The number of people on sickness benefits expected to be referred for specialist help in finding work has been sharply scaled back by the government, the FT has learnt, sparking allegations that difficult cases are being “parked”.
The move will also deal a blow to cash-strapped charities that had hoped to play a leading role in the former claimants into jobs.
The Department for Work and Pensions is estimating that 596,000 people claiming either incapacity benefit or its replacement – employment and support allowance – will be referred to the Work Programme over the five-year life of the contracts, compared with 819,000 envisaged when the programme got under way in June this year.
For the 2011-12 financial year, the department is now estimating that 72,000 sickness benefit claimants will be referred to the Work Programme – substantially fewer than half of the 192,000 expected in June.
The reduction means organisations that would have helped the claimants would potentially lose about £72m in funding. The majority of such groups are voluntary organisations, which have been subcontracted to do the work, generally by private companies.
At the same time forecasts for the numbers being referred from jobseekers allowance, the unemployment benefit, whose needs will in many cases be less complex than those who are coming off ESA, making it easier to find them work, have been substantially increased by the department since its June estimates.
Chris Grayling, employment minister, said there was “absolutely no question whatsoever” of the government reducing the support being provided for people on ESA. “Every single person on ESA has access to the Work Programme and will continue to do so.”
But he acknowledged “variations on numbers in each group”, which he said were “down to the mix of people coming through the [work capability assessment], particularly incapacity benefit claimants, which has been different from those originally projected”.
Kirsty McHugh, chief executive of the Employment Related Services Association, trade body for the welfare to work industry, said she believed the problems were twofold. First, it was taking far longer than expected for assessments of ESA claimants to be completed, in part because of a high number of appeals which meant people were simply being “recycled through the system”.
Second, jobcentre Plus, which is charged with supporting people of working age from welfare into work, was failing to refer ESA claimants to the Work Programme in anything like the volumes that had been expected. “Now the government is having formally to say to providers ‘we are well behind where we thought we would be’,” she added.
Voluntary sector providers were being “disproportionately hit” as a result, just as they were also struggling with public sector funding cuts. The £72m lost in potential funding is calculated by multiplying the 120,000 drop in forecast referrals by the £600 “attachment fee”, paid for each person coming on to the programme.
Sir Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, said: “It looks as though, in the light of what is happening to unemployment, the scheme is falling back on just supporting the less difficult to get into jobs and the hardest to help are being parked.”
He criticised the “gagging clauses” that he said were preventing the prime contractors from releasing information on their performance. Sir Stephen added: “This is increasingly untenable. DWP need to be transparent and now release all the data so we can see the true picture and then talk about emergency remedial action to support the hardest to reach unemployed.”
Liam Byrne, shadow secretary for work and pensions, said: “This is a humiliating blow for the government’s flagship welfare to work scheme. The government should stop hiding behind a wall of secrecy and urgently publish all information they can now, so we can get to the bottom of just how far off course the Work Programme is.”