The figures revealed out of the 1.2 million long term unemployed referred to the Work Programme by the end of March 2013, only 321,000 people had started a job.
The statistics from the ERSA, the trade body for the welfare to work industry, also revealed bad results for disabled and long-term sick adults who have been receiving employment and support allowance (ESA) - only 10% of this group has found work.
Shadow work secretary Liam Byrne said the "alarming figures now show something is very seriously wrong with the Work programme".
'Two years since it was launched and nearly 900,000 people on the programme haven't even started a job.
"It's now crystal clear the system is failing and the Government isn't fixing it," Byrne said.
He added: "This simply isn't the serious long term reform of social security we need.
"We cannot go on like this, a million young people are out of work, unemployment is higher than at the last general election and the benefits bill £20 billion higher than planned.
However, the figures showed the Work Programme is proving particularly effective in tackling youth unemployment, with 88,000 young people on Jobseekers Allowance by the end of March 2013.
For those who had been on the scheme for at least a year, just under half (45%) had found work, while 49% of those who had been on the programme the longest had entered work.
A spokesman for the Department for Work and Pensions insisted the programme "was working".
"It is helping large numbers of people escape long-term unemployment and find a job," the spokesman said.
Kirsty McHugh, chief executive of ERSA said: "These figures are a clear illustration that the Work Programme is performing for the long term unemployed.
"Put simply, the longer jobseekers are on the programme, the more likely they are to find a job. Results for young people are particularly encouraging, with nearly half of those on the Work Programme for at least a year entering work."
