The Single Homeless Project in London is the first charity to publicly pull out of the Work Programme, saying that its involvement in the government's flagship welfare-to-work scheme is not sustainable.
The charity has been working for nine months as a subcontractor to employment and training firm Seetec on the Work Programme, supporting homeless people to find jobs.
A statement on its website today says: "We have withdrawn from the Work Programme because we have been unable to make the financial arrangements work given the multiple problems faced by many of the clients referred to us."
Commenting on the decision, Single Homeless Project (SHP) chief executive Liz Rutherfoord said:
“We had high hopes that the Work Programme would enable us to help more homeless people to find work and ultimately regain their independence.
“However, we’ve found that the scheme is just not adequately resourced or structured to do this. We did not receive as many referrals as we had expected and the majority of those referred to us were nowhere near ready for work. The Work Programme does not adequately fund the intensive preparatory work required to achieve results. We just do not have the resources to effectively subsidise a national government programme.
“We have also become concerned that the Work Programme structure leaves those who need the most support, at greatest risk of benefit sanctions. It is with regret that we are leaving the programme, but if the government really wants to help people furthest away from employment they need to ensure there is adequate funding and reward for those who are supporting people to the point of being job-ready."
Upfront payments insufficient
“Most of them are not job-ready, or even in a position to be searching for work,” said Rutherfoord, “so the kind of intensive work we are doing with them, that money does not come anywhere near covering it.”
The Work Programme has a payment-by-results funding model, and providers in the Programme will receive the bulk of the fees they are entitled to when they prove they have found someone a job and kept them in it for an agreed amount of time.
Eighteen prime contractors are delivering the scheme, through a network of sub-contractors, many of which are charities.
Payment per beneficiary ranges from £3,800 to £13,700, depending on the needs of the person. However, only around £400 to £600 of this is given to contractors upfront, with the rest of payment coming through if the beneficiary is helped according to targets agreed with the Department of Work and Pensions (DWP).
Rutherfoord said these upfront payments the charity receives are “not enough to meet the needs of the clients being referred to us”.
Employment minister: charities signed the contracts
The Single Homeless Project's prime contractor Seetec is delivering the Work Programme in three areas across the UK.
A spokesman said: ““Seetec fully respect SHP’s decision to withdraw from delivery of the Work Programme.
“Seetec continues to have a good relationship with SHP and we will ensure that any feedback continues to be passed onto DWP.”
Responding to the exit of SHP from the Work Programme, employment minister Chris Grayling told the BBC:
“The deals that are done between subcontractors and prime contractors are entirely down to them.”
Grayling, who name-checked SHP in a speech on the Work Programme last June, has said before that he is not minded to address charities’ concerns on timing of payments they receive on the Work Programme, as he argues that they choose to sign contracts with these payment terms
Stedman-Scott: only four contracts financially viable
The BBC also spoke to Tory peer Baroness Stedman-Scott, whose employment charity Tomorrow’s People entered into negotiations for 54 subcontracts on the Work Programme, but only ended up with four:
“Only four of them were financially viable,” Stedman-Scott told the BBC.
“The principle of the working capital transferring down has not materialised in the way we aspired it would.”
Stedman-Scott told civilsociety.co.uk that the charity had no plans to exit the Work Programme.
It was expected that prime contractors on the Work Programme would have the capital to take on most of the financial risk until total payments were paid.
But some charities, who wanted to remain anonymous, told the BBC that they are simply passing down the risks to subcontractors.
