Firms to help run welfare to work plan

THE government yesterday invited bidders from the private and voluntary sectors to join its new welfare-to-work programme, in a bid to end Britain’s culture of joblessness.

Work and pensions secretary Iain Duncan Smith hopes that outsourcing firms like Serco, Capita and Cap Gemini will bid for the contracts, which will provide big rewards for firms that manage to get people into work and keep them there.

The Department for Work and Pensions has yet to release detail on exactly how the
providers will be paid, but an official told City A.M. that the best-performing companies
could be paid “thousands of pounds” for each individual they successfully place in work.

Providers will be paid according to how many individuals they remove from the claimant count, with higher rewards for those firms that keep people in jobs the longest.

The government is reluctant to stump up cash before it gets results, over fears that firms could simply make profits by going through the motions. To that end, ministers are trying to get private finance together to help providers fund their start up costs.

Jobless people will be stripped of their benefits if they fail to co-operate with the work
programme. Individuals could see their benefits cut for as long as six months, twice as long as is currently the case.

Young people will be signed-up to the scheme after six months of unemployment when it
launches next April, while the over-25s will be enrolled after a year.

Meanwhile, there will be tougher and more regular assessments for those claiming incapacity benefits.