Private companies to be rewarded for welfare failure

Ah, those welfare “reforms” that neoliberal Mr Purnell is pushing – you know, the plans to cut benefits and provide cheap labour for big business get the long term sick and unemployed back into work?

As my comrade Robert will attest, it’s not easy for people with disabilities to get back into work even when the economic climate is supposed to be good – never mind in a full-blown recession.

Will workfare make things better?

The FT reports on the preliminary results:

A flagship £1bn government programme to find jobs for people on sickness benefit is running 73 per cent short of its target, an unexpectedly bad outcome that will test political consensus about expanding private welfare provision.

The poor performance data, measured before the big increase in unemployment caused by the recession, has wide implications for direction of welfare reform, the price of existing contracts and the terms of future negotiations with private providers.

Ministers in recent years have been fighting to outdo the Conservatives in their support for welfare-to-work schemes, advocating the reforms as a relatively cost-free way to slash welfare rolls and to save the exchequer billions.

The disappointing early results from the Pathways to Work scheme provide a reality check, suggesting to cut the 2.6m incapacity benefit roll is harder and more expensive than expected.

James Purnell, welfare secretary, has proposed extending similar “payment by results” schemes to all those on sickness benefit deemed fit for work. Pathways’ performance record will make it harder for providers to raise private finance to invest in advance, especially in recession.

Almost all companies are losing money on Pathways contracts. One executive described it as “cash crunch” that could push some groups over the edge. “It is getting to the stage where they’ll be handing back the contracts,” said another industry insider.
[...]
Pathways was rolled out nationwide last year, the government’s first concerted attempt to tackle stubbornly high incapacity benefit rolls. But between April and September providers achieved only 27 per cent of the target to place people in “sustained jobs” for 13 weeks, according to figures published by website Indus Delta.

So, what’s the deal then? What now?

Why, bail-out the private companies, of course!

Give them the cash up front! Payment before results!

From Tribune:

As the Government’s welfare reform bill was debated by MPs for the first time, Liberal Democrat MP Steve Webb asked him if he intended to change the contracts “so that more of what the providers get is a lump sum and less is related to performance?”

Mr Purnell replied: “We are happy to consider whether we can ‘front-load’ the payments for taking people on,” and added that there had been “very good interest” among companies for him to do just that.

The Department for Work and Pensions has already received bids from companies seeking the contracts, and is preparing to choose the successful bidders.

Now, I know what you are thinking. The government already has job centres and employs many professional and hard-working people to assist the unemployed in finding employment.

But that’s no good for the super-rich, is it? Where’s the profit in that?

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2 Responses to “Private companies to be rewarded for welfare failure”

  1. Jack Stephens Says:

    Funny how when workers need money the government says, “No way! We’re in a recession!” And when companies need it, “Hey! No problem! What’s family for?!”

  2. charliemarks Says:

    Family’s right. There’s a scandal going over here about members of our second chamber – the House of Lords – who have been caught on tape admitting they take tens of thousands of pounds from big businesses to change laws.

    Worse still, these guys aren’t even elected – they are appointed by prime ministers and can’t be sacked, not even if they break the law – they can still go on making laws!


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