01 February 2008
New Work and Pensions Secretary James Purnell has vowed to press ahead with the radical welfare reforms set out by former investment banker David Freud.
Freud's March 2007 report put forward proposals to contract out jobseeker and training services for long-term unemployed people to private and voluntary sector providers.
Although ministers at first enthusiastically endorsed the Freud report, there was an element of backtracking on some aspects of the proposals once Gordon Brown took over the premiership last summer.
However, the Department for Work and Pensions' interim commissioning strategy, published last November, confirmed that the government wanted the private sector to take on large, long-term employment service contracts.
Purnell this week suggested he aimed to continue this agenda and announced that Freud would be returning to the DWP as an adviser.
'We will follow through on David Freud's groundbreaking report on reforming the welfare system,' he told a conference of employers on January 28.
'That means using the best provider, whether they are from the private, public or voluntary sectors. I want to create an effective and growing market for these services – because we shouldn't be ideological about who provides the service, we should just work out who is best at providing it.'
A CBI spokesman told Public Finance that there was 'relief and pleasure' among business leaders that Purnell had taken over at the DWP.
The new secretary of state's 'nice words' were welcome, he said, but business was still awaiting further detail on how Freud's ideas would work in practice.
Unions, however, continued to protest at what they see as covert privatisation of jobseeking services. Public and Commercial Services union general secretary Mark Serwotka said: 'We have serious doubts about whether there is the capacity in the private and voluntary sector to deliver the government's proposals.
'Rather than resurrecting plans it had previously appeared to discount, the government should look to its own workforce in providing the personalised help that the long-term unemployed need.'
Purnell, together with Brown and John Denham, the innovation, universities and skills secretary, launched Ready to work, skilled for work: unlocking Britain's talent, a report that showed how business and government can work together to deliver a highly skilled workforce and prosperous economy.
An expansion of the apprenticeship programme was also announced. By 2020, the government wants employers of all kinds offering 250,000 apprenticeships each year.
Denham said he wanted apprenticeships to become a 'mainstream option' for young people.
But a review of current apprenticeship provision revealed that the public sector continues to lag behind. It directly employs around 20% of the national workforce, but provides fewer than 10% of apprenticeship places.