DWP has released new estimates for Work Programme volumes as a result of the November 2011 OBR forecasts.
Overall, across the five years, DWP's estimate of how many people will enter the Work Programme has increased from 2.5 million to 3.3 million.
Headline figures:
- Referral volumes up 32% over the five year
- 2012/13 up 33%, rising to 46% increase in 2014/15, before reducing in 2015-16
- Very different balance between groups than expected at this time last year
- JSA groups substantially up, with the biggest rise being JSA early entry.
- ESA groups (except ESA Flow) substantially down.
- Ex-IB groups (JSA or ESA) shifted back roughly a year.
- Volumes are included for the first time for the ‘prison leavers group'
- The volume for Incapacity Benefit/Income Support volunteers is shifted back within the 3-year funding and reduced by 32%.
The DWP estimates are based on the November 2011 OBR forecasts, with further work by DWP to turn OBR forecast into Work Programme volumes. All economic forecasts come with strong health warnings and the scale of change over the last year shows that forecasts are subject to large revisions. However, we are now two months further on since November and there has been a series of independent forecasts that have continued to worsen. This means that JSA volumes could yet rise above these estimates.
Overall, then, a weaker labour market outlook means higher than anticipated Work Programme referrals and a much bigger challenge for Work Programme providers.
In the short term, income from attachment fees will increase. However, In the longer term, job outcomes and sustainment payments are likely to be harder to gain than DWP would have expected a year ago.
The effect on Work Programme providers will be increased numbers needing out of work support and probably for longer than originally anticipated.
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