The Work Programme

Alan CaveSeptember 2012

Our policy direction

• Flexibility

– Individual and local circumstances vary

– Government not best placed to design support

– End to ‘one size fits all’

• Results focus

– Used to pay heavily for process

– Only real measure of success is job outcomes

– Providers paid for results

• Partnership working

– Flexibility and incentives support this

Work Programme contracts

• 40 Work Programme contracts

• 18 Contract Package Areas

• 18 Prime Providers of which:

• 852 subcontractors of which:– 296 are private organisations– 133 are public organisations– 423 are from the voluntary sector

The Payment by Results Model

Payment

(£)

Time on ProgrammeJo

b O

utc

om

e P

aym

ent

Att

ach

men

t F

ee

Start onProgramme

Job Start Start of additional weeks in work

Sustainment payments

26 weeks 52 weeks

*Incentive payments

Differential pricing: Maximum payments

£0

£1,000

£2,000

£3,000

£4,000

£5,000

£6,000

£7,000

£8,000

£9,000

£10,000

£11,000

£12,000

£13,000

£14,000

£15,000

£400

£1,200

£2,800

2. JSA 25+

£400

£1,200

£2,200

1. JSA 18-24

£400

£1,200

£5,000

4. JSAseriously

disadvantaged

£400

£1,200

£5,000

3. JSA Ex-IB

£600

£1,200

£4,700

6. ESA Flow

£600

£3,500

£9,600

7. ESA Ex-IB5. ESA

£400

£1,000

£2,300

volunteers

Sustainment

payments

Job outcome

payment

Attachmentfee

Avoid paying for ‘do nothing’ outcomes

• Some would find jobs without help

• Will only pay for a job outcome for the unemployed after 6 months in work

• Providers have to beat ‘do nothing’ outcomes to keep contracts

Incentives for performance

• At least two competing providers in every area

• We will shift market share from worse to better performers

• …and pay bonuses for best performers

Some Lessons and Discussion Points

• Simple metrics. Agreed counter-factual

• Importance of market-making

• Work Programme as a vehicle for joining up services

• Steps into the unknown require Partnership working