Number geeks point out that, as stunningly bad as the Work Programme figures are, they are actually slightly worse than they look. Between 1 June 2011 and the end of July this year 877,800 people were referred to the Work Programme and only 31,240 people got jobs and stayed there long enough (three or six months) for the relevant company to get paid. This is 3.4%; the Department for Work and Pensions' lowest expectation was 5%. But if they had done this evaluation in the regular way – June to May, rather than June to July – the figure would drop even lower: 2.5%. And yet I remain unstunned, because I knew the Work Programme figures would be awful.

I knew because Working Links, proud holder of Work Programme contracts worth £307,752,305, put out a press release a few weeks ago saying they'd found 40 people jobs in McDonald's. It's not exactly specialist knowledge, is it? "Psst, I know this low-profile employer that never advertises, but just might give you a trial … Ronald McDonald."

I knew because the National Council for Voluntary Organisations has published its experiences. This programme was never intended to work with only these giant providers (primes). Large companies were meant to refer a lot of clients to smaller ones (subs), often voluntary or social in purpose. And yet over a third of subsidiaries had no referrals at all; 15% had had between one client and 10. Many had walked away, and a fair few had gone bankrupt.

So either the primes were doing so well that they suddenly didn't need these subsidiaries, or so badly that they were "parking and creaming", which is what happened in Australia and the Netherlands when they had a system like ours: gargantuan companies competed aggressively for government contracts on price – parking the impossible people, creaming off the easy cases (the ones who walk in wearing a suit having just been made redundant) often into jobs they're overskilled for, and only working on the ones in the middle.

The Australian and Dutch governments have stopped asking companies to compete on price for exactly this reason – it creates perverse incentives that serve the contract and not the unemployed person. These comparisons should have warned anybody at the DWP that, having created the same system, they would repeat the same mistakes.

I knew the figures were probably screwed because, as the New Statesman pointed out on Monday, the DWP was trying to "hose down expectations" ahead of their release: "As the Work Programme supports people for two years or more," the employment minister, Mark Hoban, wrote to MPs in a letter leaked to the Statesman, "it is too early to judge Work Programme performance by Job Outcome and Sustainment Payment data alone." It's so lame as to be almost frightening, this assertion that a programme designed for two years can't possibly be evaluated at 14 months. But nobody was frightened, because anybody interested had already guessed.

Most of all, though, I knew the numbers wouldn't look good because we're in a double-dip recession, and it takes a lot more than a can-do attitude and a pristine CV to land that job when there are 34 other people going for it.

By the rules of gotcha politics, this is the time to point out the arrogance of David Cameron, calling Labour's Future Jobs Fund a failure when actually it was quite good. It's always amusing to note the amateurish flapping of this government, and last Thursday Iain Duncan Smith, on Question Time, was bugling his success in bringing a revolution to the prospects for the unemployed, compared to the way they were left to rot by the last government. In fact, the Work Programme is the most clanging failure in the history of this country's welfare market.

IDS either knew this, in which case he was trying a bit of Fox Newsification, creating so much noisy counterclaim that people conclude it's too complicated and walk away. Or he didn't know. And that's not great either, when the rest of us all knew. But there are philosophical and practical points that need to be addressed – but won't be if this turns into an adversarial dingdong between two parties that essentially believe the same thing, that the way out of unemployment is to deliver huge contracts to profit-driven enterprises. This was never just Tory policy. This is everybody's policy.

We need to ask if payment by results works at all. Is money a good enough lever to stimulate better performance by Serco or A4E, or does it, conversely, encourage them to game the system?

Even more urgently, we need to ask why London Citizens, on no money at all, managed to find jobs for 1,500 east Londoners, when Seetec – a company with contracts worth £220,177,010, including the one for this area – performed woefully: 2.9% over that slightly distorted period of 14 months. Is money a particularly good driver for this kind of work? Or should contracts be smaller, and delivered to groups who actually know and care about the area?

Judging an employment scheme in a recession by the same terms as you would judge one in a period of growth demonstrates exactly the same intellectual dishonesty as blaming government debt on extravagance and ignoring the financial crash. We need to judge it more soberly, isolating bad luck (though by all means blame the Tories for the double-dip) from the failures that could tell us something.