MPs slam flagship New Deal scheme_2

12 Mar 09
The work and pensions select committee joined the chorus of concern about the government’s flagship Flexible New Deal programme as unemployment figures continue to grow

13 March 2009

By Alex Klaushofer

The work and pensions select committee joined the chorus of concern about the government’s flagship Flexible New Deal programme as unemployment figures continue to grow.

The committee’s report, published on March 5, said that increased funding for the employment programmes, due to start in the autumn, is urgently needed if they are to be effective.

With the latest figures showing unemployment at 1.97 million, the numbers of claimants are expected to be up to 300% higher than when the FND programme was designed.

Last month it emerged that the government is renegotiating the amount it will pay FND contractors upfront as it becomes increasingly hard to get people back into work.

‘Unless the budget for the FND is increased, there is real danger that providers will not be able to cope with the numbers of customers coming through the doors,’ said committee chair Terry Rooney.

‘The potential consequences of this for those customers who are most in need of expert support, and for their prospects of rejoining the labour market, should give the DWP real cause for concern,’ he added.

Dan Finn, professor of social inclusion at Portsmouth University, one of the special advisers to the committee, said he agreed broadly with the report’s findings. ‘The model will struggle to work unless you address those kinds of concerns,’ he told Public Finance.

Finn said the government needed to introduce measures — such as a customer charter outlining jobseekers’ entitlements to service and differential pricing to encourage providers to place harder-to-help candidates in work — particularly for the second wave of FND contracts due to start in the next 18 months.

Rob Allen, policy adviser on welfare to work for the CBI, said the business organisation remained committed to the principles and objectives of the FND. ‘At a time of rapidly rising unemployment, the goals of the FND — personalised support for the hardest to help — are more necessary than ever,’ he said.

But he added that the timescales to get the programme up and running were now very short, given that the government has yet to announce the preferred bidders in the wake of renegotiations.

‘Even for established providers, some of the logistical details of preparing for an October start date are very difficult,’ he said. ‘I think the key thing is dialogue between government and providers in time for October.’

A DWP spokeswoman said: ‘We are working with the bidders for the FND to ensure that their proposals are robust enough to meet the demands of changing economic conditions, and to bring in the new contracts just as quickly as we can.’

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