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WORKSTEP is part of a broad range of schemes funded by the Department for Work and Pensions (DWP), which aims to help disabled people find and retain work. These programmes are managed by Jobcentre Plus, an executive agency of DWP, and provided by a range of organisations in the public, private and not-for-profit sector. WORKSTEP was introduced in April 2001, and incorporated a number of key changes to its predecessor, the Supported Employment Programme, all of which aimed to modernise service provision. The changes embodied in the WORKSTEP programme were a significant challenge for existing service providers and in recognition of this, the Government announced an allocation of UKP 37.2 million in Programme Modernisation Funding, available over a period of three years. The overall aim of the Funds was to both stimulate and enable change to occur within existing provider organisations, making them better placed to deliver WORKSTEP. This report presents the findings of research on WORKSTEP Modernisation Funds, aiming to evaluate the delivery of the funding and the nature and impact of activities and investments arising from it. The research was carried out by the Centre for Public Policy during 2005, and it linked into their evaluation of the WORKSTEP Programme. It involved interviews with Jobcentre Plus and provider organisation staff and an analysis of Modernisation Project documentation. The research examined the background to the Modernisation Funds initiative, the promotion and administration of the Funds, and reviewed the range of initiatives that were supported.