So finally the media is waking up to the reality of the government’s new welfare
to work scheme. The Single Work Programme (SWP), it turns out, is a top-down contractual model dreamed up in Whitehall and imposed with no consultation with any of the people who will be providing
or receiving the services.
It is designed to replace the plethora of little-understood New Labour work creation schemes and aims to simplify the process. Payment by results means that the companies who have won the contracts
will only be paid once they have proved they can find people sustainable jobs.
Patrick Butler’s Cuts Blog in the Guardian has a brilliant dissection of the SWP and asks whether the Big Society is getting its
fair share of the work from the new contracts.
The answer is that the contracts were designed in such a way that only a small number of large service companies were ever in the running. Payment by results means that anyone wishing to become a
“prime provider” has to have the cash flow flexibility to bankroll the government for a number of years until they can prove they have put enough people into jobs. Only very few
companies can afford to do this.
Sceptics in the third sector have already pointed out that the previous system of government contracting where charities and not-for-profit organisations would apply direct to the Department of
Work and Pensions has been replaced by a system where they have to apply to a dozen or so private companies, who may or may not win the contracts themselves. A single monolithic bureaucracy has
been replaced by a multitude of smaller ones. The workload for charities hoping to help put people back to work has therefore multiplied just when they can least afford it.
The DWP could have saved a lot of time and bother if they had come clean and admitted that only Serco, G4S, a4E and other giant service companies were ever likely to win these contracts instead of
pretending that this had anything to do with devolving power from the centre.
My organisation, New Deal of the Mind, will be working with the new system. Like everybody else in the sector, we recognise it is the only game in town. We also recognise that the lion’s
share of any money from the new contracts will go to the private sector (why otherwise would they get involved?). We hope, like many other charities, to pick up some crumbs from the table.
My hope is that these huge service companies will prove more flexible and imaginative than the DWP and the Jobcentre Plus. My initial conversations with them suggest this may well be the case. But
the coalition has to stop pretending this reform is driven by a desire to encourage third sector involvement in public sector provision. In reality, it makes it more difficult for small charities
to get involved and consolidates the work in the hands of a small number of profit-making specialist providers.
Much has been made of the large sums companies stand to make from getting the hardest cases back to work (£14,000 for those on incapacity benefit). As it happens, I don’t have a problem
with this. If it gets long-term benefits claimant into jobs, this will be money well-spent. But there are huge holes in the new system. Young people, for instance, are barely catered for, with
financial incentives so small that it will hardly be worth the effort for the “primes”. The economic modelling may suggest that young people are relatively easy to get back into work.
But it certainly doesn’t feel like that in Middle England, where school and university leavers and their parents are quietly panicking about the situation.
Electorally, the Single Work Programme will be judged at least as much by what it delivers for young people as how successfully it tackles the problem of long-term benefit dependency.
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