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Work Programme

Volume 516: debated on Monday 18 October 2010

1. What progress his Department has made towards the launch of its Work programme providing personalised assistance to those out of work. (17481)

3. What progress his Department has made towards the launch of its Work programme providing personalised assistance to those out of work. (17483)

I am pleased to inform the House that the contracting process for the Work programme is going well. We have had more than 100 expressions of interest from would-be prime contractors. We will announce those who will be on the framework in late November and we will then move on to the next stage of contracting. All is on track to launch the Work programme in the first part of next year.

Is the Minister aware of the work of the Keystone Development Trust in Thetford, particularly the social enterprises it runs such as the green bikes scheme, which helps local people to get into work and gain practical skills? It is setting up a pilot that is due to be launched in November. Is the Minister willing to come and see the pilot in action?

I am delighted to hear about the work that is being done in my hon. Friend’s constituency, and when I am next in Norfolk I shall be delighted to find out more about the work being done there. Her comments underline the very important role that the voluntary sector and social enterprises play in getting people back to work. That is why we stipulated that prime contractors for the Work programme must demonstrate an ability to forge a team of specialist organisations, including social enterprises and voluntary sector bodies, that have the expertise that we need—either on a localised, geographic basis or in dealing with specific groups with a particular need—to ensure that we get people back into work. It will be a requirement of the Work programme that they have a place at the table.

May I urge my right hon. Friend to select a number of providers who have strong roots in rural communities both in advising clients and in networking among the rural labour market?

I absolutely assure my hon. Friend that that will be a factor. As we select organisations to fill different geographic parts of the Work programme, bidders’ ability to demonstrate a knowledge, awareness and understanding of the geography they will be dealing with will certainly be a factor for us. In substantially rural areas, it is essential that organisations have the expertise to deal with the particular challenges of the rural economy and not simply with those found in towns and cities.

Does the Minister agree that the best personalised assistance that could be offered to a couple with six children who are facing the £500 benefit cap would be to advise them to split into two single-parent families of three children? As a family, they already consume £500 in benefits plus £250 in housing benefit, but as two separate units they would get £250 each in benefits plus £250 in housing, thereby costing the Exchequer £1,000, using two houses and being a split-up family.

I hope that the hon. Gentleman will recognise how important it is that work pays in our society and how frustrated working people are that it is possible for a family to receive, when the tax equivalent is taken into account, an income comparable to £35,000 a year in benefits. If we are to send the message that work pays, we have to limit the amount that the state supports people when they are outside work.

The Minister will be aware of the pilot scheme operating in Aberdeen and Aberdeenshire. In this extremely rural area, people are being asked to travel significant distances to appointments and the availability of suitable public transport is very limited. Will he consider taking appointments to the rural communities where people are rather than asking them to travel long distances to jobcentres?

One reason we are doing the two pathfinder projects is to understand precisely the issues and challenges that we will face when we roll out the programme nationwide next year. I am very happy to consider any of the lessons that have been learned from the experience in Aberdeen and Aberdeenshire to see whether we can do things better. In the mean time, we have provided additional funding to the two towns and cities involved in the first programmes—Burnley and Aberdeen—so that local needs that arise during the process can be met.

I applaud the payment by results model: it has worked in America and Australia, and it will work here. May I draw my right hon. Friend’s attention to the Department for Work and Pensions website of 19 July, where he makes the point that results have to be delivered before any payment is made? Lots of small charities that I have spoken to up and down the country say that that will mean that they simply do not bid for contracts, even if they are part of a consortium with a big corporate player. What will my right hon. Friend do to design a system to protect the interests of the smaller charities that are so important for the big society?

May I say what a great pleasure it is to have a question from my hon. Friend, and to see him in his place?

We are doing everything we can to ensure that the systems in place are suitable to ensure we have a mix of organisations. We have launched a specific new code of conduct for prime contractors—the Merlin standard—that is designed to ensure that they look after the commercial interests of smaller organisations on the framework, or that are working with framework providers. It is essential that we have a proper mix of organisations involved in the Work programme and we will take all the steps we can to ensure that that is the case.

A great deal will hang on the Work programme. We all remember the damage in our constituencies when unemployment reached 3 million before, and we remember which party was in government at the time. The warning last week from PricewaterhouseCoopers that 500,000 private sector jobs, as well as 500,000 public sector jobs, are under threat makes clear the danger ahead. The Minister will know of the fear of the small providers we have been talking about—social enterprises, rural organisations, community groups and faith groups—that they will be included in bids for marketing purposes, but dropped once the contract is awarded. How will contracting address that danger?

I welcome the right hon. Gentleman to his position. I look forward to working with him, as well as debating the issues, over the months ahead.

PricewaterhouseCoopers’ chief economist said he expected the private sector to be able to take up the slack from changes in the public sector. On smaller providers, the Merlin standard is designed to achieve precisely what he aims for. Under the terms of the Merlin standard, a prime contractor who wins a contract off the back of an attractive-looking consortium of organisations but dumps them all the next day can lose its contract. We shall be assiduous in ensuring that the interests of smaller subcontractors are protected, particularly those with the specialist needs we absolutely need for the Work programme. That is what the Merlin standard is designed to achieve.