Fishburn Hedges

26.08.2011 | (1 comment)

A think tank launches a critical report questioning Government policy, and the minister hits back appearing on Today describing the analysis as flawed. It's a familiar spectacle to Westminster watchers.

This time the think tank in question was the SMF, which unveiled research suggesting that the Government's welfare-to-work scheme (the Work Programme), is at real risk of financial collapse, with potentially dire consequences.  That's a serious charge for any think tank to make, but especially when it comes from an organisation that claims to have conceived the original idea.

The Work Programme is a flagship policy for the Coalition.  Tackling unemployment and getting the benefit bill down is a significant priority, especially with the renewed political focus on tackling social, as well as economic, problems after the riots. 

And the Work Programme is also central to the Coalition’s public service reform plans, as policymakers explore different ways to fund and deliver services.  It’s the UK's biggest single payment-by-results programme, with private, public and voluntary sector organisations to be paid for finding and keeping the unemployed in work. The more challenging the client, the more they will be paid, if they're successful.

The trick for policymakers is to get the payment model right as they transfer risk in this way. If the funding isn't sufficient or performance expectations are set too high, providers will go bust, jobseekers won't get the support they need, and the benefit bill won’t come down.  That's the SMF’s warning – that the policy is being poorly implemented as providers won't be able to deliver the results that they're expected to achieve, especially given the tough labour market.

So it's not surprising that Chris Grayling, the Employment Minister, hit back. The SMF’s research is a real political challenge, especially as the Work Programme has only just got up and running. 

But if expectations are set too low or too much is paid for unimpressive outcomes, taxpayers won't be getting value for money. And it's not hard to imagine the treatment ministers would get on the Today programme or from the Public Accounts Committee if that happened.

The recent Open Public Services White Paper reaffirmed the Coalition's commitment to payment-by-results, and plans are already advanced to introduce it for a number of services, including offender rehabilitation. So, as the Government’s public service reform drive picks up, ministers are going to have to walk the tightrope on this.

Risk is inherent in payment-by-results programmes – that’s the point. But the Work Programme is too important to the Coalition to fail.

Posted by Rory Scanlan

 

on 14.09.2011

Russell Webster :-
There is a growing perception that the risk is there for smaller third sector providers but not for larger private ones - as you say, the Work Programme can't be allowed to fail.