An influential MP has complained that Newcastle College Group (NCG) could still receive government bonus payments despite being set to lose a contract to find work for the long-term unemployed.

The Work 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.

But FE Week reported in March that NCG had been issued a 12-month notice of termination by the DWP for its contract covering the North East Yorkshire and the Humber region.

A DWP spokesperson said at the time this was because NCG’s contract was the “lowest performing when assessed against a range of performance measures”.

But chair of the House of Commons Public Accounts Committee (PAC) Margaret Hodge raised concern on Thursday (November 6) that underperforming providers including NCG could still be paid bonuses.

The Barking MP, who was speaking following her committee’s publication of a report on the Work Programme, said: “The DWP has designed the contracts with providers in a way which exposes the taxpayer financially. Underperforming providers may still be able to claim bonus payments for 2014-15 because of the flawed performance measure whereby the fewer clients referred to a provider, the better their performance looks. This may include NCG whose contract has been terminated.”

The contract for North East Yorkshire and the Humber, which will terminate in March, is delivered through NCG’s subsidiary, Intraining, and up to eight subcontractors.

David Jessop, chief operating officer of Intraining, said: “This [PAC] report looks at historic data from the start of the Work Programme almost three and a half years ago, when our performance at the start did not achieve our expected standards.

“By the time the PAC considered this report in the summer we had already vastly improved our performance and by then were ranked eighth nationally, in the top quarter of performers. We are now exceeding DWP’s latest performance standard benchmarks.

“However, no incentive payments have ever been made to Intraining and we are currently in discussion with the DWP about this aspect of the contract.”

An NCG spokesperson said it was up to DWP to decide whether Intraining deserved bonus payments. He declined to comment on whether it would accept payments if they were offered. Intraining has retained the contract to deliver the programme for Birmingham, Solihull & the Black Country.

A DWP spokesperson said: “No money has been paid out in incentive payments and we are currently negotiating with providers.”

He added: “As this [PAC] report says, the Work Programme is helping more people than any previous employment programme, with over 330,000 people moving into lasting work.”