11/10/11

By Andrew Holt

Sector organisations have criticised the government's Work Programme, questioning its chances of success and whether it actually puts more risk on Third Sector organisations.

Only 8% of third sector subcontractors are confident that the Work Programme will hit its targets, a new survey by ACEVO (Association of Chief Executives of Voluntary Organisations) has found.

And the Work Programme is at risk of ‘systemic failure’ unless some significant issues are addressed, a group of over 100 charity sub-contractors has also warned today, while London Voluntary Service Council revealed low confidence levels among VCS subcontractors that the Work Programme will succeed in meeting its minimum performance levels.

The ACEVO survey also suggests that despite Government hopes that the Work Programme would provide “a big boost for the big society,” voluntary organisations are being asked to shoulder significant risks through the initiative.

The CEO’s body surveyed all third sector organisations involved in the Work Programme to gauge the sector’s engagement and confidence in the programme.

The survey found that:

There is anxiety as to how successful the programme will be:

Only 8% were confident that the Work Programme will hit its targets

Only 9% felt the Work Programme’s payment system was adequate to help those furthest from the labour market.

Voluntary sector subcontractors are shouldering significant risks:

Only 38% of respondents had signed contracts for their provision

37% had not agreed pricing levels with their primes.

Only 18% of respondents believed their payment profile had been softened in comparison to their prime’s DWP contract

Only 57% of respondents agreed with the information on their role in the Work Programme that prime contractors had submitted to DWP

Speaking on the results of the survey Sir Stephen Bubb said: “This survey confirms at scale what my members have been telling me.

"Third sector leaders fear the Work Programme won’t be the success story that the Government wants it to be – for their clients or for their organisations.

“The Government needs to be fully transparent on the Work Programme’s success rates so that if my members’ fears are realised, we know we need to change course.

"And it needs to accelerate and beef up its plans to protect voluntary sector subcontractors from bad behaviour on the part of prime contractors.”

ACEVO has written to the Minister for Employment, Chris Grayling MP, with the survey results.

Systemic failure
Moreover, the Work Programme is at risk of ‘systemic failure’ unless some significant issues are addressed, a group of over 100 charity sub-contractors has also warned.

Members of the special interest group for Work Programme sub-contractors are voicing concerns that the new welfare-to-work initiative in its current form could leave many voluntary sector providers feeling squeezed out and financially vulnerable.

In a paper which has been sent to Employment Minister Chris Grayling, the group, which is run by the National Council for Voluntary Organisations (NCVO), calls on the government to ensure that sector is involved fairly within the programme.

Key concerns centre around the effectiveness of the Merlin Standard, a code of conduct for ensuring that subcontractors are treated fairly by their prime contractor partners.

The group has raised concerns that the current timescale for prime contractors to obtain Merlin accreditation within one year of starting Work Programme contracts is too long, leaving voluntary sector providers vulnerable to mistreatment and financial risk now.

Many subcontractors have fed back that they have not yet received any Work Programme referrals or in some cases even received contracts from their prime.

This reinforces concerns that some voluntary organisations have been used as ‘bid candy’ to make prime contractor supply chains look more attractive during the tendering stage.

The group recommends that Government should look at current funding arrangements to ensure that money passed on to sub-contractors is both fair and sufficient to carry out the work.

This follows on from concerns that prime contractors may not pass on sufficient upfront fees to their supply chain partners, many of whom will be financially vulnerable ‘niche’ providers.

The paper also recommends monitoring sub-contracting arrangements to ensure that they avoid undue bureaucracy.

One member of the group has reported signing a contact 140 pages long only to receive no referrals to date.

Sir Stuart Etherington, chief executive of NCVO, said: "The voluntary sector has vast knowledge and expertise which could be put to good use within the Work Programme, so it is crucial to ensure that the sector is involved properly and fairly.

"While the broad aims and direction of the Work Programme is right, the devil is in the detail, and we urge the Government to take these concerns seriously to ensure that the programme delivers good outcomes for all."

London Voluntary Service Council
And London Voluntary Service Council (LVSC) has today launched a report into the involvement of specialist voluntary and community sector (VCS) organisations in the government’s Work Programme.

The report has found that so far the expertise of specialist VCS organisations is largely unused, is in danger of being lost and that employment inequalities will worsen in London as a result.

The report found that in London the overall rate of subcontracting by the VCS is approximately 20%, lower by a third than the indicative 30% figure given by the Department for Work and Pensions (DWP) in Work Programme documentation earlier this year.

It also found that the vast majority of tier 2 VCS subcontractors have had no job seekers referred to them at all, raising doubts that the most disadvantaged job seekers facing employment inequalities, such as lone parents, disabled people, and minority ethnic groups (all supported by specialist VCS organisations), will get the support they need.

Other headline findings from the report are:

Most VCS providers report that prime contractors have simply passed the Work Programme’s high risk outcome based pricing structure on to groups in their supply chains, regardless of size or financial capacity of subcontractors.

TUPE obligations have imposed a considerable burden in terms of cost and resource at the very time these groups were gearing up for delivery.

There are low confidence levels among VCS subcontractors that the Work Programme will succeed in meeting its minimum performance levels, or that the payments on offer will incentivise VCS providers that help the most disadvantaged job seekers.

Nevertheless, a number of VCS groups are well underway delivering tier 1 or ‘end to end’ Work Programme subcontracts and supporting Londoners back into work.

Alison Blackwood, head of policy at LVSC, said: “We are still in the early stages of the Work Programme, and it is not too late for government to make adjustments to ensure it delivers fairly for the most disadvantaged Londoners”

“The success of the Work Programme will be instrumental in Mayoral employment equality targets being met in London and LVSC will continue to support specialist VCS providers to play the kind of role that Londoners need to reduce employment inequalities.”

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