The companies running the Government’s flagship scheme to cut joblessness have backtracked on promises to focus on hard-to-help claimants, a MPs’ report published today says.

The Public Accounts Committee denounced the failure to target more help on the most difficult cases as a “scandal”.

Firms operating the Work Programme are spending less than half the amount they had originally pledged on claimants with disabilities such as mental health problems. Such groups are being “parked” as the firms focus on finding jobs for people considered easier to help into employment, the PAC said.

In a damning verdict on the programme, which was launched three years ago, the MPs accused Iain Duncan Smith’s Department for Work and Pensions (DWP) of failing to give incentives to providers to support harder-to-help claimants to find a job.

Almost 90 per cent of claimants of Employment and Support Allowance, which is paid to the sick and disabled, who are on the Work Programme have not been found jobs.

Margaret Hodge, the PAC's chairman, said: “Evidence shows differential payments have not stopped contractors from focusing on easier-to-help individuals and parking harder-to-help claimants, often those with a range of disabilities including mental health challenges.

Chair of PAC, Margaret Hodge (Getty Images)

“Data from Work Programme providers shows that they are, on average, spending less than half what they originally promised on these harder to help groups.

“It is a scandal that some of those in greatest need of support are not getting the help they need to get them back to work and are instead being parked by providers because their case is deemed just too hard.

“The Department must do more to encourage providers to work with harder-to-help groups.”

Mrs Hodge also warned that the DWP’s sanctions regime could cause “significant financial hardship” to individuals.

“Feedback from some constituents suggests the number of sanctions has been increasing, and some providers have been recommending sanctions more than others,” she said.

A DWP spokesman said: “As this report says, the Work Programme is helping more people than any previous employment programme, with over 330,000 people moving into lasting work and finally gaining the economic security that comes with a regular pay packet.