Warning over work scheme 'risks'
Published 24/01/2012 | 00:22
The Government's biggest department over-estimated how many jobseekers will be helped by a new multibillion-pound work programme, while the risk of fraud and errors going undetected has increased, according to an official report.
The National Audit Office (NAO) warned that the speed at which the Work Programme had been introduced had led to increased risks.
The programme, which replaced virtually all welfare-to-work schemes in England, Scotland and Wales last year, will help 26% of the largest group of jobseekers into work, compared to an estimate of 40% by the Department for Work and Pensions (DWP), said the NAO.
Some of the organisations delivering the programme in areas of high unemployment may struggle to meet targets and could get into "serious financial difficulty", said the report.
The NAO also revealed that the computer programme to support the new scheme was not fully functional when it was launched so that the DWP will not be able to carry out automatic checks to confirm that people who find work have stopped claiming benefits, until March at the earliest.
"The Department needs to ensure that improvements to the IT system are delivered on schedule. In the meantime there is an increased risk of fraud and error going undetected," said the report.
The NAO also noted it had cost £63 million to terminate existing welfare-to-work contracts, and said that no alternatives to the Work Programme were considered, nor was it tested through pilot schemes.
Margaret Hodge, chairwoman of the Public Accounts committee, said: "The rush to get the programme up and running was so great that the supporting IT is still not in place even though the programme was launched eight months ago. This has led to an increased risk of fraud and error."
Employment Minister Chris Grayling said: "Payment by results is a totally new approach for Government and its success simply cannot be assessed in the same old ways. I'm really disappointed that the NAO is producing a report which is partially based on guesswork, when it's private companies and not taxpayers who are carrying the risks.
"Unlike the last government's welfare to work schemes, we only pay when companies succeed in getting the long-term unemployed into sustained employment."