The Access to Work (AtW) programme is helping only a minority of the disabled people it could benefit the Work and Pensions Select Committee has warned.
The AtW programme is designed to help disabled people get practical support to stay in employment.
The AtW was found by the report to be operating with only a marginally increased project following the closure of the remploy factories, and it is not clear what happened to the savings from the closures, the committee said.
Information about the AtW was found to fail users with a lack of information in accessible formats and a lack of training for staff in how to serve those with learning disabilities and austistic spectrum disorders.
The recent implementation of a call centre was also criticised as having been poorly implemented and not meeting the needs of users.
The need for the AtW programme to include more help for those with mental health problems and other "hidden impairments" was also highlighted as being key to increasing the programme's effectiveness.
The Department for Work and Pensions which organises AtW was also criticised for the fact it has imposed "the 30 hour rule" for British Sign Language interpreters, creating issues for deaf people who need the service.
The support for those who are self-employed and entrepreneurs was also said to be in need of improvement as the service fails to take into account the realities of their situation.
A lack of transparency in how decisions are made for AtW and poor administration were also criticised, noting the "inefficient and outmoded paper-based processes".
Dame Anne Begg MP, chair of the Work and Pensions Committee, said:" The DWP needs to make a strong case to HM Treasury for substantial additional funding for Access to Work and then take steps to increase take-up by improving the programme's marketing.
"The Government should promote Access to Work much more proactively and widely, to both employers and disabled people, including previously under-served groups such as young people trying to enter the labour market for the first time."
The coronavirus pandemic has highlighted the need for quick and efficient access to medical advice and treatment. COVER investigates the changing environment
Only 57% of employers believe employees understand their benefits, GRiD research reveals
Study by Employee Assistance Professionals Association (EAPA)
Winners revealed on 10 November
An exclusive interactive guide