Government back-to-work scheme costing more per person than expected, report finds

The government’s Restart scheme to cut joblessness after the pandemic has cost much more per person and helped far fewer long-term unemployed than planned, the House of Commons Public Accounts Committee said in a report published today.

Under the Department for Work and Pensions (DWP) scheme, accredited employment training providers were meant to give more tailored and intensive support than job centres to long-term unemployed benefit claimants, partially with a view to reskilling people for a changed, post-pandemic economy.

The scheme was expected to deliver social benefits worth £2.44 for every £1 spent on it, but Restart is now expected to cost significantly more per person than previous similar schemes.

The pandemic surge in unemployment that DWP tried to plan for did not materialise in the way that was expected, and DWP work coaches referred about half as many long-term unemployed to the scheme as planned. This was often because of the same complex barriers that drive long-term unemployment benefit claims in the first place, meaning many of its intended participants were judged unsuitable for it: the very same things that keep people out of employment long-term mean they cannot access the help being provided.

The Committee has previously reported on the DWP’s lack of knowledge of the benefit claimants it serves, and says these same data gaps and issues have led to the problems in Restart. This now also extends to the DWP’s knowledge of the providers it contracted to deliver the scheme, and how well they are performing in their areas or relative to each other.

The DWP calculated that Restart would achieve its estimated return on the taxpayer investment if only six in every hundred participants found work which they would not have found without the scheme. However, the Committee found that any drop in that number meant the scheme’s benefits would quickly fall away. Knowledge and evaluation failures mean the DWP may be uncertain which of the people moving off long-term benefits into work will be attributable to the scheme.

Flick Drummond MP, the PAC’s lead on its 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.’

Image: Marten Bjork