Work Programme charities exposed to financial risk, according to NCVO

The National Council for Voluntary Organisations (NCVO) has warned that the Work Programme could threaten the sustainability of many of the charities involved.
The umbrella body has published research that indicates that more than half of the charities delivering the welfare-to-work programme said their prime contractor had not protected them from financial risk, as they are required to do.
The research shows that 39 of 72 charities surveyed by the NCVO said their prime contractor had not shielded them from financial risk and a further 14 said their prime has only done so to a small extent. Twelve said their prime contractor had shielded them to some extent and just two said they had been protected "extensively".
According to the Merlin Standard, the supply chain agreement between the Department for Work and Pensions and welfare-to-work providers, every prime contractor should be able to demonstrate "how its funding arrangements support and provide equitable risk transfer, including financial risk for small, specialist and third sector providers".
Under the programme, groups delivering services must fund the work themselves and are only paid by the DWP once a person from their programme has completed six months’ employment.
Sir Stuart Etherington, chief executive of NCVO, said: "The prime contractor model is supposed to safeguard small providers from financial risk, but these findings suggest it is currently falling far short of expectations. The Government must take these concerns on board and ensure that no bad practice is allowed to slip through the net."

[from: Third Sector Online 17.1.12]