House of Commons Welsh Affairs Committee The Work Programme in Wales Third Report of Session 2013–14 Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/welshcom Ordered by the House of Commons to be printed 22 October 2013 HC 264 Incorporating HC 999-i, Session 2012-13 Published on 4 November 2013 by authority of the House of Commons London: The Stationery Office Limited £15.50 The Welsh Affairs Committee The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales). Current membership David T.C. Davies MP (Conservative, Monmouth) (Chair) Guto Bebb MP (Conservative, Aberconwy) Geraint Davies MP (Labour, Swansea West) Glyn Davies MP (Conservative, Montgomeryshire) Stephen Doughty MP (Labour, Cardiff South and Penarth) Jonathan Edwards MP (Plaid Cymru, Carmarthen East and Dinefwr) Nia Griffith MP (Labour, Llanelli) Simon Hart MP (Conservative, Carmarthen West and South Pembrokeshire) Mrs Siân C. James MP (Labour, Swansea East) Karen Lumley MP (Conservative, Redditch) Jessica Morden MP (Labour, Newport East) Mr Mark Williams MP (Liberal Democrat, Ceredigion) The following Members were also members of the Committee during this Parliament Stuart Andrews MP (Conservative, Pudsey) Alun Cairns MP (Conservative, Vale of Glamorgan) Susan Elan Jones MP (Labour, Clwyd South) Owen Smith MP (Labour, Pontypridd) Robin Walker MP (Conservative, Worcester) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at TUTUTUTUTUwww.parliament.uk/welshcomTU UUUUUUTTTTT T The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in printed volumes. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee is Marek Kubala (Clerk), Anwen Rees (Committee Specialist), Alison Mara (Senior Committee Assistant), Baris Tufekci (Committee Assistant), and Jessica Bridges-Palmer (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Welsh Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3264; and the Committee’s email address is [email protected] The Work Programme in Wales 1 Contents Report TTTTTPageT SummaryB 3 1 IntroductionB 5 TheB Work Programme 5 PrimeB providers and subcontractors 5 TheB payment model 6 OurB inquiry 6 DevolvedB responsibilities 7 2 WorkB Programme performance in Wales 8 FindingB sustained employment 8 NumberB of people entering work 10 RegionalB variations within Wales 11 Employment rates in Wales 13 MinimumB performance levels 13 WhyB is the Work Programme performing less well in Wales? 14 3 SupportingB different groups in society 16 JobB outcomes for different claimants groups in Wales 16 HelpingB those furthest from the labour market 17 LoneB parents 19 4 CompatibilityB with Welsh Government and EU funded schemes 21 5 EmployerB engagement 24 6 Post-WorkB Programme support 26 MandatoryB Intervention Regime 26 IsB two years long enough? 27 ConclusionsB and recommendations 28 AnnexB A: The differential payment model 30 AnnexB B: Performance by providers 31 AnnexB C: Jobs Growth Wales statistics 33 FormalB Minutes 34 WitnessesB 35 ListB of printed written evidence 35 2 The Work Programme in Wales ListB of additional written evidence 35 ListB of Reports from the Committee during the current Parliament 37 The Work Programme in Wales 3 BBBBBSummaryB The Work Programme is the latest government-contracted employment programme, which aims to support long-term jobseekers into work and off unemployment benefits. Launched in June 2011, the Work Programme replaced a number of previous welfare-to- work programmes and consolidates employment support for a very wide range of jobseekers into a single mainstream programme. Providers, who are predominantly commercial companies, provide support to participants, for example with building CVs, interview techniques, confidence-building, mentoring, work experience and skills training, and receive payments for finding participants sustained employment (usually defined as 13 or 26 weeks). Our key conclusions and recommendations are: • One in nine people in Wales who joined the Work Programme in its first two years found sustained employment. Although this is not greatly dissimilar to the Great Britain average, we are concerned that the proportion of jobseekers who secure sustained employment through the Work Programme in Wales is the lowest in Great Britain. • We are broadly encouraged that the Work Programme’s performance has been improving over time, both in Wales and Great Britain. We note, however, that performance in Wales has fallen behind the Great Britain average for the most recent cohorts to have completed one year on the programme. • The Work Programme was designed to be an improvement on previous welfare-to- work schemes by incentivising providers to support jobseekers with the most severe barriers to employment. This is a worthy ambition, and a significant challenge, but the programme’s success in this respect is yet to be proven. • We recommend that the Department for Work and Pensions review whether there are means better to incentivise providers to support jobseekers with the most severe barriers to employment, including Employment and Support Allowance claimants. This should include a review of the differentiated pricing structure. • We are concerned that lone parents in Wales are struggling to find sustained employment through the Work Programme compared to other parts of Great Britain. The two providers in Wales, Working Links Wales and Rehab Jobfit, must ensure that both they and their subcontractors have specific measures in place to support lone parents into work. • The restriction in Wales on Work Programme participants being able to access European Social Fund training and skills courses is detrimental to the performance of the Work Programme in Wales and, ultimately, for the opportunities available to the long-term unemployed. • We urge the Department for Work and Pensions and the Welsh Government to resolve the current situation where Work Programme participants in Wales are unable to 4 The Work Programme in Wales access the full range of training courses available to them, unlike in England. This should be achieved by February 2014. • We urge the Department for Work and Pensions to enable participants to exit the Work Programme if required in order to access Jobs Growth Wales. In this report, conclusions are printed in bold and recommendations are printed in bold italics. The Work Programme in Wales 5 1 BBBBBIntroductionB BBBBBTheB Work Programme 1. The Work Programme is the latest government-contracted employment programme, which aims to support long-term jobseekers into work and off unemployment benefits. Launched in June 2011, the Work Programme replaced a number of previous welfare-to-work programmes, including the remaining New Deals for young people, the Flexible New Deal, and Pathways to Work, the previous scheme for Incapacity Benefits (IB) claimants. It therefore consolidates employment support for a very wide range of jobseekers, including many with health problems and disabilities, into a single mainstream programme. 2. Most jobseekers are referred onto the Work Programme if they remain unemployed and on benefit after receiving the support offered to them through Jobcentre Plus (JCP) for between 1 three to 12 months (depending on the benefit type).P P P P P P ReferralPPPPPP is mandatory for Jobseekers Allowance (JSA) claimants and some Employment and Support Allowance (ESA) claimants considered capable of work-related activity. BBBBBPrimeB providers and subcontractors 3. Jobseekers are attached to externally contracted Work Programme providers for a period of two years. Providers are predominantly commercial companies and take responsibility for offering the support long-term jobseekers require, which might include help with building CVs, interview techniques, confidence-building, mentoring, work experience and skills training. Participants remain on unemployment benefits until they find work and can be referred by the provider to JobCentre Plus for sanctioning if they do not comply with certain conditions, such as attendance at meetings with their Work Programme adviser or training courses. There are 18 prime providers delivering 40 separate contracts in 18 regional Contract Package Areas (CPAs) across Great Britain. 4. Prime providers were encouraged by DWP to deliver services through supply chains of subcontractors from the private, public and voluntary sectors, including niche providers with experience of supporting jobseekers with more complex barriers to employment. Most prime providers deliver services through subcontractors to some degree, though some of the largest deliver “end-to-end” services in-house. 5. The Work Programme is designed to allow providers greater