Private providers set to run welfare-to-work services

Welfare-to-work services could be outsourced to private and voluntary sectors in line with the recommendations of an independent review, the government said today.

New work and pensions secretary James Purnell said the reforms would mean services were run by the “best provider”, whether from private, public or voluntary sectors.

He pledged the creation of an “effective and growing market” for welfare-to-work, following last year’s review by former City banker David Freud.

Incapacity benefit

Purnell said: “We shouldn’t be ideological about who provides the service. We should just work out who is best at providing it. I’m glad to announce that David [Freud] has agreed to come back to advise the department on implementing his ideas.”

He reiterated plans to replace incapacity benefit with employment and support allowance, due to come into force in October.

He said the government intended to help everyone who faced barriers to work, but those who were capable and did not want to work or train would face sanctions.

The Department for Work and Pensions also published research today that found benefit sanctions had a negative effect on claimant’s health and hit the most deprived hardest.


Kate Green, chief executive of Child Poverty Action Group, said the findings suggested benefit sanctions should play a “more limited role.”

She warned Purnell against engaging in “oneupmanship” with the Conservatives, who have previously suggested docking jobseekers allowance from claimants who fail to accept job offers or participate in community work schemes.

Green added: “The Department for Work and Pensions is in danger of losing track of its headline priority to end child poverty. The new secretary of state must refocus welfare reform on positive engagement and the protection of family security.”

More information

Department for Work and Pensions

David Freud review

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