23 February 2007
The man reviewing the UK's 'welfare to work' system will suggest a substantial transfer of responsibilities for long-term unemployed benefit recipients from the state to the private and voluntary sectors.
David Freud, who will report back to Work and Pensions Secretary John Hutton within weeks, is set to recommend the extensive use of personal work advisers within and outside the state system.
Freud, chief executive of the Portland Group think-tank, told a conference in London this week: 'The idea that I'm pursuing is that the personal adviser is incentivised not just to get somebody into a job, but to get them into work and keep them there, and I've used the period of three years for that.'
Freud also told Public Finance that he supported a single working age benefit. But he warned that he is likely to recommend further research on a step that could initiate radical welfare payment reforms.
What is clear, however, is an emerging consensus amongst ministers and their advisers over the break-up of the welfare system, so that groups who are able to work but have been traditionally blocked from employment – such as those with disabilities or mental health problems – can access work through specialist support.
'The main direction of the report is moving towards…a much more homogenous [state] system within which there is much greater individualisation,' Freud said.
'The system that we have now, using Jobcentre Plus, is effective for most people. But a large number get stuck in the system on active or inactive benefit payments, and that's where the concentration of the review is going to be.'
He talked of 'contracting out' the 'harder-to-help' from the core state system and introducing 'payment by results' for specialist providers to ensure that they endow claimants with long-term skills.
However, Freud added that ministers would 'abandon at one's peril' the current requirement that welfare claimants should actively seek work in return for benefits.
Dr Paul Gregg of the University of Bristol, a former welfare adviser to Chancellor Gordon Brown, said that the system Freud appears to favour must also be accompanied by 'parallel plans to advance individual skills' once a person is in work – or the government risked 'churning' former claimants back into the benefit system.
The Commons' work and pensions select committee, meanwhile, suggested strict targets for Jobcentre Plus and future contractors, which should 'recognise the importance of sustainable employment lasting 26 weeks or more.'
The MPs' report, published on February 21, criticised a lack of clarity over the government's ambitious 80% employment target, which underpins the welfare-to-work programme.
'The DWP should set out who it thinks should be expected to be outside the labour market, and how many people it estimates fall into these categories. It should then use the percentage of working-age people remaining as the basis of its employment aspiration,' the report states.
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