Notorious outsourcing company Serco has tightened its grip on the welfare state. Another contract from the Department for Work and Pensions (DWP) is funnelling a further £175m to the controversial firm. In this instance, it will expand the private corporation’s role delivering a key government mandatory Universal Credit work programme – the ‘Restart Scheme’.
However, the DWP has awarded this after a litany of private sector providers’ – including Serco – abject failures with the scheme to date. Moreover, it means the infamous firm now holds current DWP contracts to the tune of well over half a billion.
DWP: Serco tightens its grip on the welfare state
On 7 August, Serco announced the DWP had extended its contract for the government’s Restart Scheme.
In a nutshell, the DWP is contracting private sector providers to host twelve-month tailored employment support packages for certain benefit claimants. The DWP makes this a mandatory requirement for some claimants to participate in to receive their benefits. And notably, it can sanction those that do not comply with the scheme.
Since June 2021, a slate of private firms, including other notorious names like Maximus and G4S, have run the scheme in different areas across England and Wales. Serco won the contracts for both the West Central region, and Wales. It was originally for three years. Now, the DWP is continuing the scheme for two further years, and has extended Serco’s contract for these areas.
However, from early on, the scheme wasn’t standing up. In June 2022, the Guardian reported that the scheme had put only 7% of its participants into work. This emerged in a parliamentary written question put by then DWP shadow minister Alison McGovern to the department. Up until the end of April 2022, just 16,180 (7%) had left the scheme to start work, or because they’d moved off of Universal Credit, or out of the Universal Credit Intensive Work Search group – meaning the scheme had failed to help 93% of participants into work.
In other words, in its first ten months, the scheme had been an utter failure. Now, the situation isn’t looking much better.
DWP statistics on the Restart Scheme
The DWP now produces regular statistical releases for the Restart Scheme. Significantly however, these categorise the information differently than Davies’s answer to the written question. In particular, rather than the broad ‘leavers’ category, which didn’t solely include those who entered work, the DWP publishes figures for those who have entered work during and after the scheme.
In theory then, this provides more detailed information on the results of the scheme so far. Notably though, this doesn’t give separate statistics on those who’ve left the scheme, or the reasons for doing so.
Instead then, it uses data on participants meeting minimum and stretch targets the DWP has set for providers to achieve. Specifically, these set out the number of participants providers should help into sustained work – its so-called ‘job outcome’. It defines this as achieving the equivalent of 16 hours for 26 weeks at the National Living Wage. In 2022, it reviewed these targets, setting the ‘Minimum Performance Target (MPT)’ at 27% of participants. Its stretch goal – the ‘Tender Performance Target (TPT)’ – is 36% across the lifetime of the scheme.
These are obviously low targets to begin with, but what’s worse is that providers are currently falling short of them anyway. Of the 610,000 people who have started the scheme to date, just 142,700 – 23% – of people have achieved the DWP’s ‘job outcome’. This means that the scheme has still failed to help 77% – more than three-quarters – of participants into a job paying the legal minimum wage.
Not hitting bare minimum targets
Of course, this will include those who have only just started the scheme, so doesn’t provide a clear picture. It’s why the DWP statistics show the percentage of participants meeting this at six month, twelve month, and 21 month intervals. The 21 months includes the twelve-month scheme, six months of earnings, and a three month ‘data settlement’ period in which employers or the employee report their earnings.
At six months, which naturally provides the largest span of data, the scheme was meeting a third of the MPT. That is, between June 2021 and October 2023, just 9% of participants had met the DWP’s set ‘job outcome’. By contrast, at twelve months, it did markedly improve, but was still falling foul of the DWP’s minimum target, at just 23%. This also only covered participants up to April 2023.
For 21 months, it’s a little rosier at 31%, finally hitting MPTs. However, this still doesn’t meet the stretch target. Notably, the DWP based this threshold on what providers claimed they could achieve in their bids for the contracts. As such, they’re still hugely under-delivering on their promises. More importantly, this data only shows a year’s worth of the scheme, until July 2022. It’s therefore very limited analysis at any rate.
But here’s the thing – the DWP never anticipated its multi-billion pound employment support programme would actually result in many more people finding work anyway. By the department’s own projections, it estimated that Restart would help just six out of every 100 participants into “sustained work” than would have found it without the scheme.
The department has yet to conduct a full evaluation of this and whether it has met this projection. So these DWP statistics are failing to show how many of those achieving its targets would have done so anyway without the support of the scheme.
Exploitative employers and poverty wages
None of this is to mention that the DWP’s ‘job outcome’ is also based on the government’s disgracefully paltry so-called National Living Wage. Most notably, the government hasn’t calculated this in line with the cost of living. The Living Wage Foundation has highlighted that it’s £1,092 short of its estimated real living wage. This is the base amount it calculates people would need on average for a decent standard of living. For London, the gap was much greater. The National Living Wage fell £3,334.50 short of the London Living Wage.
Needless to say then, if Restart’s goal was to reduce the number of people claiming benefits, it also hasn’t done this. Specifically, similar proportions of people participating in the scheme remained on Universal Credit to those not on the scheme.
These were the findings of a DWP evaluation of the Restart Scheme from May 2024. On behalf of the department, Ipsos and the Learning and Work Institute (L&W) conducted a series of surveys on a pool of scheme participants, employers, and contractors. In particular, it found that:
The survey showed that while a greater proportion of Restart participants were in work than non-participants, similar proportions of participants and non-participants were claiming Universal Credit (UC). This suggests that the outcomes achieved were not always sufficient to enable eligible participants to stop claiming UC.
In other words, Universal Credit is simply subsidising the poverty pay of employers.
Not the full picture
Overall, the evaluation concluded that:
The findings from this research, while not an impact assessment, suggest that the Restart Scheme supported participants to achieve positive outcomes both in terms of sustainable employment outcomes and wider outcomes (including well-being, qualifications, proximity to the labour market and job searching skills). Evidence from the longitudinal cohort study suggests that Restart participants were more likely to be in work than non-participants.
However, this wasn’t the full story either. For one, as the report itself acknowledged, it wasn’t a proper ‘impact assessment’. Moreover, the devil is in the detail – and this ‘evaluation’ was no exception. Notably, it also stated that the non-participants it utilised for its comparison were unsuitable as a control group. This was because:
The demographic profile of this group is different to that of Restart participants, which may have contributed to them not starting the scheme.
For instance, the two factors with the highest divergence were education and a person’s health condition. While 22% of participants had a degree level education or higher, just 13% of non-participants were the same. Meanwhile, 63% of non-participants lived with a long-term health condition, whereas 53% of participants did.
Obviously, these disparities made comparisons wholly inappropriate.
Harming chronically ill claimants
What’s more, the scheme has also failed participants from marginalised groups the most. Perhaps unsurprisingly, the most pronounced was chronically ill and disabled people. It identified that being disabled (including learning disabled) and living with a health condition was the biggest barrier to employment.
Worse still, Restart likely actively made chronically ill participants’ health worse. Specifically, the evaluation stated how:
Among those in this group who experienced health conditions as a barrier to work, this barrier was more likely to develop than be removed during the 12-month period.
In other words, it suggests the Restart may have actually exacerbated people’s health conditions. However, we obviously can’t solely attribute people’s worsening health to the scheme alone. This is because there may be other factors at work that the analysis did not assess.
Even so, it challenges the narrative that work intrinsically improves people’s long-term health. Many chronically ill and disabled people know this isn’t the case, and have routinely called out this ableist rhetoric, dressed up like caring.
Given the new Labour DWP’s fixation on forcing down the numbers of long-term sick people out of employment, the Restart extension with private sector firms like Serco could be cause for concern.
Serco sweeps up half a billion of DWP contracts
Despite all this, the DWP has now extended the scheme, and Serco is once again cashing in. Of course, it cements the private sector profiteer’s control over key arms of the welfare state even further.
Currently, including the extended Restart Scheme, it holds two further active contracts with the DWP. As the Disability News Service (DNS) reported in October, one of these is to carry out Personal Independence Payment (PIP) and WCA assessments. Serco boasted its contract with DWP was worth around £350m.
Alongside this, the department gave Serco part of the contract for its Commercial Agreement for Employment & Health Related Services (CAEHRS) programme. Again, this presents itself as an employment support scheme. In effect though, it revolves around pushing chronically ill and disabled people into work. In this instance, Serco and other selected contractors are in charge of procuring health related services to do this.
Notably for this, the DWP awarded the £7.5bn contract to 28 separate providers. The exact slice the department is forking out to Serco for this isn’t clear. However, it’s likely millions more on top of its two other contracts. In other words, it means that Serco has its mitts on well north of half a billion pounds worth of the UK’s welfare state.
Profits for the private sector
New Labour government, the same old infamous profiteering firm sinking its claws further into the welfare state. Another DWP contract worth hundreds of millions puts paid to the idea that Labour’s Back to Work agenda is anything other than a money-making scheme for parasitic private sector capitalists.
But as always, the DWP-private outsourcing company nexus will harm marginalised people the most – shunting them into low-paid work whatever the cost.
Feature image via YouTube – Young Scot Corporate/the Canary
