Whitehall's plans to outsource local employment services to ‘prime contractors' have received a tentative thumbs-up from MPs, despite warnings there was no evidence it would improve performance. The Commons' work and pensions select committee believes ministers should forge ahead with plans for a Flexible New Deal (FND) programme, which would see responsibility for long-term unemployment benefit claimants transferred to regional ‘prime' contractors. But a study of the FND proposals, published by the committee on 5 March, warns that while ‘there are international examples which demonstrate the value of marketisation in welfare-to-work provision, there is limited evidence from the UK'. Work and pensions secretary, James Purnell, wants to begin using regional contractors from October, charged with getting hundreds of thousands of incapacity benefit claimants with mild conditions, for example, off welfare and into sustained employment. Mr Purnell intends to use contractors to provide tailored support to long-term benefit claimants, including rehabilitation programmes, skills training, and assistance in finding work. Under the plan, councils and employers will also work alongside sub-contractors, such as local charities. Potential prime contractors are currently at loggerheads with ministers over their payments under the new regime. They want Whitehall to provide more money upfront to deal with higher unemployment throughout the recession. Mark Serwotka, leader of the PCS union representing Jobcentre Plus staff, warned ministers to ‘fundamentally rethink' the contracting plan.
