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Work Programme

Volume 519: debated on Monday 22 November 2010

3. What steps he is taking to encourage social enterprises to become providers under the Work programme. (25109)

As the right hon. Lady knows, involving the specialist skills of the voluntary and social enterprise sectors in delivering the Work programme is extremely important, particularly where they have expertise in helping the hardest-to-help groups. Across the summer, we held a series of consultation events across the country, and we have had meetings through some of the professional organisations that represent different elements of the voluntary sector. The Minister for Welfare Reform—Lord Freud—and I have held meetings in the City to try to encourage financiers to support the voluntary sector in its approaches to the Work programme. I cannot give the right hon. Lady information about the specifics of the process today, because we will be publishing more details in due course, but I can assure her that we are keen to keep those organisations present.

I am grateful for the Minister’s reply. He knows that many social enterprises, such as Work Solutions, which does a fantastic job in the Ordsall area of Salford to get people back into work, have very tight margins, and often struggle with cash flow. If the national system is to be about payment by results, what measures will he take to ensure that small organisations, which are often without a financial buffer, can survive within the system and provide the specialist services that only they can provide?

We have introduced the Merlin standard, a new code of conduct for suppliers to the Department for Work and Pensions, which will apply to the prime contractors for the Work programme. They will be obliged to do the right thing to support their subcontractors appropriately financially. If they fail to do so, and treat their subcontractors financially inappropriately, they could lose their contracts. The system has just won an award for its role across Whitehall—there is potential for it to be used elsewhere in Whitehall—as best practice for dealing with small subcontractors. We must protect them, because they have a huge role to play.

Will the Minister join me in congratulating Progress Recruitment on its work in Blackpool? It is a social enterprise that works with many of the hardest-to-reach people in my constituency to get them back to work. Will he do all he can to encourage local government, when it again considers its service provision, to look at whether it can spin off organisations such as Progress Recruitment as social enterprises, as part of reconceptualising that service provision?

I certainly praise the work that has been done in Blackpool, and I praise my hon. Friend’s work in supporting that activity. Not many people understand the scale of the social challenge in Blackpool, and the work that is done by organisations such as the one in his constituency is extremely important. I very much hope that the framework that we are creating for the Work programme will give local authorities and local organisations the scope to work alongside providers to deliver local solutions to some of the problems. I have no doubt that social enterprise should be and will be part of that. Local authorities can help to make that happen.

Does the Minister accept that there is considerable support on the Labour Benches for the point that my right hon. Friend the Member for Salford and Eccles (Hazel Blears) raised? Does he accept that if we are to protect social enterprises, and if they are to play a greater part in welfare reform, that will require almost a total change in attitude from the big providers? Birkenhead had one of the best organisations—A&P Group—but it did not win the larger contract, and did not want to, and the large provider had no interest in making sure it survived. It was a huge loss to young people in the area who, until then, had had a Rolls-Royce service.

I am grateful to the right hon. Gentleman for highlighting such an important point. I have been very clear to people who are bidding for the Work programme that we expect them to demonstrate their ability to assemble a consortium or organisations with the specialist skills to help the hard-to-help groups. Many of those organisations are in the voluntary sector or the social enterprise sectors. If they do not demonstrate that ability and if they do not have those networks, they will not get the contracts. It is as simple as that.