The Work Programme is the UK government's policy for supporting unemployed individuals into work. It aims to increase flexibility, focus on results, and encourage partnership working between providers. There are 40 Work Programme contracts across 18 areas, delivered by 18 prime providers and over 800 subcontractors from private, public, and voluntary sectors. Providers are paid based on a payment by results model, receiving fees for attaching clients but only earning job outcome payments if the individual remains in work for 26 or 52 weeks. Payments are higher for harder to help groups and providers must beat a 'do nothing' outcome baseline to retain contracts.

1. The Work Programme
Alan Cave
September 2012

2. Our policy direction
• Flexibility
– Individual and local circumstances vary
– Government not best placed to design support
– End to ‘one size fits all’
• Results focus
– Used to pay heavily for process
– Only real measure of success is job outcomes
– Providers paid for results
• Partnership working
– Flexibility and incentives support this

3. Work Programme contracts
• 40 Work Programme contracts
• 18 Contract Package Areas
• 18 Prime Providers of which:
• 852 subcontractors of which:
– 296 are private organisations
– 133 are public organisations
– 423 are from the voluntary sector

4. The Payment by Results Model
Payment
Job Outcome Payment
*Incentive
(£)
payments
Attachment Fee
26 weeks 52 weeks
Sustainment payments
Time on Programme
Start on Job Start Start of
Programme additional
weeks in
work

5. Differential pricing: Maximum payments
£15,000
£9,600
£14,000
£13,000
£12,000
Sustainment
£11,000 payments
£10,000
£9,000
£8,000
Job outcome
£5,000 £5,000
£7,000 £4,700 payment
£6,000
£5,000 £2,800
£2,200 £2,300
£4,000
Attachment
£3,000
fee
£2,000
£1,200 £1,200 £1,200 £1,200 £1,000 £1,200 £3,500
£1,000
£0 £400 £400
£400 £400 £400 £600 £600
4. JSA
1. JSA 18-24 2. JSA 25+ 3. JSA Ex-IB seriously 5. ESA 6. ESA Flow 7. ESA Ex-IB
volunteers
disadvantaged

6. Avoid paying for ‘do nothing’ outcomes
• Some would find jobs without help
• Will only pay for a job outcome for the unemployed
after 6 months in work
• Providers have to beat ‘do nothing’ outcomes to keep
contracts

7. Incentives for performance
• At least two competing providers in every area
• We will shift market share from worse to better
performers
• …and pay bonuses for best performers

8. Some Lessons and Discussion Points
• Simple metrics. Agreed counter-factual
• Importance of market-making
• Work Programme as a vehicle for joining up services
• Steps into the unknown require Partnership working