MPs have called on ministers to reveal how much of a £55 million pot earmarked for testing the new jobs and careers service has already been spent and how it plans to allocate the rest.
In a public accounts committee report into the Department for Work and Pensions (DWP) on jobcentres published today, MPs warned that it was not “fully clear” how the department is spending the money to merge the National Careers Service with job centres.
The PAC said it was already several months into the financial year and highlighted the urgency of allocating £55 million to develop and test the new jobs and careers service in 2025-26 instead of making “rushed decisions at the last minute”.
DWP announced this time last year that it would overhaul Jobcentre Plus to focus on career advice, one of the Labour party’s pledges ahead of the 2024 general election.
The merger also came in line with the government’s target to raise the employment rate to 80 per cent.
The 2024 autumn budget announced £55 million would be used for the merger. The ‘Get Britain Working’ white paper followed, which said the money would be used to trial a “radically improved digital offer” and creating a more “personalised” service for jobseekers.
It also said the government would introduce coaching academies to upskill jobcentre staff.
The overhaul is part of a phased approach to a new jobs and careers offer. The government told PAC officials that it had spent some money the first phase for 2025-26, comprising the coaching academy and developing the digital services.
“The department envisages a ‘pyramid’ of support where many people will be able to access and self-serve using digital services, what it called a ‘jobcentre in your pocket’,” the report said.
It has also spent funding on “pathfinder projects” in some parts of England. Last month, Wakefield was announced as the first area to trial the “pathfinder” scheme, which comprises working with local employers to provide a “pathway into good jobs”, according to West Yorkshire Combined Authority and Wakefield Local Authority.
However, leaders did not specify how much funding was allocated to the pilot.
Today’s report said: “It has not fully allocated the £55 million in extra funding, and that funding is still available for good proposals coming forward from different parts of the organisation. It also did not indicate how much of the £55 million has so far been committed and how much is left to be allocated.”
It added that the DWP investment committee “closely controls” how it will hand out the funding and will commits money for different proposals in “packets”.
DWP officials told the PAC that the second phase would be rolling out initiatives that have worked, such as a trial placing work coaches in GP surgeries and engaging people outside of jobcentres.
The report said: “The department referenced a success story from Poplar in London, where it has seen positive results of people having conversations with a work coach in a setting that is not the jobcentre and getting different types of support. It said that it has a presence in the GP surgery and community centre, and that it is running practical and skills classes. It stated that results in the Poplar example seems to be making a big difference for people who are long-term unemployed.”
However, the report detailed concerns from MPs on the government’s ability to rectify the shortage of work coaches caused by the DWP securing “inadequate funding” from the Treasury and by recruitment and retention challenges.
Sir Geoffrey Clifton-Brown, chair of the committee, said the government’s “apparently complacent” assurances that the work coach shortage would be mitigated by redeploying 1,000 coaches in 2025/26 “held no water with this committee”.
“The support provided by work coaches in jobcentres is critical to help people find employment and progress in work,” he said.
He added: “DWP has not had the funding for the work coaches who are trying to provide support in the here and now, while being allocated £55m to test out new approaches. At the time of our report it was not entirely clear how this money was being spent.”
The PAC also said although it supports the government’s long-term ambition of an 80 per cent employment rate, it is likely to be “very challenging”.
It therefore recommended the DWP should within six months work with other departments to publish a roadmap for meeting the target.
DWP should also set out the specific contribution of jobcentres to this ambition, including the arrangements for monitoring their performance, MPs added.
“Our report suggests the approach taken by government to achieve this radical shift and help individual claimants access the jobs market is currently in a muddle,” Clifton-Brown said.
A DWP spokesperson said: “We are ending the tick box culture that has existed in Jobcentres by delivering the biggest reforms since the early 2000s, giving staff the flexibility to offer a more personalised service to jobseekers – so they can be helped into good, secure jobs.
“We are also trialling ways to bring Jobcentres into the 21st century, using the latest technologies and AI to provide up-to-date information on jobs, skills and other support and freeing up their work coaches to help them.”
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