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Purnell: Specialists must help the long-term unemployed not just find work but stay in work

DEPARTMENT FOR WORK AND PENSIONS News Release (Reference EMP-063) issued by The Government News Network on 28 February 2008

Employment experts in the public, private and voluntary sectors will be paid to not just help the long-term unemployed into jobs - but to keep them there, Work and Pensions Secretary James Purnell announced today.

Publishing the department's 'Commissioning Strategy', James Purnell announced a much greater focus on payments by results when awarding welfare-to-work contracts to the public, private and voluntary sectors in Great Britain.

The strategy means contractors working together to deliver solutions to the hardest to reach.

James Purnell said:

"The private and voluntary sector already plays a role in delivering our work programmes. I want to take this to the next level, free them from central control and allow them to innovate. Their involvement is here to stay and set to grow.

"For the providers the rewards will be high, with longer contracts and a growing market, but in return I will set high expectations with payment on results.

"I want to see solutions which focus on every single individual, not just the ones who are motivated to work. Increasingly providers will be rewarded when someone has been in work for at least 6 months in the first instance, rising potentially to 18 months further down the line."

According to the new strategy, organisations will have to offer jobseekers more creative and innovative ways of helping them to overcome their specific problems.

An increasingly significant proportion of the rewards paid to these specialist providers will be paid when someone has been in work for at least 6 months in the first instance, rising potentially to 18 months further down the line.

This compares to the current system where only the first three months of a person's employment are taken into account. In return, providers will be rewarded with longer and larger contracts. These contracts will last up to 5-7 years, instead of the current average of 3 years.

David Freud, who has been advising the DWP on the commissioning strategy since he was appointed as the department's welfare reform adviser in January, said:

"Contractors will be paid by results and customers will get the long-term support they need to ensure they get into the world of work and stay there.

"The new strategy also has the potential to open up a whole new type of competition in the market place, offering openness and transparency where competitors can measure each others successes - I welcome this."

The strategy also builds on James Purnell's announcement last week that the long-term unemployed claiming jobseekers allowance will have to undertake a minimum of four-weeks full-time work-related activity or lose their benefits from next year as part of the Flexible New Deal (FND).

The strategy also shows how the concerns of smaller organisations and charities will be addressed, to ensure that the department continues to utilise their expertise in helping those furthest from the labour market get back into work.

Notes to editors

1. The full Commissioning Strategy can be found at the following link: http://www.dwp.gov.uk/publications/dwp/2008/com-strategy/cs-rep-08.pdf .

2. The FND will be the first employment programme to be contracted under the new strategy. We will shortly be calling on public, private and voluntary sector organisations to bid for this programme, with advertisements placed in the Official Journal of the European Union.

Website http://www.dwp.gov.uk