The government’s flagship scheme to tackle long-term unemployment has so far found a job for only 7% of the people enrolled. The £2.9bn Restart programme, launched by Boris Johnson and Rishi Sunak last year, is supposed to provide up to 12 months of support for people who are long-term unemployed to help them return to work.
But figures released in response to a written parliamentary question from Labour’s shadow employment minister, Alison McGovern, show that only 16,180 of the 226,785 people who had started on the scheme had subsequently left it for reasons including starting a job or moving off universal credit’s intensive work-search regime.
“This is completely damning,” said McGovern. “We’re supposed to be in a vacancies crisis and these people are trying to get back into work.”
No participants have yet exhausted the 12-month maximum support period offered by the Restart scheme, which is mandatory for benefit claimants referred on to it by jobcentre work coaches, and is delivered by private contractors including Serco, G4S and Maximus, paid mostly based on results.
“Unfortunately, despite spending over £2.5bn on Restart, the government’s incompetent [Department for Work and Pensions] is better at farming out dud schemes to G4S and Serco than finding people work,” she added. “It’s no surprise that these figures show that this government’s failure is most pronounced in the north-west and Greater Manchester.”
Across those two regions, 1,370 out of 29,720 starters on the scheme have subsequently left it – nearly 5%.
Restart is also struggling to find enough participants to meet predicted caseload numbers – the roughly 225,000 people who had started the scheme by the end of April is 40% below the 375,000 who were initially forecast to have joined by that point. Restart’s eligibility criteria have been extended to enable more people to be referred to the scheme.
Tony Wilson, director of the Institute for Employment Studies, said the scheme was falling short on referrals because long-term unemployment was much lower than predicted during the height of the pandemic, while “inactivity” caused by people dropping out of the labour market has increased.
“The government committed significant funds to address an unemployment crisis that hasn’t materialised. We haven’t had mass unemployment. And instead, we’re facing a participation crisis. So the crisis we prepared for isn’t the one we’ve got,” he said. “Employment is still half a million below pre-pandemic levels. Economic inactivity is 400,000 higher than it was before the pandemic began.”
The DWP’s Kickstart youth unemployment scheme fell 90,000 short of its 250,000 job-creation target when it closed earlier this year. The resulting underspent money was taken back by the Treasury, and any underspend on Restart is likely to go the same way. Wilson said it should be invested in tackling economic inactivity instead.
“We’ve got the highest rate now of economic inactivity, of worklessness, due to long-term ill health that we’ve had in 20 years. That’s long Covid, that’s NHS waiting lists, that’s mental health problems getting worse during the pandemic. We’re not doing anything to address any of these factors that have driven the fall in the labour force that’s driving economic inactivity, that’s leading to labour shortages. Instead, the money’s simply going back to the Treasury because unemployment is so low.”
A DWP spokesperson said: “Thanks to our balanced approach to managing the economy, unemployment is its lowest since 1974 at 3.7%. Less than a year after its launch, the Restart scheme is already supporting a quarter of a million people who have been long-term unemployed – with more to follow. Providers are paid on the basis of how many jobseekers they manage to support into work, delivering value for the taxpayer.”
• The headline and introduction to this article were amended on 8 June 2022 to reflect job placements under Restart “to date”. An earlier version said the scheme had “failed to find a job for 93% of people enrolled”; while this proportion are still out of work, the DWP contacted us after publication to emphasise that the “the vast majority” of participants were still on or just beginning the 12-month programme, although it did not respond to the Observer’s request prior to publication for the number of people who had enrolled since January 2022.
