Dozen big contractors could take welfare role

A dozen large private sector "prime contractors" will take over responsibility for getting the long-term unemployed from 'welfare-to-work'.

Andrew Taylor, Ben Hall and Nicholas Timmins write that a "multibillion-pound" welfare industry could be created by an overhaul to the system which was announced on Monday.

David Freud's main proposal is the reconfiguration of welfare-to-work programmes for people on benefits for more than a year.  His independent report was commissioned by the Department for Work and Pensions.

Employment service and training providers, outsourcing companies and technology groups will be expected to bid for the job of re-skilling, mentoring, and placing up to 1.3m long-term claimants into sustainable jobs.

The proposals were criticised by unions concerned that the jobs of public sector workers could be cut and by some charities which fear that benefit sanctions could hit the most disadvantaged.

Concern that companies will 'cream off' the easiest cases have led them to a scheme whereby every new benefit claimant's ability to work will be assessed to ensure that first the hardest to help, then the long-term unemployed, are handed over to employment and retraining agencies and not-for-profit groups.