03 August 2007
Business leaders this week urged the government not to back away from the privatisation of jobseeker services, after the welfare reform minister told Public Finance that plans for regional contracting had divided her department.
Caroline Flint said that she and Work and Pensions Secretary Peter Hain had 'concerns' about the privatisation plan for jobseeker services proposed by David Freud's review in March.
Freud recommended creating a multibillion pound jobseekers' market, using 11 regional 'mega-contractors' to co-ordinate specialist support for the long-term unemployed.
John Hutton, Hain's predecessor, welcomed the proposals but moved departments before publishing his formal response.
However, Flint told PF that Jim Murphy, Hutton's welfare reform minister, had also questioned the plan to give large firms long-term contracts dealing with vulnerable jobseekers, such as lone parents and those with mental health problems.
'Both myself and Peter Hain have some concerns about that and I think that my predecessor, Jim Murphy, also had some,' Flint said.
'Is it [Freud's model] so big that it becomes unwieldy? What if things go wrong — how do we make sure we're getting the results that we want? If we're not getting the results that we want, how do you change over if you've only got one big contractor?'
Neil Bentley, the CBI's director of public services, called on the government to clarify its position or face nervousness among the contractors capable of co-ordinating vital welfare services.
'We're urging ministers not to scale back on these proposals,' he said.
He added that companies were already successfully delivering welfare services, such as through the New Deal programmes.
PFaug2007
