Firms in the work programme are paid to hire benefit claimants to prepare them for work, but are more likely to hire those already job-ready.
An official assessment has found that they are slow to give jobs to those who are long-term unemployed because of sickness.
York University professor Roy Sainsbury has said that the programme is giving priority to “job-ready” claimants ahead of those who have been unemployed for long periods.
In the first official evaluation of the work programme before Christmas, the report by York university's social policy research unit, says private firms, which are paid for getting an unemployed person into a long-term job, are seeing their most job-ready participants more frequently than those with more severe barriers to work.
The overall outcome from the research concluded it was too early to make any decisions from the results as new programmes are likely to have teething problems, but Roy Sainsbury, professor at the social policy research unit, said:
The philosophy of the government's plan was that you would give huge amounts of money to get someone into work if they had had, for example, an alcohol problem.
[It appears] there's no evidence that firms are responding to those incentives.
Under the work programme firms can get between £4,000 and £14,000 for every job given to an unemployed person participating in the scheme.
A spokesperson for the Department for Work and Pensions said:
We pay organisations more money for getting those with more complex needs into work and give them two years to work with job seekers – so there's a clear incentive for them to help every participant.
To the reports last month about the ineffectiveness of the work programme, which was meant to be a radical change by the Coalition Government, Margaret Hodge, the Labour chair of the Public Accounts Committee, said:
This first analysis of the Work Programme performance figures shows the extent to which the scheme is failing participants, and particularly the young and the harder-to-help. Against a contractual target of 5.5 per cent, the lowest performing provider did not manage to place a single person in the under 25 category into a job lasting six months.
The Work Programme was specifically designed to incentivise providers to assist those furthest from the work place, but the appalling performance for ESA ex-incapacity claimants demonstrates how this experiment simply is not working.
Between June 2011 and July 2012, of the some 9,500 ex-incapacity claimants referred to providers, I am astonished that only 20 people have been placed in a job that has lasted three months.
There were also numerous charities that withdrew from the scheme in December when they were informed that people who suffer from with long term illnesses could now be forced to work indefinitely for their out-of-work benefits, as a result of new government rules.