Government needs to be aware of the financial risks taken by welfare-to-work providers in hitting targets due to the anaemic growth of the UK economy.

Kirsty McHugh, chief executive at trade association Employment Related Services Association (ERSA), made the comment ahead of the launch of the government’s Work Programme this Friday, which aims to get the long-term unemployed back into work and places targets on providers to get a minimum number of candidates into the workforce. Elsewhere, the International Monetary Fund (IMF) yesterday cut its growth forecast for 2011 for the UK from 2% to 1.5%.

McHugh told Recruiter: “ERSA warmly welcomes the scale and ambition of the Work Programme and its move to a ‘payment by results’ regime. It is important that the government recognises the scale of risk being taken on by the industry – prime contractors and subcontractors alike.

“The finances of the Work Programme will be tight and its overall viability may ultimately depend on the health of the economy and the availability of jobs.”

Carmen Watson, managing director of Pertemps Recruitment Partnership, says it’s not just the state of the economy that is a concern but also the lack skills among candidates.

“The skills agenda raises much concern and there are a number of vital areas we need to look at. A critical area appears to be 16-24-year-olds where we have seen an alarmingly high unemployment rate so far this year.

“We are clearly not offering this age group enough training and support and, in my opinion, many are not being offered training at all. This is an issue that needs to be addressed as a matter of urgency and we need to be asking companies to seriously look at how we can support an age group that are failing to get jobs.”