"The National Audit Office report on the coalitions £5bn work programme....predicts that the scheme will fail.......suggests how the firms who run it might be bailed out.... The NAO thinks there is a significant risk.....IDS target of 40%...is "over optimistic"...26% is more realistic.........If firms do start going bust because they don't reach targets, what are the options?........"It is likely that providers will seek to recalibrate prices and other contract conditions during the lifetime of the contracts" it predicts......the NAO says the government must "be robust in it's negotiations and retain competitive tension between providers", in the past the DWP has helped by offering better terms and referring "more easy-to-help participants"
2nd option is to let providers go bust and give its contract to another firm. But the department has a limited number to choose from and, as NAO says "the rates offered to the new provider will be subject to renegotiation". Easier terms, in other words.
The last option is for the department to bring the work in-house: but with all its welfare-to-work eggs in the private contractor basket, it doesn't have the machinery to do this...........while the government "has plans for dealing with a single prime contractor failing, it has not developed plans for dealing with multiple providers failing within and across geographical areas."...........A4E....giving outgoing chief executive Bob Martin a £1m exit bonus on top of his £300,000 salary".
