Work programme leaves charity sub-contractors vulnerable to financial risk, says survey

Charities involved in the Work Programme are not being adequately shielded from financial risk, according to a survey of over 100 voluntary sector sub-contractors released today.

Members of the special interest group for Work Programme sub-contractors are voicing concerns that the welfare-to-work initiative in its current form could threaten the sustainability of many voluntary sector providers.

Seventy-nine per cent of respondents said that their prime contractor (the organisations appointed to lead on delivering the service contracts) was not shielding them from risk at all (58 per cent) or only to a small extent (21 per cent).

The group, which is run by the National Council for Voluntary Organisations (NCVO), is meeting employment minister Chris Grayling today to air their concerns and suggest steps to ensure that the sector is involved fully and fairly within the Work Programme.

The survey also highlights a lack of faith in the Merlin Standard, a code of conduct for ensuring that subcontractors are treated fairly by their prime contractor partners.

Seventy-one per cent said that they did not think the Standard is adequately regulating prime contractor behaviour (39 per cent answered ‘not at all’, 32 per cent ‘not really’).

Many subcontractors have also fed back that they are not satisfied with the level of Work Programme referrals they have received from their prime contractor.

Fifty-eight per cent of Tier 1 Providers and 72 per cent of Tier 2 Providers said they were not at all satisfied with the current level of referrals.

Sir Stuart Etherington, chief executive of NCVO, said: "The prime contractor model is supposed to safeguard small providers from financial risk, but these findings suggest it is currently falling far short of expectations.

"Voluntary organisations have real value and expertise to offer, so it is crucial to ensure that the sector is involved fully and fairly in the Work Programme. Government must take these concerns on board and ensure that no bad practice is allowed to slip through the net."

Gareth Thomas MP, Labour’s shadow minister for Civil Society, added: “The Work Programme and other government contracts were supposed to be the solution for charities facing huge cuts in direct funding.

"As is so often the case with the government’s ‘Big Society’ policies this has turned out to be a mirage with government ministers again having over-promised and under-delivered.”