Local authority leaders have called for all employment support to be devolved to councils rather than contracted out to large providers.

A new report from the National Audit Office (NAO) into the Government’s Restart scheme has revealed that the programme is costing the Government more per person than originally anticipated.

The Department for Work and Pensions (DWP) set up Restart to help people made unemployed by the COVID-19 pandemic. It was backed by £2.9bn of funding.

The scheme aimed to ‘provide intensive and tailored support to more than one million unemployed people and help them find work’ by providing up to 12 months of tailored support. It is delivered by eight contractors across 12 contract areas in England and Wales.

In a new report assessing Restart, the NAO has found that the DWP did not properly assess how many of its claimants would be suitable for the programme or plan for the possible scenario of significantly lower demand before it entered into contracts. This left it with fewer options to reduce the cost when demand was lower.

As a result, Restart is more expensive per person than originally intended. the average expected cost per participant has risen from £1,800 to £2,429. This is greater than comparable programmes such as the Work Programme (£1,760 per person) and the Work and Health programme (£1,560 per person).

Gareth Davies, the head of the NAO, said: ‘The Restart scheme is proving successful in tackling systemic barriers facing people who are long-term unemployed. Fewer people than expected have required support leading to a higher cost per person than previous comparable schemes. ‘For the future, DWP should look at how its contracts with employment support providers can be scaled up and down to respond to economic shocks, while controlling costs.’

In response to the NAO’s report, Mayor Marvin Rees, chair of the Local Government Association’s (LGA) City Regions Board, urged the DWP to give local authorities the power to deliver all contracted employment support.

‘Instead of large providers covering vast areas, which we know can lead to capability and capacity issues, all contracted employment support should be devolved to local government,’ he said.

‘This would lead to more integrated services, better targeting of investment, provision of wraparound support such as on housing, health, training and debt management and working with local and national partners, all of which can be done within a national framework.’