Not only did the Department for Work and Pensions (DWP) hand a harmful “back to work” contract extension to notorious private outsourcing company Serco, but it also awarded it to seven other controversial suppliers. Significantly, these companies have mostly been operating the government’s key Universal Credit work programme – the Restart Scheme – since 2021.
However, to date the scheme has failed to help most participants into long-term work. Worse yet, it has harmed chronically ill people the DWP has forced onto the programme. Despite this, the department has awarded the same eight failing suppliers a total of over £1bn over the next two years.
DWP: Serco and other private sector profiteers
The Canary previously reported that the DWP had awarded a £175m contract extension to infamous private contractor Serco. Specifically, it did so for the firm to continue operating the department’s mandatory Universal Credit work programme – the Restart Scheme. We wrote that:
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.
Now, the government has officially published the contracts for this extension. The DWP posted these on the government’s ‘contracts finder’ portal. However, it has redacted much of the information throughout the documents. As such, they provide just one figure: the ‘Anticipated Contract Value’.
Notably, this isn’t the amount the DWP will pay the suppliers solely for the new extension. Instead, it’s the total value of the contracts to date, including this additional award. In other words, it’s an estimate of the full value the DWP will have paid each contractor by the close of the scheme. As such, it also factors in what the DWP has paid each supplier up to this point.
Yet while the government’s newly published contracts doesn’t disclose the amount it’s funnelling to these companies for the extension contracts, its public tender service does.
As a result, the Canary identified that the DWP is paying the eight private outsourcing companies the following:
- Serco: £175,481,723 (two contracts).
- G4S Facilities Management: £71,191,756.
- Reed and Partnership: £189,725,306 (two contracts).
- Ingeus UK: £217,076,769 (two contracts).
- Maximus UK Services: £213,872,634 (two contracts).
- Jobs 22: £90,815,873.
- Fedcap Employment: £73,311,553.
- Seetec Pluss: £61,085,447.
Underperforming for killer profits
In total then, it means the DWP is paying these eight private sector companies over £1bn. This is on top of the more than £1.5bn it has already awarded to them before the extension.
Crucially, the department is throwing this new gargantuan sum at these companies after their repeated failures to date. Notably, we previously highlighted how these firms weren’t hitting performance targets set by the DWP.
Specifically, these set out the number of Universal Credit 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.
But, we identified that these companies hadn’t come near to meeting the bare minimum target threshold. 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.
Now, the new Universal Credit contracts show that the DWP is setting the MPT for the next two years at 28% – just 1% above its previous base target. In other words, it’s STILL asking suppliers to help less than a third of scheme participants into work – but paying it exorbitant sums for it.
More tellingly, the DWP has redacted information on the stretch goal – the Tender Performance Target (TPT) – from the new contracts. In particular, the DWP bases the TPT on:
what providers claimed they could achieve in their bids for the contracts.
In other words, here, the contracts would show what each company has pitched it can deliver. By obscuring these, the government has currently hidden what these companies are promising to the DWP. Previously, it set the TPT at a low 36% of participants getting into long-term work during or after the scheme. Given these private contractors have fallen far short of this measly target to date, it’d be surprising if the redacted figures revealed anything remotely more ambitious.
Largely though, as the Canary pointed out before, the data on this is mostly inconsequential. This is because it doesn’t factor in the percentage of participants who would have entered long-term “sustained work” without the scheme’s help. In that way, the DWP provides no way of knowing how helpful the scheme actually is to people. Nevertheless, the department’s own estimates for the scheme suggested this would be pitifully low – just six in every 100 participants.
Moreover, the DWP centres its so-called job outcomes on the government’s paltry National Living Wage. We highlighted that this falls well short of the real living wage – in other words – the true cost of living.
Overall, Restart revolves around the premise that work is always a positive outcome. Exploitative employers paying poverty wages shows that this isn’t necessarily the case. But this wasn’t the only challenge to this misguided narrative either. The Canary also found that Restart had harmed chronically ill participants. Specifically, forcing people into work had actually made their health worse.
Private companies with a history of harm
Of course, while the Canary previously honed in on Serco since the company announced its new contract, the Universal Credit Restart Scheme failures apply to all these corporations as a whole. In short, all eight private outsourcing companies are underperforming on government targets. All eight are putting chronically ill participants at risk.
Again however, this should come as no surprise. That’s because many of these profiteering corporations’ reputation precedes them.
Like Serco, Maximus has long had its claws in the DWP. If its name rings (alarm) bells, that’s because it should. For one, Maximus was the infamous company behind the 2017 Work Capability Assessment ‘Kill Yourself’ scandal. This was where the benefit assessor had been asking claimants why they hadn’t taken their own lives.
But its record didn’t get better from there. Crucially, Maximus has overseen the process for many vulnerable claimants – and sometimes to fatal effect. Notably, this includes the claimant deaths of Alan McArdle, Jodey Whiting, and more recently, Philip Pakree.
However, despite repeated failures and scandal, the DWP just keeps flogging the company new contracts. Currently, aside from its Universal Credit Restart Scheme extension, it holds five active contracts with the department.
Similarly, Seetec has had a long and torrid history with the DWP. In 2014, a disabled campaigner described a Seetec-run DWP work programme as having a “sanction first, ask questions later” approach to claimants. While a provider for the programme, Seetec had referred more claimants for sanctions than any other company. Unsurprisingly, this scheme too utterly failed disabled claimants.
Granted, this Seetec scandal is from over a decade ago, but do profiteering corporate capitalists ever really change their stripes? More damning testimony from participants of a back-to-work scheme in Ireland suggests not really. As the Canary reported in 2019:
A research group based at the Waterford Institute of Technology (WIT) recently gave evidence to a government committee about its investigations into the scheme…They described JobPath as “a system that actively and capriciously patronises, cajoles, threatens, manipulates and, at times, bullies”.
Now, the glaring discrimination against chronically ill people and Restart’s dire results only evidence this all the more.
Putting chronically ill and disabled people at risk for profits
Then, there’s G4S. The firm has profiteered off of multiple arms of the UK’s carceral infrastructure – from immigration detention to the criminal justice system. In each instance, the company has been dogged by rap-sheet of scandal. From a violent and racist culture of abuse at its Brook House detention centre, to fines for multiple counts of fraud, it seems like a company the DWP shouldn’t touch with a barge pole.
However, this is not the case. Right now, G4S has two further active contracts for services with the department. Currently the company is also embroiled in ongoing labour action with its Jobcentre security staff. The profiteering company’s exploitative labour practices for these employees has led to strike action and resulting Jobcentre closures. Consequently, as the Canary pointed out – once again, it’s claimants that suffer from this.
In reality though, none of these scandal-hit private sector opportunists should be anywhere near welfare services. Repeated allegations, failures, and continued claimant harm should be reason enough the DWP ends this perpetual privatisation fiasco. However, with ardent neoliberal capitalist Liz Kendall at the helm, it’s not probable.
Ultimately, Restart’s aims sit neatly with Labour’s back-to-work agenda. So far, the new Labour-led DWP has given little reason to believe the abuse of chronically ill and disabled claimants is going to change. Now, the DWP putting the same slate of failing, profiteering firms behind the wheel shows that this is only too likely the case.
Feature image via the Canary
