The government has signalled its commitment to pay specialist companies to get people from benefits into work with its Welfare Reform Bill White Paper.
The paper, Raising expectations and increasing support: reforming welfare for the future, pledged to expand the use of private and voluntary providers.
The Welfare Reform Bill was included on the legislative agenda for 2009 in last week’s Queen’s Speech.
Today’s White Paper says: “We are confirming that we want to move to the ‘Invest to Save’ approach recommended by David Freud, also known as AME-DEL. This involves private and voluntary providers investing up front in getting more people back into work, and being paid out of the resulting benefit savings.”
Former investment banker Freud called in his government-commissioned report of March 2007 for greater use of private and voluntary sector expertise in getting harder-to-help benefit claimants back to work.
AME-DEL is an acronym of two critical government money pots, Annual Managed Expenditure (which benefits come from) and Departmental Expenditure Limits (which funds back-to-work schemes). The idea is to take money from future benefits budgets and spend it on getting people into work now so they never need those benefits.
The government pledged to forge on with its welfare reforms despite the economic crisis. The White Paper says: “Some people have argued that now is not the time to press ahead with welfare reform. We believe the opposite is true.
“The current economic climate means we must step up both the support we offer to people on benefits and the expectations of them to get themselves prepared for work. To do otherwise would be to repeat the mistakes of the past, writing people off and encouraging the long-term benefit dependency that still scars too many of our communities.”