Whitehall focus Unions prepare to fight for jobcentre posts

15 Sep 05
More than 10% of the civil service could be outsourced to private or voluntary organisations under controversial reforms to job seekers' services being considered by the Department for Work and Pensions.

16 September 2005

More than 10% of the civil service could be outsourced to private or voluntary organisations under controversial reforms to job seekers' services being considered by the Department for Work and Pensions.

As many as 60,000 of Whitehall's 560,00 staff – half of the 130,000 employed at the DWP– could be affected by plans to outsource the bulk of jobcentre work, benefit processing, fraud investigation and incapacity benefit administration.

Those proposals are contained in a confidential letter from Jonathan Portes, DWP director of work and welfare strategy, to minister for work Margaret Hodge. The letter, leaked to the Public and Commercial Services union, suggests the government should extend 'contestability' for jobseekers' services.

PCS general secretary Mark Serwotka said the plans would 'create more uncertainty and distrust' among a civil service workforce 'already battered by job cuts' and the relocation of staff nationally.

The PCS has already balloted staff in London on possible strike action following job cuts announced by Chancellor Gordon Brown in 2004.

Serwotka, who represents 300,000 civil servants, said the government's latest plans would put the 'profit of the few ahead of the needs of many' and ran 'contrary to the founding principles of the welfare state'.

But Work and Pensions Secretary David Blunkett responded: 'There is no plan for the wholesale privatisation of Jobcentre Plus, nor will there be.

'From the inception of the New Deal programme, contestability has been a feature included in the operation of employment zones and in particular contracts. There is nothing on the table now that ministers are considering which extends this sensible mix.'

But a senior DWP source told Public Finance that 'the proposals would, if adopted, greatly extend the remit of private and voluntary partners'.

Portes' letter calls for 'feasibility studies' to 'ascertain whether there might be scope for contesting or outsourcing benefit processing centres, fraud investigation services and both jobseeker and employer contact centres.'

On the labour-market side of jobseekers' services, Portes also recommends expanding contestability by setting up private or voluntary sector partners for new Jobcentre Plus activities, including work-focused interviews, elements of the Jobseekers' Allowance intervention regime and services for lone parents.

MPs slam cost and poor targeting of DTI green energy policy

The Department of Trade and Industry has been severely criticised over its scheme to promote renewable energy, which senior MPs say will cost consumers an extra £5bn by 2010.

The criticism, from the Commons' Public Accounts Committee, came as Chancellor Gordon Brown, in his speech to the Trades Union Congress in Brighton, was restating his commitment to alternative energy sources.

Brown called for greater effort to be put in to developing more environmentally friendly alternatives to traditional energy. The call came as renewed protests over petrol costs led to panic buying of fuel by motorists.

In a report published on September 15, the PAC attacked as expensive and poorly targeted the DTI's directive to electricity suppliers to increase the percentage of their sales from renewable sources — the Renewables Obligation.

PAC chair Edward Leigh MP said: 'Consumers are providing a massive subsidy to the renewables industry. But, unlike public expenditure, this subsidy does not receive annual scrutiny by Parliament. This is unacceptable.'

The PAC report notes that the DTI scheme pushes up the demand for renewable energy and subsidises its development, at a likely cost of more than £2bn by 2010. Meanwhile, electricity suppliers pass on the higher cost of buying renewable electricity to consumers.

The MPs say the expense of the scheme reflects the high cost of renewable generation and the 'poor targeting of the scheme — around a third of the funds exceed the support needed by generators'.

Leigh said: 'The government's target is to have 10% of our electricity generated from renewable sources by 2010. But, by then, the Renewables Obligation will be adding £1bn a year to electricity prices and will have cost consumers at least £5bn. The expansion of distribution and transmission capacity required to meet the 10% target will add another £1.5bn — also to be shouldered by consumers.'

The government, he said, must start to target subsidy at technologies that have a genuine prospect of becoming commercially viable. It should also give serious thought as to how it will find 'enough green energy to fill the gap left when the low-carbon energy generated by current nuclear power stations is no longer available'.


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