The government has set great store by its £5bn plan to get people who have been unemployed for a long time back into work. David Cameron has called it “the biggest and boldest programme since the great depression”.
Expensive though the scheme sounds, it is actually much cheaper than its predecessor, Labour’s Future Jobs Fund. The problem is, it isn’t working.
Figures out today show the programme has improved since last year, when providers were way off hitting their minimum performance targets – but not enough.
Ed Miliband chose not to ask David Cameron about the Leveson report today, which has arrived on the PM’s desk, but not the Labour leader’s.
It would have been tempting for Miliband to try and force Cameron into saying something that would then limit his options for how to respond to the report when he does so tomorrow, but instead he chose the more concrete attack of the government’s failing back-to-work scheme, the Work Programme.
Miliband was on solid ground. The key statistic on the programme is that it has found six months’ worth of work (or three months, if the person is particularly difficult to help) for just 2.3 per cent of those on it. The Labour leader held the killer stat until his second question though, coyly beginning with a request for Cameron to “update the house on its progress”.
Mark Hoban, the employment minister, has just suffered a bit of a torrid press conference with the assorted ranks of the British press after the Department for Work and Pensions admitted its £5bn back-to-work scheme has fallen well short of its own targets.
The government’s figures show the scheme had found sustained employment (six months for most, three months for those most difficult to help) for just 2.3 per cent of people. The department had set a minimum performance level for itself of 5.5 per cent.
Why is it failing? There are many reasons, but here are the main ones:
1) The economy is worse than expected. The original assumptions built into the scheme were that the UK economy would be growing at 2 per cent. Of course, it is not, which means there are fewer jobs around to be had.
2) The targets were too high. As a way of getting the Treasury to cough up the cash needed for the scheme, the department for work and pensions set very aggressive targets for providers. This has been a concern right from the start of the scheme, as the FT’s former public policy editor, wrote last year.
David Cameron was asked in today’s prime minister’s questions about the critical report from the government’s auditors on the government’s flagship back to work scheme.
The National Audit Office warned that providers of the £5bn Work Programme are working to overly-ambitious targets which they might not meet. They believe that out of the group of people who are easiest to get into work, only just over a quarter will be successfully placed. That compares to government estimates of 40 per cent.
The prime minister tried to brush off the problem during PMQs, sayign the risk was not to the taxpayer, but to the providers themselves:
The basic point is the Work Programme is not putting the taxpayers at risk, it is putting providers at risk. It is about payment by results, it is about getting things the previous government never did.
The controversy over how Nick Clegg’s £1bn jobs fund is to be paid for has overshadowed the announcement itself, much to the annoyance of the Lib Dems. This morning, John Humphrys spent most of his interview with Clegg asking him whether tax credits were going to be squeezed to pay for his plan.
I should point out that no tax is hypothecated: we should not think the tax credits money is going directly into the jobs fund. However these things are true:
Ken Clarke may be in the dog house for telling the Daily Telegraph the brutal truth – that the worst of the cuts have yet to be felt, that the government is going to find that difficult and that middle England still hasn’t properly grasped the scale of what is to come.
But that assessment pales into insignificance compared to a chilling warning that Chris Grayling, the work minister, has allowed his department to issue.