The government's flagship welfare to work scheme has come under fire after official figures show it is still failing to help the most disadvantaged people into jobs.

Just 5.3% of people on incapacity benefit were helped into employment for at least six months by the Work Programme in its second year of operation, well below the government's minimum performance benchmark of 16.5%.

Providers also failed to meet the contractual benchmark for getting young people aged 18-24 off unemployment benefit and into jobs, and marginally missed the minimum target for getting jobless clients aged over 25 into sustained work.

Across the three jobseeker groups, succesful job outcome levels stood at 24.9% against contracted levels of 27.5%.

Ministers were upbeat about the data, claiming that more than 130,000 jobseekers had "escaped long-term unemployment and found lasting work" as a result of the work programme.

"The improvement in performance over the past year has been profound and the scheme is getting better and better," said employment minister Mark Hoban.

However, Anne Begg, chair of the Commons work and pensions select committee, said the data showed that while the programme could work for "mainstream" job seekers, it was failing to meet the needs of those with disabilities or long term health conditions.

She said: "We remain deeply concerned that the Work Programme, as currently designed, is insufficient to tackle the problems faced by more disadvantaged jobseekers."

Dave Simmonds, chief executive of employment thinktank Inclusion said: "There are positive signs for the future but we need to remember that the programme is still struggling to get to the minimum performance after two years."

A separate report published by the Salvation Army says serious design flaws in the work programme result in it being contractually obliged to devote resources to clients who do not need support to get into work, leaving it unable to properly help those who need more intensive help.

It is also critical of "inappropriate and counterproductive" penalties imposed by Job Centres on clients for often trivial reasons. Stopping some clients' benefits are "highly unlikely to increase their chances of moving into work and out of welfare dependency successfully".

The Salvation Army, which is a Work Programme subcontractor supporting 6,000 clients, says as a result the early months of the work programme were "chaotic". It concludes: "The Work Programme is working, but it could be working even better."

Ian Mulheirn, director of the Social Market Foundation thinktank, said that while the official figures represented a big improvement on the first year of the programme, failure to meet the targets could put some work programme providers in danger of having their contracts terminated.

He said: "Poor performance against the DWP's minimum levels cannot be taken as evidence that providers are doing a bad job or that the scheme offers poor value for money: we simply do not know whether an alternative approach would fare better or worse in current economic conditions.

"But what it does show is that the scheme was poorly designed with serious consequences for long-term unemployed people"

Ministers launched the £5bn work programme in 2011 with the explicit aim of getting 2.4m long term unemployed and sickness benefit recipients back into the job market.