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Government's welfare to work scheme launched Government's welfare to work scheme launched
(about 2 hours later)
The government's new work scheme has begun, with ministers hoping to get a million people off benefits and into employment over the next two years.The government's new work scheme has begun, with ministers hoping to get a million people off benefits and into employment over the next two years.
Under the scheme, approved providers, mostly private companies, will try to find work for claimants in the UK.Under the scheme, approved providers, mostly private companies, will try to find work for claimants in the UK.
Seven-year contracts have been agreed and are on a payment by results basis. Seven-year contracts have been agreed and are on a payment-by-results basis.
The Work Foundation said there was a danger private contractors will focus on investing in places where they are more likely to get people into work. The Work Foundation said there was a danger private contractors would cherry-pick parts of the country where they were more likely to get results.
BBC home affairs editor Mark Easton said the Work Programme has been described as the centrepiece of the most sweeping welfare reform for 60 years. The scheme replaces existing employment support schemes - the New Deal, Employment Zones and Pathways to Work.
"The government is investing billions in a programme they claim won't cost the taxpayer a penny," he said. BBC home affairs editor Mark Easton said the government was investing billions in the Work Programme, but arguing that ultimately it would save the taxpayer money by getting people off benefits.
"The money is effectively being borrowed from the Treasury's benefits budget in the belief that getting people off welfare and into work will save money in the long run." But he added that the payment-by-results aspect had led some to speculate that suppliers might pressurise vulnerable people into unsuitable jobs or ignore those who need the most support.
He added that the payment by results aspect had led some to speculate that suppliers might pressurise vulnerable people into unsuitable jobs or ignore those who need the most support. 'Dating agency'
'Revolutionary' Outsourcing giants Serco and G4S are two of the private firms involved, while the voluntary sector groups signed up include Mencap, the Citizens Advice Bureau, the Prince's Trust and Action for Blind People.
Seven-year contracts have been agreed to largely private sector companies, including outsourcing giants Serco and G4S. The total value over the contracts is likely to be between £3bn and £5bn. The total value of the contracts awarded is likely to be between £3bn and £5bn.
Voluntary sector groups are also involved in delivering the programme, including Mencap, the Citizens Advice Bureau, the Prince's Trust and Action for Blind People. Employment Minister Chris Grayling said the programme was "probably the biggest payment-by-results scheme in the world" and would offer "specialised, personalised support" for the unemployed.
Ministers said that under the Work Programme, providers would be free to design support, based on the needs of jobseekers and local labour markets. Over 25-year-olds will become eligible when they have been out of work for 12 months and under 25s after nine months. Some younger people in certain circumstances, like young offenders, will be eligible after a shorter period of time.
Employment Minister Chris Grayling said: "The Work Programme will tackle the endemic worklessness that has blighted so many of the country's communities for decades. "They're with the providers for up to two years," Mr Grayling told the BBC.
"It is revolutionary in the way it tailors support to jobseekers' individual needs and pays organisations primarily for getting people into sustained employment." "The best way of describing it is almost like a giant employment dating agency, trying to motivate the long-term unemployed and match them to a job in which they have a good chance of staying.
Mr Grayling said providers will be paid for supporting people into employment and helping them stay there for longer than ever before, with higher payments for supporting the hardest to help. "It's no longer Whitehall that decides how you do it. We say to the providers, 'You decide how best to help people and we'll pay you for doing it.'"
The scheme replaces employment support currently on offer including the New Deals, Employment Zones and Pathways to Work. Mr Grayling said providers would be paid in instalments over a period of up to 27 months, which would give them an incentive not just to get people into work, but also to keep them there.
Andrew Dutton, chief executive of A4E, one of the companies involved, said it would look at removing the barriers that had been keeping people out of work.
"They may be debt issues or housing issues or problems within the family, legal issues around housing, but often very much around supporting them to really gain confidence," he told the BBC.
'Not big enough'
The Work Foundation research group has warned the programme would do little to improve job prospects for people living in economically weaker areas of the UK.The Work Foundation research group has warned the programme would do little to improve job prospects for people living in economically weaker areas of the UK.
Neil Lee, the group's senior economist, said: "As the Work Programme is based on payment by results, contractors carry the initial risk.Neil Lee, the group's senior economist, said: "As the Work Programme is based on payment by results, contractors carry the initial risk.
"There is therefore the danger that private contractors will focus on investing in places where they are more likely to get people into work to secure a return on investment.""There is therefore the danger that private contractors will focus on investing in places where they are more likely to get people into work to secure a return on investment."
Shadow work and pensions secretary Liam Byrne said Labour supported the principles of the Work Programme but it was vital the government revealed how many people the scheme would help. Mr Grayling, however, said the government had seen "intense competition" for the contracts right across the country, not just in economically better-off areas.
Shadow work and pensions secretary Liam Byrne said Labour supported the principles of the Work Programme but was concerned it was not big enough to help all those struggling to find jobs.
He also said an extra tax should be levied on bankers' bonuses to raise money for the scheme.
According to the latest statistics, UK unemployment fell by 36,000 in the three months to the end of March to 2.46 million.According to the latest statistics, UK unemployment fell by 36,000 in the three months to the end of March to 2.46 million.
Are you unemployed? Will you be taking part in the scheme? Send us your comments using the form below.Are you unemployed? Will you be taking part in the scheme? Send us your comments using the form below.