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Private firms to find people work 12,000 jobs cut in Whitehall dept
(about 4 hours later)
Private firms and voluntary groups are to be offered cash incentives to get unemployed people into work for longer. Some 12,000 jobs are to be lost at the Department for Work and Pensions (DWP) over the next three years.
Work Secretary James Purnell said the plan, which will see more payments if someone is in work for six months, was intended to "personalise" services. Spending restrictions have been blamed for the move, which a union said would mean the loss of 200 offices, including job centres, in England and Wales.
It came as MPs said 40% of jobseekers allowance claimants who find a job are out of work again within six months. The announcement came just hours after the government outlined "radical" changes to the benefits system.
The Tories called it "tinkering" and said Mr Purnell was trying to "steal Conservative language" on welfare. It wants private firms and voluntary groups to be offered cash incentives to get the jobless into work for longer.
The figures on unemployed people not staying in new jobs came in a report from the Commons public accounts committee. Work Secretary James Purnell said these plans, which will see more payments if someone is employed for six months, were intended to "personalise" services.
Freud review But the Tories called the idea it "tinkering" and accused Mr Purnell of trying to "steal Conservative language" on welfare.
It also criticised the fact the government had considered 13 weeks in a job to be "sustained" employment, saying it was too short. 'Yet another blow'
The report said: "Despite high employment levels many people cycle between work and benefits." Referring to the job losses at the DWP, a spokesman said the department "has already reduced its staffing by 30,000 over the past three years without any significant compulsory redundancies".
Instead of following the diktat of Whitehall, providers will focus on the needs of the person in front of them James PurnellInstead of following the diktat of Whitehall, providers will focus on the needs of the person in front of them James Purnell
Mr Purnell announced a "commissioning strategy" at a conference in London, which will see more private companies and voluntary groups involved in finding work for people on benefits. "We are confident that, in the great majority of cases, the further reductions announced today will not mean anyone leaving the department who wants to stay," he added.
It acts on recommendations from an earlier review by investment banker David Freud. Savings of 5% must be delivered in each of the next three years to reduce DWP expenditure by more than £1.2 billion.
But Mark Serwotka, the general secretary of the Public and Commercial Services Union, said the proposed job cuts were "purely about crude cost-cutting" and would "do nothing to improve service delivery to some of the most disadvantaged in society".
The announcement was "yet another blow to a workforce who have battled to provide a service in the face of swingeing cuts and below-inflation pay increases", he added.
Freud review
It came after Mr Purnell announced a "commissioning strategy" at a conference in London, which will see more private companies and voluntary groups involved in finding work for people on benefits.
This acts on recommendations from an earlier review by investment banker David Freud.
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.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.
Paid by results
In return, they will get larger contracts which last up to seven years - the current average is three years.In return, they will get larger contracts which last up to seven years - the current average is three years.
Mr Purnell said the new system would be a more personalised one, designed around each individual's needs and would be aimed at people who have been unemployed or on incapacity benefit for a long time.
Asked if he was happy for people to get rich helping the unemployed, Purnell said yes BBC political editor Nick Robinson Read Nick's thoughts in full Asked if he was happy for people to get rich helping the unemployed, Purnell said yes BBC political editor Nick Robinson Read Nick's thoughts in full
Mr Purnell said the new system would be a more personalised one, designed around each individual's needs and would be aimed at people who have been unemployed or on incapacity benefit for a long time.
"Instead of following the diktat of Whitehall, providers will focus on the needs of the person in front of them," he said."Instead of following the diktat of Whitehall, providers will focus on the needs of the person in front of them," he said.
"Instead of receiving grants for service they will be paid by results and instead of telling providers how to do their jobs we will hold them accountable for what they do.""Instead of receiving grants for service they will be paid by results and instead of telling providers how to do their jobs we will hold them accountable for what they do."
Some 40% of claimants of the jobseekers allowance who find a job are out of work again within six months, according to a report by the Commons public accounts committee.
But shadow work and pensions secretary Chris Grayling said the government was trying to "steal Conservative language on welfare reform".But shadow work and pensions secretary Chris Grayling said the government was trying to "steal Conservative language on welfare reform".
'Waste of talent''Waste of talent'
"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."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.""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."
Mr Freud says most claimants should be looking for work Mr Freud says most claimants should be looking for workAnd Labour's former welfare minister Frank Field welcomed some of the package but told the BBC the potential to expand the role of job centres, which he said had more local knowledge and expertise, had been overlooked.
And Labour's former welfare minister Frank Field welcomed some of the package but told the BBC the potential to expand the role of job centres, which he said had more local knowledge and expertise, had been overlooked.
"One of the reforms I wanted was actually for each of these local offices, if they wished to be, to opt as cooperative companies that would have their own budgets," he said."One of the reforms I wanted was actually for each of these local offices, if they wished to be, to opt as cooperative companies that would have their own budgets," he said.
Job cuts For the Liberal Democrats, Danny Alexander expressed concerned the government was giving a licence to "bring in big multinationals from overseas".
For the Liberal Democrats Danny Alexander told BBC News he was concerned the government were giving a licence to "bring in big multinationals from overseas".
He said: "I would like to see many of those local voluntary and private organisations who are making a real success of getting people back into work given much more scope to expand, to work locally, rather than being potentially pushed aside by big foreign providers."He said: "I would like to see many of those local voluntary and private organisations who are making a real success of getting people back into work given much more scope to expand, to work locally, rather than being potentially pushed aside by big foreign providers."
Meanwhile the Department for Work and Pensions has announced 12,000 job cuts over the next three years - due to spending restrictions. It has already cut 30,000 posts since 2005. This was the latest of a series of government announcements on welfare reform. Others have included making all long-term unemployed people do at least four weeks' work and making single parents look for work once their youngest child is seven by October 2010.
The Public and Commercial Services Union said it would mean 200 offices, including job centres, would close in England and Wales.
Its general secretary Mark Serwotka said: "These plans for job cuts and privatisation are purely about crude cost cutting and will do nothing to improve service delivery to some of the most disadvantaged in society."
It is the latest of a series of government announcements on welfare reform. Others include making all long-term unemployed people do at least four weeks' work and making single parents look for work once their youngest child is seven by October 2010.
The Conservatives' proposals include assessing all incapacity benefit claimants to see whether they are really unfit for work and making the long-term unemployed do community work.The Conservatives' proposals include assessing all incapacity benefit claimants to see whether they are really unfit for work and making the long-term unemployed do community work.
The Lib Dems say they would try to halve the number of incapacity benefit claimants by 2020 by introducing a single "working age benefit", with extra help for those with mental health problems and a simplified benefits system.
The Lib Dems say they would try to halve the number of incapacity benefit claimants by 2020 by introducing a single "working age benefit", with extra help for those with mental health problems and a simplified benefits system.
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