$43m payout gives 1-in-2 success rate

Photo / Kenny Rodger

In the past four years the Government has given private contractors $43 million to find work for about 26,000 jobless people in Auckland, the East Coast and Northland - but only half of them obtained work.

The Ministry of Social Development describes the success rate as "commendable" in light of the number of jobs available in recessionary times.

Documents released to the Herald under the Official Information Act show several providers hired by Work and Income had a perfect record for moving people into work, but others found barely any jobs for clients who completed programmes.

Among the worst performers in 2010-11 were Multiskill in Northland ($28,979 for 46 clients and eight jobs), Auckland Pasifika Consulting ($46,088, 80 clients, 12 jobs), the Strive Community Trust ($184,888, 45 clients, eight jobs) and the Salvation Army ($167,573 for 23 clients and three jobs).

In 2008-09 in Auckland, Patangaroa Entertainment was given $24,000 to work with eight clients, but none found work afterwards.

The same year in Northland, Northpoint Services Trust received $53,199 to work with 85 people, but only four obtained jobs.

MSD chief Peter Hughes said providers had performed well overall.

"The economy and the number of people on the unemployment benefit has tightened," Mr Hughes said.

"Maintaining the placement performance on or about 50 per cent in these labour market conditions is commendable, given the nature of some of the people the organisations are working with."

People who did not find work at least learned skills that made them more employable, he said.

Each programme catered to a unique set of clients and circumstances, and contracts were reviewed yearly. If it had not performed, the contract was either changed or cancelled.

Providers worked with a range of people including those with health and disability issues, people from migrant or refugee communities, some who have been jobless for several years, and recently released prisoners.

"In the 2010-11 year, there were four contracts where the ratio of participants to the number of people placed in work did not meet our expectations," Mr Hughes said.

Two of those contracts were subsequently cut in half, one was cancelled and one was given a performance plan.

"These four contracts represent only 3 per cent of the total amount for the providers in 2010-11."

Mr Hughes said one of the contracts halved was for the Salvation Army to work with disadvantaged people, including the homeless.

The cancelled contract was with In-Work NZ, which has received more than $1 million in contracts last year, with only a 40 per cent success rate.

The previous year, In-Work NZ also received more than $1 million, with a 29 per cent success rate.

Contractors with a 100 per cent success rate were generally in vocational services where the employer places and then retains people in jobs.

COUNTING COSTS

Providers contracted by Winz in Auckland, East Coast and Northland:
* $9.45m in 2007-08 for 5681 people; 2884 found jobs.
* $9.34m in 2008-09 for 5812 people; 2898 found jobs.
* $9.53m in 2009-10 for 5899 people; 2946 found jobs.
* $11.42m in 2010-11 for 7380 people; 3884 found jobs.
Providers contracted by the Tertiary Education Commission, but taken over by Winz:
* $3.32m in 2011 for 1027 people; 372 found jobs.
Total of $43.06m from June 2007 to August 2011 for 25,799 people; 12,984 found jobs.