The chief executive of the Employment Related Services Association (ERSA) a trade body for organisations in the welfare-to-work sector has raised concerns about the risks involved in delivering the government’s new Work Programme.

Under the Work Programme that is due to begin in June, charities will play a key role in getting the UK’s long-term unemployed into work.

Kirsty McHugh, ERSA’s chief executive, told Recruiter that payment by results was a concern for charities. “I am worried about charities that put all their eggs in one basket, it’s a real risk for them,” she said. This in turn could have a negative impact on the delivery of the programme.

McHugh also criticised the focus of some newspaper coverage, which focused on payments of up to £14,000 to ERSA members for getting unemployed people into work.
Depending on the category of the jobseeker, and how long they remain in employment, the minimum fee payable is as low as £1,400, but this can be as high as £13,720 for some previous Incapacity Benefit recipients.

She defended the maximum payment. “That person is going to have been out of the jobs market for a long time, and the provider will also have to work and support them in a lot of different areas.” For example, with disability or drug dependency issues.

“Providers will find it difficult to place people in this group into work,” said McHugh. “One in three is good going, which means they will be paid for one and not paid for two. This is not a cash cow for our members, margins are going to be tight.”

She added that with the ability of the economy to create jobs in question, and providers likely to lose money for at least the first two years of the five-year contracts, “a lot of my members are running a considerable risk”.