Thursday 4 October 2012

Charities and the Work Programme

Today the BBC are reporting that many charities are in financial trouble or going under as a result of involvement in the UK Government’s Work Programme and quote Sir Stuart Etherington, chief executive of the National Council of Voluntary Organisations saying of the Work Programme  "They [charities] think it's a walking disaster.  I've heard no positive feedback from voluntary organisations. Some have gone bust, some have withdrawn from the programme. They have a real problem with the way the contracts are structured."

The Work Programme is designed to get long term unemployed people back into work.  Once someone has been registered unemployed for 12 months (9 months for those under 25) Job Centre Plus hands them over to one of 18 prime contractors around the country who are then paid by results for getting them into sustained employment.  This means that the prime contractors are paid only a small up-front fee per job seeker and paid the full fee once the job seeker has found a job and stayed in it for 26 weeks.  Payment by results should ensure that the support provided to job seekers is effective in ensuring they find a job and keep it.  Organisations do not get paid if their services are ineffective.  The prime contractors can use charities and other organisations to provide specialist services such as training or help for those who are homeless, or have physical or mental disabilities.  The contracts between the prime contractors and other support organisations are separately negotiated and are not necessarily linked to the payment by results scheme.

Despite the Work Programme being trumpeted by the Department of Work and Pensions as “a massive boost for the Big Society” only one of the 18 prime contractors is a charity.  This is CDG (Careers Development Group) who are currently merging with a bigger charity The Shaw Trust, who are already involved in the Work Programme as a sub-contractor.   To be fair, many voluntary organisations are involved in supporting the prime contractors.  Commercial prime contractors include scandal-hit A4E and G4S. (Memo to self: never start a 3-letter company with a 4 in the middle.)

I volunteer at CDG’s Wimbledon centre for 3 hours every Monday morning, providing additional support to job seekers by coaching, writing and improving their CVs and cover letters, helping with basic IT skills and online job search and generally being someone to talk things through with.  We volunteers are a support to the full-time employment advisors who provide the prime, professional support.  I find it a great way to start the week.  It’s energising to meet and engage with a broad range of people and motivating to feel I can make even a small difference.  CDG are a great organisation to work with, providing regular feedback and recognition to the volunteers, arranging for networking meetings and always ready to listen to ideas for improvement. 

Recently some volunteers met with CDG’s strategy and business development manager for a briefing on the Work Programme, so I had the opportunity to hear about the design of the Work Programme and how it's working in practice and to ask questions.  One fairly obvious question I asked was how a charity such as CDG was able to manage the cash flow issue inherent in a payment by results scheme that means no payment can be received for at least six months and usually significantly longer.  CDG had, not surprisingly, addressed this issue, done their sums and ensured that they had sufficient funds available to deal with the cash flow challenge. 

Today’s headlines appear to be mainly about charities taking on payment by results contracts without planning effectively how to deal with the cash flow issue.  “They are not businesses” I hear, but you don’t need a degree in economics or a big business brain to understand that if you don’t have any money coming in on the contract for at least 6 months you’d better have a way of dealing with that.  Any charity that handles its finances that badly is simply very badly managed.  No one forced them to take contracts of this nature.  There is no obligation for sub-contracting charities to sign payment by results contracts.  I daresay that the commercially based prime contractors pushed for payments by results contracts to match their own income streams, but charities did not have to comply. 

Hidden beneath the headlines are reports of cases where charities have signed up as work programme sub contractors but been fed very little work.  I guess this to mean that the commercial prime contractors are finding other ways of getting people back into work.  It is possible that services that in the past were provided by charities are now being delivered by “for profit” companies.  That would be a shame but, so long as the main objective of helping the long-term unemployed back into work is being achieved, I think it’s not the biggest issue.

So, are the BBC and the press in general correct that the Work Programme is “a walking disaster”?  Ever since it was launched the programme has been attacked first as driving “forced labour” (unpaid work experience schemes) and now as closing down worthy charities.  Our media are quick to look for bad news to keep the 24 hour news bandwagon fuelled.  (Remember all the negative stories before the Olympics of impending public transport meltdown, missiles on rooftops, security threats and the G4S meltdown?)

The fact is that it’s too early to judge whether the Work Programme is working.  The programme was launched in June 2011.  No statistics or results have yet been published.  Let’s judge when we have facts.  In the meantime I can assure you that CDG are a professional and caring organisation staffed with excellent individuals who are really committed to making a difference and that most of the clients I meet are genuinely grateful for the support they are receiving to get back into work.