In its issue for the 10th -23rd February 2012, Private Eye discussed a government report predicting that the work programme would fail, and put forward ways in which it could be bailed out, writes the Beast.

The article ran:

Welfare reform
Nice Work

The National Audit Office (NAO) report on the coalition’s £5bn Work Programme (under which private contractors are paid to get people off benefits and into work) predicts that the scheme will fail. But it also suggests how the firms who run it might be bailed out.

The programme, the brainchild of work and pensions secretary Iain Duncan Smith, is meant to avoid the “limited success” and “disappointing … performance” of past initiative thanks to payment-by-results. Contractors fund the scheme up front (hence the dominance of well-capitalised private firms in the programme) and are only pa9id when their clients find and keep a job.

The NAO thinks there is a significant risk, however, that Duncan Smith’s target of 40 percent of the mainstream unemployed finding work under the scheme is “over optimistic”. History, it says, suggests 26 percent is a more realistic figure. Payment-by-results targets that are too optimistic mean that: “It is possible that one or more providers will get into serious financial difficulty during the term of the contract.”

There’s much more – and you should visit Beastrabban\’s Weblog to see it, but here’s the point:

The NAO predicted all along that the scheme would fail, and the government would have to bail it out for it to stand a chance of working.

History, it seems, has proved this prediction correct.

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