No ‘excessive’ profits in back-to-work programme
Providers that get people back into work will not be able to make “excessive” profits, the employment minister has said.
Chris Grayling told the Commons work and pensions committee that he did not believe there was a way for companies running welfare-to-work programmes to beat the new system.
“Contractors can only make money if they get people into work and they stay there,” Mr Grayling said.
The government’s work programme, to replace the current pathways scheme, will see private and voluntary organisations bid to get the unemployed back into work.
They will receive a results-based payment – if they get an individual into employment for a prolonged period of time, they will then receive the maximum payment.
“They can be respectfully profitable but not stupidly so – providers who are excellent at getting hard to place people into work will make profits,” the minister said.
“The whole structure of the work programme is to stop companies sitting underperforming – there will be internal pressure to improve.
“We will allow them to do well if they do well at the things we want them to do.”
The minister also dismissed claims that firms were set to fire workers in the gap between the end of the pathways programme in April and the new work programme beginning in June, saying “there’s no reason for it to happen.”
“They are the ones choosing to bring the shutters down in April,” he said.
“There is no obvious reason to me why they should bring the shutters down on the date, in the six-eight weeks before the work programme begins.”