Scheme to help long-term unemployed ‘overestimated support by almost half’

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A scheme to help the long-term unemployed back into work after the Covid-19 pandemic overestimated how many claimants might be suitable for assistance by almost half, MPs have found.

The Commons Public Accounts Committee (PAC) said the Department for Work and Pensions (DWP) had expected its work coaches to find 82% of system-suggested claimants to be suitable for the tailored Restart scheme.

But work coaches found only 43% of those out of work for nine months or more to be suitable.

MPs on the committee found that work coaches had not referred people DWP thought might be eligible because they had “complex barriers” to returning to employment, including homelessness, childcare needs and physical and mental health issues.

That was because officials “felt it did not have time, that work coaches did not know their claimants as well because of Covid-19 lockdowns, and because claimant circumstances would change between it running a trial and launching the scheme”, MPs said.

The economy also proved more resilient than expected, thanks in part to UK Government pandemic support, such as furlough and business grants.

The Restart scheme started in June 2021 and was targeted at giving universal credit claimants who had been out of work for at least nine months enhanced support to find jobs in their local area.

PAC, in its report The Restart Scheme For Long-term Unemployed People – published on Wednesday, found that the scheme could end up costing more per person than other programmes designed to encourage people into the workplace.

The committee said: “It was expected that the scheme would benefit society by £2.44 for every £1 spent on it, but Restart is now expected to cost significantly more per person than previous similar schemes.”

MPs commended the way department officials acted to renegotiate contract terms after noticing that uptake for the scheme was lower than had initially been anticipated.

The scheme, announced by former work and pensions secretary Therese Coffey, had originally been designed to work with 1.4 million participants from across 12 contracted areas in England and Wales at a cost of £2.6 billion.

National Farmers’ Union Conference
Therese Coffey had unveiled the Restart scheme when serving as work and pensions secretary (Jacob King/PA)

The PAC report said that, as a result of the changed terms, “Restart is now expected to cost £2,429 per participant, making it significantly more expensive than the Work Programme, which cost the department around £1,760 per participant”.

More transparency and data should be put into the public domain for the scheme’s impact to be properly assessed, the 22-page report also said.

Conservative MP Flick Drummond, the PAC lead for the Restart inquiry, said: “Restart is giving effective targeted support to those who have been out of the workplace for some time following Covid.

“But there was far less demand than anticipated because the economy was stronger than expected, thanks to Government pandemic support such as furlough and business grants.

“DWP has taken on PAC’s earlier recommendations about renegotiating the contracts, but Restart does need to be tweaked to make sure that there is value for money for the taxpayer.

“It must work for individuals too, especially as there is evidence of duplication with forms between work coaches and the providers.

“Restart is showing that people are moving into the workplace quicker than expected but there needs to be more transparency in reporting the data so that the effectiveness of the scheme can be better evaluated.”

PAC has called on DWP to improve record keeping so that barriers to work faced by a claimant, such as language difficulties or health conditions, are recorded and can be factored into the universal credit system to understand the type of support required.

Pilots or trials of future employment support should also take place to help better understand a scheme’s capacity, the committee recommended.

A DWP spokesman said: “Restart was established to respond to forecasted high levels of unemployment during the pandemic and has helped almost 100,000 people back into work.

“Work coaches provide support based on individual needs, using their expert knowledge to determine if Restart is suitable for claimants.

“Providers are paid according to how many jobseekers are successfully supported into work.”

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