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Deloitte to offload stake in government Work Programme

DELOITTE is selling its stake in the government’s flagship Work Programme, prompting claims the government has failed to create a viable market in the welfare-to-work industry.

The Big Four firm is selling its 50% share in Ingeus, one of the private companies operating the scheme, the BBC reports.

Through a 2011 joint venture with Ingeus, Deloitte was selected as one of 18 prime provider companies to help tackle long-term unemployment as part of the government initiative. Under the scheme, companies receive a fee for referrals and when people are placed in jobs.

According to Richard Johnson, a parliamentary consultant to the Work and Pensions Committee, the contracts will not be viable when discounts offered by the bidding companies kick in next year.

“Deloitte joined Ingeus in order to bid for and secure these contracts. And if I were Deloitte I would see this as a very good time to exit that market,” he told the BBC.
Those discounts – of up to 30% and more on the DWP’s suggested price – take effect next financial year at the same time as the government is withdrawing up-front referral fees, leaving companies paid by results alone.

“At this price, these contracts are not viable,” Johnson said.

Deloitte declined to comment.

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