A multi-million pound government contract to find work for long-term unemployed people has been taken off NCG (formerly Newcastle College Group).
The programme was launched by the Department for Work and Pensions (DWP) three years ago for private, public or voluntary organisations to help people find people jobs.
The notice of termination has been issued under the voluntary break clause in the contract and not for any breach of contract by NCG.”
But NCG, which had been the only FE college group with a contract for the programme, has been “issued a notice of termination” by the DWP.
A DWP spokesperson said NCG’s contract was the “lowest performing when assessed against a range of performance measures”.
There are 40 other regional contractors and all the poor performers have been asked to produce improvement plans — apart from NCG, whose contract was terminated with 12 months’ notice.
The DWP spokesperson added: “Over the next few months we will be conducting a procurement competition to identify a replacement provider.
“The notice of termination has been issued under the voluntary break clause in the contract and not for any breach of contract by NCG.”
The NCG contract, for north east Yorkshire and the Humber, was delivered through its subsidiary, Intraining, and eight subcontractors. Its Midland contracts were unaffected.
Phil Bonell (pictured), managing director of Intraining, said: “We are extremely disappointed, especially as we have made significant improvements over the last 12 months thanks to the hard work of our staff and subcontractors.”
The DWP pointed out that only 7.4 per cent of unemployed people placed with NCG had been found a job they stayed in for at least 12 months (by September last year) — the worst conversion rate in the country. The national average was 10.7 per cent.
DWP paid NCG an initial £400 registration fee per person it registered. One-off “outcome” payments worth up to £3,500 per person would also have been paid to NCG whenever someone stayed in a job long-term (in most cases for at least six months).
It would then have been paid up to £350-a-month for up to 20 months each person subsequently stayed in their job. It had received 19,430 registration payments by September last year, but only 2,400 stayed in a job long enough to secure outcome payments.
An NCG spokesperson said it employed around 80 staff, either directly or via subcontractors, through its work programme contract. She said it was unlikely there would be job losses as
they were all covered by TUPE regulations.