Public servants accused the government of "siphoning off" £5 billion in taxpayers' cash to privateers operating its much-vaunted work programme.
Unions said the programme is proving far better at handing public money to the Tories' friends in the private sector than at finding jobs for Britain's millions of unemployed.
The government have claimed the much-criticised programme was "significantly improving."
The Department for Work and Pensions said another 37,000 of Britain's 2.5 million unemployed people had been helped into long-term work between April and June this year.
But the TUC said government figures reveal that only one in 25 jobless people have found work through the scheme and that many of those would have found jobs themselves anyway.
Civil Service union PCS slammed the programme as "worse than doing nothing" and "a catastrophic failure."
The union said 56 per cent of jobseekers had failed to find sustained work after two years on the programme and had "returned" to jobcentres according to DWP figures.
"Last November Employment Minister Mark Hoban said providers that didn't improve 'by next April' would be stripped of their contracts," PCS said.
"The DWP estimated that in year two of the scheme, 30 per cent of eligible 18-24 year olds would find sustained employment without any help, but just 17 per cent have on the work programme despite employers being offered a £2,275 incentive to employ a young person."
PCS general secretary Mark Serwotka added: "This multibillion-pound gamble has succeeded in doing one thing only: siphoning money to private providers.
"It has monumentally failed to provide jobs for the long-term unemployed.
"The work programme should be scrapped immediately and the work to provide support for people who are looking for work should be brought back in-house to job centres where proven expertise exists."
TUC general secretary Frances O'Grady said: "Despite the official spin, the work programme is still failing to deliver for many jobseekers.
"The best way to get to grips with our unemployment crisis would be to offer a jobs guarantee for anyone out of work for at least a year."