By Alex Klaushofer
The architect of the welfare to work programme has said that the government’s Flexible New Deal needs some serious rethinking in the light of the recession.
Sir David Freud was speaking at the CBI’s public services summit on June 16. His March 2007 review formed the basis of the FND proposals now being implemented by the Department for Work and Pensions.
‘I think there are going to have to be some quite clever adjustments to the Flexible New Deal process,’ he said. ‘The scale and nature of the FND has completely been transformed by the economic crisis that we are facing.’
He added that the programme had originally been designed to deal with around a quarter of a million long-term unemployed people.
‘Now it’s going to become mainstream provision for many people who are cyclically unemployed rather than chronically unemployed,’ he said.
His comments came as figures released on June 17 showed unemployment had reached a 12-year high of 2.26 million – 7.2% of the workforce – in May, 39,000 up on the previous month.
Freud, who defected to the Conservatives in February this year, is now the shadow minister for welfare reform.
He added: ‘An incoming government will need to make sure that the programmes essentially designed to help the structurally unemployed are addressed to those who are cyclically unemployed, and the two need to mesh pretty seriously.’
Progress on the FND programme has been hampered as the government was forced to renegotiate the contract terms. This was to accommodate welfare-to-work providers’ insistence that the increased difficulty of getting people back to work meant that more payment was needed upfront.
The preferred bidders were announced last month, but concerns from welfare experts remain that the FND model could cause providers to under-perform or even collapse.
Freud said that it was likely that the current economic conditions would tempt providers to ignore recently unemployed people.
‘My main concern about them is if you are looking at cyclical recovery… your incentive to do anything at all with the first year’s cohort is pretty limited,’ he said.
‘I think where I would concentrate a lot of thought and effort is how do we make sure that the people who first go into FND are not treated as second-class citizens as the FND providers concentrate their efforts on a second set,’ he added.
Freud’s comments came on the day that Work and Pensions Secretary Yvette Cooper reaffirmed plans to announce the preferred bidders for a second round of welfare-to-work contracts in the spring of 2010, weeks before a possible general election.
The architect of the welfare to work programme has said that the government’s Flexible New Deal needs some serious rethinking in the light of the recession.
Sir David Freud was speaking at the CBI’s public services summit on June 16. His March 2007 review formed the basis of the FND proposals now being implemented by the Department for Work and Pensions.
‘I think there are going to have to be some quite clever adjustments to the Flexible New Deal process,’ he said. ‘The scale and nature of the FND has completely been transformed by the economic crisis that we are facing.’
He added that the programme had originally been designed to deal with around a quarter of a million long-term unemployed people.
‘Now it’s going to become mainstream provision for many people who are cyclically unemployed rather than chronically unemployed,’ he said.
His comments came as figures released on June 17 showed unemployment had reached a 12-year high of 2.26 million – 7.2% of the workforce – in May, 39,000 up on the previous month.
Freud, who defected to the Conservatives in February this year, is now the shadow minister for welfare reform.
He added: ‘An incoming government will need to make sure that the programmes essentially designed to help the structurally unemployed are addressed to those who are cyclically unemployed, and the two need to mesh pretty seriously.’
Progress on the FND programme has been hampered as the government was forced to renegotiate the contract terms. This was to accommodate welfare-to-work providers’ insistence that the increased difficulty of getting people back to work meant that more payment was needed upfront.
The preferred bidders were announced last month, but concerns from welfare experts remain that the FND model could cause providers to under-perform or even collapse.
Freud said that it was likely that the current economic conditions would tempt providers to ignore recently unemployed people.
‘My main concern about them is if you are looking at cyclical recovery… your incentive to do anything at all with the first year’s cohort is pretty limited,’ he said.
‘I think where I would concentrate a lot of thought and effort is how do we make sure that the people who first go into FND are not treated as second-class citizens as the FND providers concentrate their efforts on a second set,’ he added.
Freud’s comments came on the day that Work and Pensions Secretary Yvette Cooper reaffirmed plans to announce the preferred bidders for a second round of welfare-to-work contracts in the spring of 2010, weeks before a possible general election.
