16 March 2007
Potential long-term benefit claimants could be transferred to the private and voluntary sectors after just 14 weeks under government plans to create a multibillion pound 'welfare-to-work' market from 2008.
Public Finance understands that Work and Pensions Secretary John Hutton is considering a far quicker transfer of jobseekers and incapacity benefit claimants than that suggested by former investment banker David Freud's review of welfare programmes, published last week.
Freud's March 5 report, Reducing dependency, increasing opportunity, suggested transferring responsibility for long-term benefit claimants as part of Hutton's plan to achieve an 80% employment target and reduce poverty among welfare recipients.
Freud's idea is that private and voluntary providers could receive multiyear state funding to design and provide individualised skills and jobseeking programmes for claimants that the state's Jobcentre Plus service has traditionally failed. He suggested transferring individuals after they have claimed benefits for one year.
However Hutton, who was speaking to the Centre for Economic and Social Inclusion on March 13, said that he envisaged a more flexible system whereby claimants who are deemed in urgent need of tailored support could be transferred out of the state system sooner.
'There's been a misunderstanding about this initial 12-month period. What Freud didn't say was that it is a rigid 12-month period over which Jobcentre Plus “own” those claimants.
'We need to be clearer about the characteristics of the [hardest to help] claimants, screen them in better ways. It may well be that… some could go into an immediate programme of specialist help and targeted support.'
Hutton later clarified his idea and stated that a transfer could take place after a claimant's standard three-month assessment.
However, Chris Pond, the chief executive of lobby group One Parent Families, said he was concerned that voluntary bodies, for example, lacked the capacity to deliver specialist support so quickly.
Hutton said he would publish his formal response to Freud's study this summer, and added that the Department for Work and Pensions could pilot the devolved private and voluntary sector system from early 2008.
Standard benefits, such as Jobseekers Allowance and incapacity benefit support four million claimants at a cost of more than £30bn annually.
Freud believes that opening up specialist support would create a 'multibillion-pound market' for welfare, but save the government cash in the longer term, as more claimants move into work.
PFmar2007
