Work and pensions secretary James Purnell promised a more employer-focused welfare-to-work system yesterday as he revealed how the new contracts would look.
Purnell said that private and voluntary sector specialists would be encouraged to focus on employers’ needs through longer contracts and payments based on finding sustained work for the long-term unemployed.
“We will personalise the service to the client by freeing up the provider to focus on the client,” he told an audience at a CBI-hosted business event in London.
He was launching the department’s Commissioning Strategy, which sets out how the welfare-to-work contracts – expected to be worth £1bn annually – will look.
Specialist providers will receive a significant amount of their fee after a jobseeker has been in work for six months, rather than when they land a job and after three months, as at present. This could increase to 18 months in time, Purnell said.
Providers will also receive larger contracts lasting for five years and occasionally seven, rather than the current average of three.
The CBI broadly welcomed the plans, but said it had some concerns, including the role retained by Jobcentre Plus, which will continue to deal with jobseekers for the first 12 months they are unemployed.