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Private firms to find people work Private firms to find people work
(about 5 hours later)
More private firms are to be given contracts to help find jobs for people on benefits, the Work and Pensions Secretary is expected to announce. The government is to pay private firms and voluntary groups up to £50,000 to get unemployed people into work.
Private and voluntary groups are expected to be offered cash incentives to get people into work. The plans will involve about 250,000 long-term unemployed people and all new claimants for sickness benefits.
James Purnell will tell a conference he wants to free benefit services from central control and allow them to generate "innovative solutions". Work and Pensions Secretary James Purnell said a "radical blueprint" was needed to get one million people off incapacity benefit.
It follows a review by investment banker David Freud. He denied Britain had a "culture of dependency". The Tories said the plans did not go far enough.
Mr Purnell will unveil plans later for a "commissioning strategy", that will see more private companies and voluntary groups involved in finding work for people on benefits - following a review by investment banker David Freud.
He will tell a conference he wants to free benefit services from central control and allow them to generate "innovative solutions".
'Innovative solutions''Innovative solutions'
Among the suggestions in the review carried out by Mr Freud almost a year ago was that of the 2.7 million people claiming incapacity benefit, only 700,000 need it.Among the suggestions in the review carried out by Mr Freud almost a year ago was that of the 2.7 million people claiming incapacity benefit, only 700,000 need it.
Lone parents are also expected to face tougher requirements to find jobs or lose benefits.Lone parents are also expected to face tougher requirements to find jobs or lose benefits.
I want to see solutions which focus on every single individual, not just the ones who are motivated to work James Purnell Gordon Brown is tinkering around the edges - a bit of reform here, a bit of participation by the private sector, a slight toughening of sanctions Chris GraylingConservatives
Unveiling his "commissioning strategy" Mr Purnell will tell the conference in London that contractors would be rewarded on results. New contractors are expected to be offered incentives for getting people into work for at least six months, with further incentives planned in the future for increasing it to 18 months.
They are expected to be offered incentives for getting people into work for at least six months, with further incentives planned in the future for increasing it to 18 months.
In return, they will get larger contracts which last up to seven years - twice as long as usual.In return, they will get larger contracts which last up to seven years - twice as long as usual.
'Competition' potential Mr Purnell said there was a "big challenge" adding: "We have got really radical goals, getting one million off incapacity benefit, we need a radical blueprint to achieve it."
Mr Purnell will say: "The private and voluntary sector already plays a role in delivering our work programmes. I want to take this to the next level, free them from central control and allow them to innovate. 'Economically rational'
"Their involvement is here to stay and set to grow." He told BBC 2's Newsnight: "We've had a big improvement in terms of getting the unemployment level down; now we need to get the inactivity level down."
He will add: "I want to see solutions which focus on every single individual, not just the ones who are motivated to work." He said getting to an 80% employment rate would be "incredibly high" compared with the rest of the world. "We've had three million new jobs under this government. That is not a culture of dependency, that's a real success in terms of full employment."
Mr Freud says most claimants should be looking for workMr Freud says most claimants should be looking for work
Mr Freud is expected to tell the conference the new strategy "also has the potential to open up a whole new type of competition in the market place, offering openness and transparency".
Incapacity benefit costs the Treasury about £12bn a year. But the Department for Work and Pensions said recently the number of claimants was at its lowest since 2000.Incapacity benefit costs the Treasury about £12bn a year. But the Department for Work and Pensions said recently the number of claimants was at its lowest since 2000.
Mr Freud has previously said it would be "economically rational" to pay as much as £62,000 to a company which managed to place an incapacity benefit claimant in a job which lasted three years or more.Mr Freud has previously said it would be "economically rational" to pay as much as £62,000 to a company which managed to place an incapacity benefit claimant in a job which lasted three years or more.
The Tories say they could cut incapacity benefit numbers by 200,000 by making all claimants undergo reassessment by doctors. If passed fit for work, they would then be placed on Jobseekers' Allowance, a benefit cut of £20 a week.The Tories say they could cut incapacity benefit numbers by 200,000 by making all claimants undergo reassessment by doctors. If passed fit for work, they would then be placed on Jobseekers' Allowance, a benefit cut of £20 a week.
In addition, jobless people who refuses a "reasonable" offer of employment would lose one month's benefit for the first job offer, three months for the second, and up to three years for the third in a "three strikes and you're out" policy. Of the government's latest plans, shadow work and pensions secretary Chris Grayling said the government was trying to "steal Conservative language on welfare reform".
"We've set out very clear and very detailed plans for welfare reform based on the experience in other countries, a very full package," he said.
"Gordon Brown is tinkering around the edges - a bit of reform here, a bit of participation by the private sector, a slight toughening of sanctions. Nothing like the scale of radical change we would need."
The Liberal Democrats have previously welcomed the use of the voluntary and private sector to help more people back into employment, but said it must be "properly financed, and include provisions to help those with serious problems such as low skills or mental health problems".The Liberal Democrats have previously welcomed the use of the voluntary and private sector to help more people back into employment, but said it must be "properly financed, and include provisions to help those with serious problems such as low skills or mental health problems".
But unions have raised concerns that contracting out services will lead to job cuts and "lower standards and the exploitation of claimants".But unions have raised concerns that contracting out services will lead to job cuts and "lower standards and the exploitation of claimants".