Skills, The Benefit System, Welfare to Work

– ALPs: Providers have their say

Association of Learning Providers

Press release – 17 February 2011

Subject: Welfare Reform Bill

‘A sustainable Work Programme is required to make a success of welfare reform’, say providers

The employment and training providers who will be delivering the government’s new Work Programme have welcomed the general thrust of today’s welfare reform announcements, but have expressed serious concerns about the long-term viability of the work-related requirements when their success is crucial in the response to growing unemployment.

While supportive of the general payment by results principles behind it, the providers’ representative body, the Association of Learning Providers (ALP), believes that the design of the Work Programme is fraught with risks which may impact significantly on the number of unemployed people who can benefit from it.  Prior to this week’s news reports, ALP had already expressed concerns to the Commons select committee that the DWP’s volume projections are felt to lack transparency and credibility.

ALP has submitted to the DWP a list of over 10 significant concerns on the Work Programme, which will be introduced under the government’s Welfare Reform Bill published today. Some of these are technical but overall they relate to:

  • the tightness of the programme’s finances and the trickle-down effect of this on a supply chain which is more vulnerable to financial instability than the large prime contractors holding the contracts with DWP
  • the very high performance expectations that equate to the highest levels that the previous New Deals ever achieved in a much more favourable economic conditions.

Prime contractors interested in delivering the Work Programme were required to submit their bids by last Friday and it was noticeable that some had withdrawn from bidding in some regions.  Feedback to ALP from its member providers (no less than 8 of the top 10 DWP providers are members of ALP) suggests a major factor in this is that the high risk contracts will require extensive capitalisation in an economic period of risk aversion by banks and constrained business lending patterns.

The squeeze on the prime contractors may be passed down to the smaller sub-contractors, including many from the voluntary sector, to the point that more providers will drop out of the programme, leaving gaps in provision to which the government will have to respond quickly and at greater cost to the taxpayer.

Graham Hoyle OBE, ALP chief executive, said, “Providers feel that their contract terms are of unprecedentedly high risk to the extent that the whole programme’s operation may itself be in danger – let alone the danger it presents to suppliers. With the programme due to begin in the summer, we call on ministers to urgently reconsider the terms of a fundamental tenet of its public service reforms.”

ALP’s recent submission to the DWP on its concerns about the Work Programme can be downloaded here:

ALP is also calling for a cross-departmental response to the large increase in youth unemployment.  While it has strongly welcomed the government’s backing of apprenticeships, it believes that other areas of provision, such as the DfE’s Foundation Learning programme, for the NEET group need addressing urgently.


Contact Aidan Relf on 07710 305182

Notes to editors:

1. About the Association of Learning Providers

The Association of Learning Providers (ALP) represents the interests of a range of organisations delivering state-funded vocational learning and employment placement. The majority of our 550+ member organisations are independent providers holding contracts with or through the Department of Business, Innovation and Skills (BIS), Department of Education (DFE) and Department of Work and Pensions (DWP), for the provision of a wide-range of work-based and work-related learning. Amongst our members we also have a number of consultants, regional networks, and FE colleges in membership, alongside well over 50 charities, giving ALP a well rounded and comprehensive perspective and insight on matters relating to its remit.

With regard to DWP provision, around 80 of our members have declared they currently hold welfare-to-work contracts, but including subcontractors we estimate the numbers involved in this sector to be considerably in excess of this. No less than 8 of the Top 10 DWP providers are members of ALP, accounting between them for nearly £560m of welfare-to-work expenditure out of a combined spend of over £930m for the Top 40 providers. Combined with the extensive number of DWP subcontractors in membership we therefore expect ALP members to be heavily represented in delivery of the planned Work Programme.

ALP’s website with all recent written submissions can be accessed at:

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