Tue, 28 May 2024

Newsletter sign-up

Subscribe now
The House Live All
Harnessing North East Devolution Partner content
By Port of Tyne
Construction sector could cut prison leaver unemployment with right support Partner content
How the next Government can start planning for growth Partner content
Press releases

Figures Suggest Government Back-To-Work Programme Is Costing £40,000 Per Success

4 min read

Exclusive: The Prime Minister’s flagship back-to-work programme is estimated to cost over £40,000 per successful participant, PoliticsHome can reveal.

PoliticsHome analysed the current estimated outcomes and data from the initial business case and subsequent government reports into the government’s Restart scheme to work out the value for money of the £1.7bn scheme.

Previous estimates for the support programme for those out of work for a year or more have suggested it will cost £2,429 per participant. But PoliticsHome understands the DWP’s business case for the programme aimed for it to have an ‘additionality’ of just six per cent – meaning six out of one hundred of those who enter the scheme were set to get long-term work that they wouldn’t otherwise have gotten without the scheme’s support.

Factoring in the number of people expected to participate in the scheme over its lifetime – 700,000 according to recently published government figures – and an estimated total cost of £1.7bn – suggests a cost of £40,476 per actual new job created. 

When asked about the cost, the DWP challenged the validity of PoliticsHome’s figures. A DWP spokesperson said: “These figures are a clear misrepresentation based on estimates made prior to the Restart scheme being rolled out and do not reflect the numbers who have been referred to the scheme.

“The Restart scheme has so far already supported 450,000 people. Providers are paid on the basis of how many jobseekers they support into work, delivering value for the taxpayer while supporting jobseekers who often have complex barriers to work.”

However, the department declined to comment on the record when pressed on whether the six percent target had been abandoned, or to explain how – if it remains – our figures could be in any way misrepresentative. The department also declined to explain how it will be evaluating its success on this metric.

The scheme has been running since June 2021. A brainchild of Prime Minister Rishi Sunak when he was Chancellor, the Restart Scheme launched with an aim of spending £2.5bn to have 1.4m participants, with taxpayers netting an aimed £3.80 for every £1 spent on the scheme. 

That was rounded down last year to £2.44 for every £1 spent after major changes were made to the programme after low uptake of the programme.

Even after the DWP widened the eligibility criteria for the programme to include those who had only been out of work for nine months, participants have been much lower than expected. 

In part that’s due to both lower than expected unemployment rates after Covid, as well as the DWP’s own work coaches referring fewer eligible Universal Credit claimants to Restart than the department had planned for.

The scheme has been the subject of serious scrutiny in the past. In one report, the National Audit Office criticised the DWP for failing to plan for lower than expected than expected demand and in turn failing to negotiate “a significant reduction in price” with the private firms in charge of the service.

In another, the Public Accounts Committee criticised the DWP for its poor handling and use of private contractors to run the scheme and failing to collect data to “understand how well each of the individual 77 providers are delivering Restart”.

In fact, the use of private contracts was a repeat criticism from those PoliticsHome spoke to. 

John McDonough, the founder of Recro Consulting, a recruitment and employability firm that has dealt with the DWP on back-to-work contracts in the past, told PoliticsHome that he felt the department systemically failed to try to deliver meaningful success rates on back to work programmes like Restart.

He added they regularly failed to work with the right suppliers, citing that he had encountered one firm involved with the DWP’s ongoing back to work regime that had no offices, no staff and no programmes less than one month before the programme was launched.

“One of the problems I’ve found with these programmes is if the people running them are given information and they should then course correct, they just don’t. The DWP do not react. They’re in denial,” he said. 

“We are the stories we tell ourselves, and they’re very good at telling themselves stories about Restart’s success that aren’t true,” he added. “Some people would call that deluded.”

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Read the most recent article written by Andrew Kersley - Construction, Finance And Gambling Companies Donate Most Money To MPs




Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now