The success of the government’s new Work Programme for the unemployed is at “pretty substantial risk” unless more is done to stop staff leaving the welfare-to-work sector, according to a director of a firm that provides staff to welfare-to-work providers.

The government’s Work Programme was launched in June to help the long-term unemployed back to work, bringing in a new payment by results regime. As a result of the shake-up only 20% of the contracts are being delivered by the same suppliers.

According to Kirsty McHugh, chief executive of the Employment Related Services Association (ERSA), a trade body for organisations in the welfare-to-work sector, around 10,000 people, or a third of the industry, are either being transferred to new providers or facing redundancy. “People have been evaporating from the industry,” McHugh told Recruiter.

McHugh said a lower than anticipated number of transfers to new providers under TUPE (transfer of undertakings legislation) suggested that many had left the sector, though it was difficult to get an accurate figure. McHugh said that those leaving were looking for a more stable working environment. “It is a crying shame,” she added.

According to Anton Roe, a director of Alderwood Welfare to Work, a company that provides staff to the welfare-to-work providers, the success of the programme could be at “pretty substantial” risk if churn in the industry worsens.

Roe said the programme’s success depends on the unemployed building good relationships with their back-to-work advisers, but that this was much more difficult if those advisers keep being replaced by new ones.

According to research by Alderwood, 57% of those made redundant during the transition to the new Work Programme have been put off ever working in the industry again. The sector also faces a loss of experienced staff, with 52% of those facing redundancy having worked in the sector for more than five years, according to the research.

Roe told Recruiter that other concerns such as a dislike of the new payment by results regime could lead to increased numbers of “disengaged” and “cheesed off” staff leaving the sector.

Roe said one option was to widen the talent pool by bringing in people from outside the industry, for example those being made redundant from the Armed Forces. The image of the sector also needed to improve, he added.

McHugh said that at present she didn’t believe that staff leaving the sector threatened the success of the Work Programme. However, it would become more of an issue if unemployment continued to rise, and more staff were required, she added. Last week UK unemployment hit 2.57m, a 17-year high.