Data obtained exclusively by Channel 4 News shows that the welfare to work company A4e secured sustainable jobs for just 3.5 per cent of its job-seekers under the government's flagship Work Programme.
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The data, which both the company and the government have refused to release, reveals a company failing to meet the minimum targets set for it by the government in the first year of the Work Programme.
A4e is the second largest provider of the programme, which aims to get those out of work for a year or more back into work. The company has contracts to run the programme in the East Midlands, east London, Merseyside and Lancashire, the Thames Valley area and South Yorkshire.
Channel 4 News has learnt that in the year ending March 2012, 10 months after the programme was launched, almost 115,000 people were referred to the A4e under the Work Programme. Of those just 4,000 have managed to obtain jobs that lasted 13 weeks or more - the length of time the government determines as a successful outcome.
Contract worth £45m
Channel 4 News has calculated that under the terms of the Work Programme, which pays providers a fee for each client referred and subsequent fees when clients have been in work for 13 weeks or more, the company has received over £45 million from the taxpayer. But that may not be enough to keep the company in business.
A4e's average success rate across the country was 3.5 per cent - well below the 5.5 per cent minimum set by the Department of Work and Pensions under the terms of their contract.
In some areas performance was well below that average. For example in the Thames Valley area, the success rate was 2.8 per cent.
In the east London area, where almost 25,000 people are on a4e's books, just 830 people have secured jobs lasting 13 weeks or more. That equates to a success rate of just 3.3 per cent.
Read more: Arrests made at government contractor A4e
Failure in 'Olympic' borough
Even in the London borough of Newham, which has seen thousands of jobs created through the Olympics, the company has a very poor record: of 2,837 people referred to Newham A4e, just 92 got a sustainable job.
By comparison, the London Borough of Newham, which has established its own job support scheme, says it has secured sustainable jobs for 5,000 people in the last year alone.
The company has had more success at getting people to start jobs: 18.5 per cent of clients started a job in the first 10 months of the programme. But the evidence suggests not many of those jobs lasted the 13 weeks the company needed to get paid by the government.
Ian Mulheirn, Social Market Foundation director, who analysed the numbers for Channel 4 News, said the information raised major questions about the sustainability of the government's programme, which has been hailed as a "revolution" in welfare reform that would get millions of people off the dole and into work.
"It could be a reflection of poor performance," he said. "I think most obviously it's a reflection of over-ambitious projections from the Department of Work and Pensions (DWP) about what was possible with these programmes."
Mr Mulheirn says if the figures are reflected across the programme, the government will have no choice but to change the terms and conditions of the programme, as providers won't have enough money to provide a proper service.
Margaret Hodge, the chair of the public accounts committee, which has been investigating A4e and other welfare to work providers, called the figures "abysmal" and called on the government to release all the data about the performance of the Work Programme in its first year.
However she said she was not surprised. "We have had a relentless stream of emails, brown envelopes from people…who have worked for A4e complaining about poor performance, allegations of fraud and malpractice," she said.
Programme is a 'scam'
Current and former clients of A4e have spoken of poor service at the company. Philip Hammond, who is currently on the Work Programme in Bootle, Merseyside, described the programme as a "scam". He told Channel 4 News that in six months he had had just one face to face meeting with an advisor, and two phone calls. He had not obtained a single job interview through the programme. He says the company is "not fit for purpose."
Karen Turner, who was also placed on an A4e scheme described the process as "humiliating". She told Channel 4 News she was told she had to take a Chlamydia test on her first day on the programme. The service was so poor she said, she eventually complained to her MP.
Tonight A4e told Channel 4 News:
"The Official WP [work programme] statistics will be published in the Autumn following rigorous auditing and data matching by DWP. As a provider, under the terms of our contract, we do not have permission to disclose or comment on performance data before that point." It added: "The Work Programme is just one year into a five year, outcome based, programme. The statistical data will undergo robust validation in DWP, compiled and released in accordance with the Code of Practice for Official Statistics. Any data released before then is therefore unreliable and risks misleading the public as to the performance of the Work Programme.
A Department of Work and Pensions spokesperson said in a statement:
"The period covered by this data makes it virtually impossible for any provider to have built up a significant number of job outcome payments, most of which are only payable after someone has found a job and stayed in it for six months. To try to draw conclusions when most people have not even been on the programme for six months would be ludicrous."
The statement continued:
"The department has already announced its intention to produce Official Statistics on job outcomes and sustainment payments for all providers in the autumn. This will provide a reliable picture of performance, rather than quoting figures where it is unclear how they have been prepared or whether they are correct. The Code of Practice for Official Statistics lays down that no-one, including Ministers, should disclose these data before the official statistics based on them are released."
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