HR Industry News

Private sector back-to-work schemes no longer preferred option

— 7 August 2007 —

The new Secretary of State for Work and Pensions, Peter Hain, has revealed funding to encourage private sector companies to develop back-to-work schemes is only likely to rise by 25%.

What is surprising is that with some private sector organisations routinely showing 1% absence rates or less, the public sector is not embracing the organisations that supply such services.

Paul Avis, Ceridian

Despite the recommendations of the Freud Review, he is reported as saying that widespread private sector involvement in getting people off benefits was not his preferred option.

Hain has told a national newspaper that the £800m spent on payments to companies that have got people off benefits would only rise to about £1bn.

Instead of following Freud’s recommendations for radical reform to reduce unemployment, Hain said he wanted to maximise the role of the local authorities in getting people back to work.

But he added that the door was still open to greater private sector involvement and said it is not his preferred option but people can persuade him to if they are able to.

“The conundrum here for the public sector is a simple one: they require results but will not pay the money to get them. With onerous public sector procurement processes, many private sector vocational rehabilitation organisations will not be bidding for the work - the message is simple: you pay for what you get!” comments Paul Avis.

Earlier this year former journalist and investment banker David Freud called for greater involvement of the private sector.

Freud said the government must make use of all the experience and expertise which exists in the private and voluntary sector to complement the role of the public sector in delivering welfare.

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