United Kingdom

Details

  • Industry: Government & Public Sector, Central Government
  • Type: Press release
  • Date: 21/05/2013

Work Programme parliamentary committee report - payment by results is saving taxpayer money, says KPMG 

 

The government’s Work Programme – the scheme which uses private and voluntary sector contractors to find jobs for the long-term unemployed – has come in for a lot of criticism. A report published today, by the parliamentary Work & Pensions Committee, gives a more balanced assessment, according to Alan Downey, KPMG’s head of public sector:

 

“The report concedes that progress has been slow, but as one contractor has commented, this is a bit like judging a marathon one mile into the race. The Committee acknowledges that providers were operating in a worse than predicted economic situation and that it would have been unrealistic to have expected outstanding results so early in the life of the programme. Providers are predicting a better set of results when the next set of figures is published in June.

 

The report highlights the fact that the ‘payment by results’ (PbR) mechanism has delivered a major benefit to the taxpayer. Under PbR, providers do not receive a full payment unless and until they place individuals in sustained employment.  So far the programme has cost some £248 million less than it would have cost under a conventional ‘pay for activity’ arrangement.  That is a real saving to the taxpayer.  It means that the cost of relatively poor performance in the early stages of the Work Programme has been borne largely by the contractors rather than the taxpayer.

 

One of the major concerns about PbR is that it will lead to ‘parking and creaming’ – i.e. providers will help those who are relatively easy to place in employment and ignore the more ‘difficult’ cases, including people with disabilities.  The government anticipated this problem by offering a higher success fee for placing those who face greater disadvantages.  As the Committee points out, differential pricing does not yet seem to be having the desired effect, and it makes some sensible recommendations for changes in the Work Programme, to address barriers to work such as disability, homelessness and serious drug and alcohol issues.

 

The report does not pull any punches, but it recognises that the Work Programme is a bold and ambitious initiative. Changes are undoubtedly needed, but we should not join the rush to condemn a programme which still has potential to confound the critics.”

 

-ENDS-

 

 

For further media information please contact:

 

Alison Anderson, KPMG Corporate Communications

T: 0113 254 2980 / 07733 453 065 E: alison.anderson@kpmg.co.uk

 

About KPMG

 

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.

 

 

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