Private firms are to compete for a share of a new multibillion-pound market in getting millions of unemployed people into work under plans unveiled by the Government.
Contracts worth up to about £50 million a year each will be on offer to private, public and voluntary organisations as part of the coalition's proposed Work Programme.
The welfare-to-work scheme, potentially costing about £3 billion a year, will see providers paid almost exclusively by results and out of savings made from getting people off benefits.
Organisations were this week being invited to enter bids to take part in the programme, which is intended to be up and running from next summer. It will take over from a raft of existing welfare-to-work schemes - introduced by the former Labour government - which are to be largely phased out.
Employment Minister Chris Grayling said the reforms would help "break the cycle of benefit dependency that has blighted some communities". He said there were thousands of people claiming incapacity benefit (IB) who were "able to work".
Organisations which win contracts as part of the Work Programme will be expected to come up with their own ways of achieving results.
A new Government guide published for potential "delivery partners" said that payment would be "exclusively or largely for delivering results" and would come after delivery.
"We expect that our delivery partners should be able to demonstrate the capital strength to take on the risks inherent in an exclusively or heavily outcome-based approach where we seek to deal with the cases of millions of people on out-of-work benefits," it said.
Funding will be found from benefits savings and will reflect the difficulty of getting different groups of people into jobs. Organisations will have to apply to take part in a Work Programme Framework, described as an umbrella commercial arrangement within which contracts will be awarded.
Read More
"The indicative value of contracts to be awarded through this new Framework could be between £0.3-£3 billion per year, with average individual contract values estimated to be approximately £10-£50 million per year," the guide stated.
