05 March 2007 - Radical review of welfare could help thousands more into work
A radical review of the welfare system carried out by David Freud is welcomed today by Prime Minister Tony Blair, Chancellor of the Exchequer Gordon Brown and the Secretary of State for Work and Pensions John Hutton.
The recommendations in David Freud’s report, Reducing Dependency, Increasing Opportunity: options for the future of welfare to work include:
- Greater use of private and voluntary sector resources and expertise so harder–to-help benefit claimants receive more employment support – particularly existing customers who have been trapped on benefit for long periods of time;
- A new focus on long term mentoring to tackle the problem of repeat benefit claimants – helping keep customers in work and encouraging them to progress to higher paid jobs rather than returning to benefit dependency;
- Greater rewards for organisations that are successful in helping claimants find and stay in work, with higher payments based on sustaining customers in employment for as long as three years. This could be financed by savings to the taxpayer from having the customer in work rather than claiming benefit;
- Greater personalisation of employment support, with higher financial incentives for organisations to target resources at the hardest-to-help who need more support before they are ready to return to work;
- Retaining Jobcentre Plus’s role in helping customers during the early stages of their period on benefit and creating a new role for the organisation to assess how much support individual claimants are likely to need before they are ready to return to work;
- Rebalancing rights and responsibilities in the welfare system – matching increased support with greater obligations on claimants to look for work. In particular placing greater responsibilities on lone parents with older children to look for work once their youngest child reaches 12, rather than the current age of 16; and
- Simplification of the benefits system.
Welcoming the review John Hutton said:
“I welcome this report and want to thank David Freud for giving up his time to produce it. He has set out a compelling framework for the next stage of welfare reform which the government must now carefully consider.
We have made real progress so far, with 2.5m more people in work since 1997 and 900,000 fewer on benefits. But we must go further and find new ways to support the hardest to help into work.
“We 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. These groups can make a real difference in supporting the most disadvantaged into work and helping them stay in a job over the long term rather than coming straight back onto benefit.”
Commenting on the proposals to change support for lone parents, Minister for Welfare Reform Jim Murphy said:
“We have helped over 300,000 lone parents off benefits and we now have over a million lone parents in work. But for those without work we must do more. It is clear that the majority of lone parents want to work, they want to provide for themselves and their children, but they need more support to make that happen.
“The Freud review sets out the case for rebalancing rights and responsibilities in the welfare system. If we can offer lone parents greater levels of support – whether it is retraining, childcare support or help with finding the right job – it is right that we debate whether they should have a greater responsibility to look for work when their child reaches an appropriate age. We will therefore be considering the recommendations in the review very seriously.”
David Freud, who was asked by John Hutton to carry out the review, said:
"This is a radical reform designed to reduce social dependency of the most disadvantaged. I am proposing a structure in which the private and voluntary sector would be prepared to invest substantial sums, with minimal risk to the state. In return, I am looking to people with more barriers to work to engage fully with the new support system."
Notes to editors
- David Freud has had a distinguished career as a journalist for the Financial Times and as an investment banker at Warburg (now UBS). He has previously worked with Government on a number of issues, including the Channel Tunnel rail link, the national air traffic control system, and the Royal Mail. He is currently chief executive of the Portland Trust which works for stability in the Middle East through economic means.
- John Hutton announced the Freud review in a speech made on Monday 18th December 2006. His speech is available on the DWP website at: http://www.dwp.gov.uk/aboutus/2006/18-12-06.asp
- Reducing Dependency, Increasing Opportunity: options for the future of welfare to work is available on the DWP website: www.dwp.gov.uk/welfarereform/seminars/
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