Work Programme charities warn of imminent contract failures

Seven out of 10 charity sub-contractors say that their Work Programme contracts are at risk of failure in a new report released today.

The report, from the National Council for Voluntary Organisations (NCVO), found that 47% of respondents felt that their contracts were at risk of failure within the next six months and 26% thought they were at risk of failure before the end of the contract.

The report also found that half of the charities (48%) were subsidising the delivery of the Work Programme from their own reserves.

These findings compound earlier warnings from the NCVO that the Government’s flagship welfare-to-work initiative could leave many charities feeling squeezed out and financially vulnerable.

Sir Stuart Etherington, CEO of NCVO, said: “The sustainability of these contracts is a major cause for concern. This programme is clearly not working for many charities involved in its delivery.

"More worryingly, this will have a damaging knock on effect to the many job-seekers who desperately need the specialist support that charities can deliver.

“Despite concerns about contract viability, charities are still working hard to provide a quality service and are dipping into their own reserves rather than neglect people that need their help.

"It’s still early days and 2013 will prove critical to the overall success or failure of the Work Programme - we have a small window of opportunity to get this right and ensure that this scheme delivers for job-seekers.

“We are calling on the Government to investigate the current funding arrangements to determine why so many contracts under the Work Programme are at risk of failure and why some charities are subsidising this work.”

The full report is entitled The Work Programme – Perceptions and Experiences of the Voluntary Sector and can be downloaded: here.

The report also identifies:

A considerable mismatch between anticipated referral flows and Work Programme customers received.

Many subcontractors are dissatisfied with the relationship with their prime contractor.

The majority of prime contractors are not sharing supply chain performance data with their subcontractor partners.