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Welfare Reform on the Web (May 2008): Social security - UK - New Deal

Contracting out employment services to the third and private sectors: a critique

S. Davies

Critical Social Policy, vol. 28, 2008, p. 136-164

As part of its welfare reform strategy, the New Labour government has made increasing use of the private and third sectors in the provision of employment services. Ministers claim that this results in better services for users and better value for money for taxpayers. This article challenges these claims of third and private sector superiority in service provision using the government's own evaluation reports. It demonstrates that whenever JobCentre Plus staff have been given the same flexibilities and funding as private companies or charities, they have been able to match, if not surpass, the performance of contractors

Finding a pathway back into work

A. Christie and M.J. Marshall

Mental Health Today, Apr. 2008, p. 25-27

Pathways to Work was launched in 2003 to support people claiming health-related benefits in returning to work. One of the options offered by Pathways to Work is the Condition Management Programme (CMP), which is run jointly by Jobcentre Plus and local NHS providers. CMP adopts a bio-psychosocial approach to tackling the barriers that prevent claimants from leaving benefits and returning to employment. This study explores the client experience based on a convenience sample of people involved with the Renfrewshire, Inverclyde, Argyll and Bute CMP.

How do minority ethnic groups fare in New Deals?

L. Forsythe

Working Brief, Mar. 2008, p. 6-7

Analysis of Department for Work and Pensions (DWP) monitoring data shows that there are almost as many Jobcentre Plus districts where minority ethnic leavers outperform their white counterparts as there are districts where the reverse is true. However, most of the Jobcentre Plus districts where minority ethnic New Deal leavers do better are those where minority ethnic leavers make up only a small percentage of leavers overall. Districts with a high proportion of minority ethnic leavers show a disparity in terms of job outcome. Analysis of the New Deal returns presents a more positive picture, in that:

  • Minority ethnic New Deal for Young People customers return to New Deal less frequently than their white colleagues.
  • Returns to New Deal 25 Plus by minority ethnic customers are also less than those seen among their white counterparts, even in districts with high proportions of minority ethnic customers
  • However, minority ethnc customers of the New Deal for Lone Parents have more returns to the programme than their white counterparts

Paying for success: how to make contracting out work in employment services

P. Lilley and O.M. Hartwich (editors)

Policy Exchange, 2008

Report finds that government plans to privatise the welfare system by paying companies to find jobs for the unemployed are fraught with difficulties and open to abuse. It highlights a history of unscrupulous behaviour by private contractors delivering employment services in the USA and elsewhere. Companies played the 'payment by results' system to maximise profits rather than further the interests of unemployed people. Three problems are identified:

  1. unscrupulous companies would take on clients who would have found work under their own steam
  2. they would 'park' difficult clients who needed the most help and support
  3. they would place clients in insecure temporary jobs rather than making the effort to secure a permanent position.
Nevertheless, the report concludes that, if carefully introduced, contracting out employment services could save the British taxpayer 1bn a year.

Tough New York welfare scheme for UK

N. Watt

The Guardian, Apr. 17th 2008, p. 6

Following a meeting with New York's mayor Michael Bloomberg, Gordon Brown is set to adopt a new American style welfare programme in the UK. Opportunity NYC, which will be renamed Contracts out of Poverty in Britain, is based on targets and incentives and links welfare payments to performance by low paid workers.

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