The coalition's flagship Work Programme for the long-term unemployed is failing because there are just too many people needing help, according to a government report.

The quality of the service is being affected by the high level of demand, according to the companies responsible for training the unemployed.

In some cases firms involved were not able to provide interpreters for those seeking help who did not speak English. It was also found that firms were unable to provide any transport for the jobless in isolated rural parts of the country who needed one-to-one assistance.

In January, the Commons public accounts committee branded the programme as "extremely poor" after it was found that only 3.6% of claimants had moved into work in its first 14 months, far less than the 11.9% the Department for Work and Pensions had expected, and below its estimate of what would have happened without intervention.

The latest analysis is contained in an evaluation of the payment model behind the Work Programme published by the department. Firms involved are given attachment fees for each unemployed person they help, but are only paid a full fee if they find someone sustainable work.

The report said that providers complained they "did not have the funding to provide the level of support they wanted". It added: "Particular issues reported as resulting from a lack of funding included an inability to pay for interpreters and for participant transport in rural areas. Some subcontractors felt this also had an impact on their ability to meet the needs of particular groups of participants."

Another provider said that due to the high numbers of unemployed people needing help too often "support was provided online or in group sessions, with one-to-one support used only where necessary".

One firm told government officials compiling the report that they were "very limited in the amount of time" they could allocate to each person.

A individual at the firm, which was not named in the report, is reported as saying: "We try and provide as much added value in the programme as we can possibly afford. So, for example, things like basic skills support, it's very expensive to provide that.

"We do try and provide it as best we can but not to the level that would really make a difference to the customer."

The report suggests that further research is required on how economic conditions have affected investment in support. A government spokesman said yesterday that the work programme had already put more than 207,000 long-term unemployed into work. He added that the scheme was providing value for taxpayers.