The Government's flagship multibillion-pound programme for helping the long-term unemployed into work has been branded "extremely poor" in a damning assessment by MPs.
The influential Public Accounts Committee (PAC) said that during the first 14 months of the Work Programme, to last July, only 3.6% of claimants on the scheme moved off benefits into sustained employment.
This was less than a third of the 11.9% the Department for Work and Pensions (DWP) expected to achieve, and well below the official estimate of what would have happened if the programme had not been launched, said the MPs.
Margaret Hodge, who chairs the committee, said the programme was particularly failing young people and the hardest to help. She said: "It is shocking that of the 9,500 former incapacity benefit claimants referred to providers, only 20 people have been placed in a job that has lasted three months, while the poorest- performing provider did not manage to place a single person in the under-25 category into a job lasting six months."
She also criticised the DWP for publishing unvalidated data from a trade body representing Work Programme providers, saying: "This is just not on." The programme was introduced in June 2011, at an estimated cost of between £3 billion and £5 billion over five years, but the PAC said the performance in the first year or so fell "well short" of expectations.
Not one of the 18 providers has met its contractual targets and their performance "varies wildly", so the DWP should take action against those which are failing, said the report. The MPs warned that, given the poor performance, there was a high risk that one or more providers will fail and go out of business or have their contracts cancelled. The committee said it shared concerns that providers are concentrating on people more likely to generate a fee, and sidelining jobless clients who require more time and investment, a process known as "creaming and parking".
The MPs made a series of recommendations, including urging the DWP to identify why the Work Programme's financial incentives were not working as intended.
A DWP spokesman said: "This report paints a skewed picture. More than 200,000 people have moved off benefits and into a job thanks to the Work Programme. It is making a real difference to tens of thousands of the hardest-to-help jobseekers. Long-term unemployment fell by 15,000 in the latest quarter. The Work Programme gives support to claimants for two years and it hasn't even been running that long yet, so it's still early days. We know the performance of our providers is improving. Previous schemes paid out too much up front regardless of success, but by paying providers for delivering results, the Work Programme is actually offering the taxpayer real value for money."
In response to comments that only 3.6% of people referred to the Work Programme moved off benefit and into work, the DWP added: "This claim is simply wrong. More than 200,000 participants have already got into work. These comments are very disappointing and are misleading the public about the Work Programme."
TUC general secretary Frances O'Grady said: "The Government's Work Programme has spectacularly underachieved, even by its own modest targets. It has failed those in greatest need, especially unemployed young and disabled people. Ministers should now recognise that the Future Jobs Fund - a scheme they scrapped - was better at helping people into work and saved taxpayers' money. The Chancellor has the perfect opportunity to reinstate it in his Budget next month."