was done, 15% of those people would find a sustained job outcome within two years. The minimum performance standard was set at 10% above that, which is 16.5%. Paragraph 3.18 of the invitation to tender states:

DWP expects that Providers will significantly exceed these minimum levels.”

They have actually achieved, as the hon. Gentleman stated, 5.8%. The Royal National Institute of Blind People tells me that 690 people with sight impairments were referred to the Work programme in its first 22 months, and 20 of them got sustained job outcomes. St Mungo’s has sent us a briefing for the debate, which tells us that 54% of homeless people surveyed for St Mungo’s, Crisis and Homeless Link reported seeing their Work programme adviser once a month or less frequently. It is not surprising, therefore, that very few of those who face serious hurdles—people with health problems and people who are homeless—have got into work.

I was in Australia last week, where I talked to people about those issues. There are quite a few providers that operate both in Australia and in the UK, and they said that the Work programme model was wrong and that “creaming and parking” was endemic; the hon. Member for Eastbourne has touched on that. I agree with the Select Committee that specialist voluntary sector providers have not been used enough. They have been squeezed out. In Australia, I was told that 50% of provision is from the voluntary sector, and I think in the Work programme it is about 20% and going down. As others have said in this debate, some good resources are not being utilised. St Mungo’s is a very good example. It had a contract with several prime providers in London, which was signed when the Work programme started in June 2011. By April 2012 it had not had a single referral, and it had to pull out and give up.

I agree with the suggestion that we should have a proper jobseeker classification model, which we do not have at the moment. There are many things that should be said, but I will conclude with this. The Chancellor of the Exchequer is right: the programme is underperforming. The Minister, who I welcome once again to her new role, has the opportunity to address that underperformance. Some of it can be addressed quite quickly, and the Select Committee report can be a real help. I wish the Minister well in her new role and I look forward to her reply.

Photo of Charles Walker Charles Walker Chair, Procedure Committee

The Minister may now speak, but I will call Dame Anne Begg at 4.28 pm on the nose.

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions 4:14 pm, 10th October 2013

It is a pleasure to serve under your chairmanship, Mr Walker. I thank all hon. and right hon. Members for welcoming me to my new position, and I thank the members of the Liaison Committee for securing the debate. Can the Work programme work for all? I believe it can and it will. We are on a learning curve, and we have to make things better.

Hon. and right hon. Members will be pleased to know that I met all the providers this morning. I told them to watch the debate and listen to all the contributions, because the Work programme is work in progress, and there are things that they can take away from the debate. The comments of the prime providers are quite pertinent, particularly as Debbie Abrahams mentioned low skills and low aspirations. A representative from the Shaw Trust said that they had been working in the field for 35 years, and the system was the biggest and most rigorous ever; they had never been monitored or measured so much. They took great pride in what they were doing, the journey they were going on and how they were helping the most disadvantaged into work.

According to Serco, the Work programme must be viewed not over a year—that would not be correct, because it is a two-year programme—but within the five to seven-year cycle. A representative from Ingeus said that the work was about helping people, and that, fundamentally, individuals are being helped by people who care. They made the point that people who work in the profession chose it, they know what they are doing, and although it is tough, it is what they want to do.

I know that the Chair of the Work and Pensions Committee has to speak, but before I answer the many questions that have been asked, I want to emphasise what a massive step change the Work programme has been. It is bold and ambitious, and I want to set out the motivations behind it. When people ask, “Is it failing?” that is fundamentally the wrong question. To fail would be to do nothing at all. To fail would be to leave people on benefits without even reaching out to them. I believe that the fact that we are on a journey and we have to get it right must be the start of success, and the Work programme must not be viewed from a perspective of failure. We are on a journey together.

I take on board all the points that the Select Committee has made; some of them drive a hard message home, and we must listen to them. The Work programme is evolving as we speak. What did we have before the Work programme? Hon. and right hon. Members have talked about the performance of various previous programmes, but I have different statistics. Those programmes covered a different mix of claimants, using a different measure, in a different time frame. Pathways to work can be classed as a failure because they could not have been rolled out nationally; they would have had zero positive impact if they had been. The previous approach was piecemeal, and people tried and failed to get it right. We have to continue with what we are doing now and make sure it works.

The individuals who are on the Work programme are the hardest to help. When I looked at their journey, I saw that out of every 100 people who go on to jobseeker’s allowance, almost 90 will leave before they reach the Work programme. That core group of people—approximately 10 out of every 100—will end up on the Work programme. Those are the people whom we are trying to support, and it is a difficult task. I have talked about the length of the contract and how we are continually refining it. Our approach is about continual improvement; we have to work with it, monitor it, adapt it and improve it.

I can see that time is running short, and I must allow time for the Chair of the Select Committee, Dame Anne Begg, to speak, so I will move on to answering the questions. The Committee Chair talked about the annual underspend being held back, but the system does not work like that. We have negotiated a sum of money, and the programme is about performance-related payment on results. We have used some of that money to look at new pilot schemes, to see how we can expand our provision to incorporate people who have had prison sentences, for example.

When we talk about the flexibility of the system, we have to understand the people we are talking about well. I hate using such words, but there has to be multi-segmentation or multi-differentiation. We have to look at health and other conditions, including attitudinal factors, and anything that holds people back. We are doing that, not only with people who have been in prison, but with those who have had addictions. We are also helping and working with them, which adds to what we are doing.

The improvements made since the report came out are key, and I must acknowledge the work of my predecessor, my hon. Friend Mr Hoban, whose changes have had a significant impact. Since the report came out in November 2012, the results of the adaptations he made, including the new pilots, can be seen in the numbers that are coming through. We have a set of numbers going back a bit more than a year, and the figures have quadrupled in that time, so there have been significant changes.

I want to pick up a couple of points made by my hon. Friend Stephen Lloyd. He mentioned the attachment fee, but there is a fundamental misunderstanding about what it is and what it is for. It was designed to provide cash flow in the early years to get businesses going and to support providers, but that money was only ever given on the basis of payment by results. There was therefore nothing that, as he would see it, could be moved round or taken elsewhere. I needed to state that, because that involved a fundamental misunderstanding about how the system works.

My hon. Friend is quite right that we in the coalition Government are doing the right things. He mentioned relations between employers, employees and the Government, and people must understand what we can do as the Government, what employers can do to provide jobs, and what I hope employees can do. We are actively engaged in a two-year Disability Confident campaign with 430 employers across the country, including 35 of the FTSE 100 companies. It involves asking what we can do, and we should all get involved with it. From the point of view of spending, people talk about the figure of £80 billion, and the purple pound or the disability pound. We should ask what companies can do, including with would-be employees and their families and the extended community. That is something we are looking at, and it is positive that 1.4 million new private sector jobs have been provided, as have 1 million new apprenticeships. It needs to be put on the record that everything my hon. Friend is doing in Eastbourne totally reflects what the coalition Government are doing.

My hon. Friend Guto Bebb mentioned a key point about how we can help people in north Wales who would not otherwise receive full support, and how we can ensure that we are not preventing people from receiving additional support. We are actively involved with and talking to the devolved Governments to see what can be done. The key factors are flexibility and engagement with employers, as well as getting segmentation to work, so that individuals’ particular needs are given support.

Another key factor is the new enterprise allowance and how it fits with the Work programme—a point that has been mentioned. It does work, although not exactly in the same way. There is flexibility in the Work programme, so support can be given by providers to encourage people to set up in business. I wanted to ensure that that was the case and, fortunately, because this is fundamentally about people, I have some examples. They both involve people called Emma, so if someone’s name is Emma and they are on the Work programme and want to set up a business, it looks as though they have a high chance of success. Emma King said that she had never thought about setting up in business before, but now has, having been supported by A4e. Her goal now is to get other people like her into work. Emma Thompson, whose home is in Anfield, has said that if she had not met Dawne, who helped her through the Work programme, she would not now have her own business and would not be on a totally different path, one on which she feels she has self-esteem and self-confidence and can look after herself.

Another key point made by the hon. Member for Oldham East and Saddleworth was about people’s low esteem in starting-off or primary jobs, but in most instances the process is about getting promotion from those jobs, and the question is what we can do to get people through that process. Getting a job is the start of a journey, but getting a better or improved job is another. Some of the people we have worked with—including young men who have just got a child, and who have never worked before or never had a job—have some very positive stories about how they have got on the ladder, got through the process and got a good outcome through their own drive and the support of the Work programme.

I am painting some of the positive stories, and it is correct to do so. We appreciate that some things have not worked as well as they might have done, but we have been on a journey together. As I said, this is the biggest ever programme of its kind, and it has taken time, effort and energy. We have used the whole notion of transparency, and decided to have a black-box approach, because that would give flexibility to providers, particularly at the start of their journey, so that they could better understand people’s needs and see what they could do with the money. However, there are measurements, processes and monitoring within the system, and because we need to reach out to those who are hardest to help, there is also a payment structure so that the most difficult to support get the appropriate amount of money. All that is being developed at the moment.

We therefore take it fairly and squarely on the chin when we are asked whether the Work programme is working, and whether we are working with the hardest-to-reach people. We are now asking people and key providers to get back to us on which issues they found the most difficult, and to tell us what support we need to give them. Yes, a lot is being done, but there is still a lot to do.

The Work programme is not perfect, but it is a major step forward in supporting some of those who are hardest to help. I want to make sure that the programme reaches its full potential, and I am committed to fixing the bits that do not work. Many questions to me today have been about whether we are committed to doing that, and we certainly are. Another question raised was about culture and leadership. Transparency is key, as is bold ambition, hard work and determination to reach out to those who most need our help, and I give a commitment to those things today.

Photo of Anne Begg Anne Begg Chair, Work and Pensions Committee 4:28 pm, 10th October 2013

This has been an excellent debate. We had extra time through starting early, but we needed that time, and might have used even more.

There has been quite a lot of agreement across the party political divide. Much of what Guto Bebb said reflected comments from members of the Select Committee. He waxed lyrical about the youth contract, which is not of course part of the Work programme, but helps to illustrate that there is a need for specialist help, including for more specialist help to be directed to certain people. Both he and my hon. Friend Debbie Abrahams said that there is a real problem with the rigidity of Work programme rules, meaning that access to training can be quite difficult, even when it is available. The Committee was certainly clear that such access is needed.

The hon. Member for Aberconwy mentioned that some people should have early referrals, but that would of course require a proper classification system, which was one of our main recommendations, while another recommendation was to extend referrals for some clients. Both Stephen Lloyd and my hon. Friend the Member for Oldham East and Saddleworth mentioned the failure of the work capability assessment. That and the differential pricing structure are simply making life very difficult for prime contractors, which is why it is so hard to deliver on the most difficult-to-reach group.

The Minister suggested that we are saying that the Work programme does not work for anyone, but nobody is saying that. It does work for many people. The examples she gave could have been given at any time in the past 15 years; the real test of the Work programme is not how it works for the easy to reach, but how it works for the most difficult.

Sitting adjourned without Question put (Standing Order No. 10(13)).