James Purnell has again repaid my faith in him. What he is proposing is a much needed expansion in the part-privatisation of the benefits industry. As I say in tomorrow’s magazine, the task is not so much welfare reform as regime change. The DWP boasts that it spends more money than the economic output of Portugal. With 5.1m on benefits, it also has more people than the entire poulation of Ireland, Norway or Lithuania. Yet Purnell, following the tried-and-tested procedures in Australia and America, will invite bids from the private sector for welfare-to-work contracts, by which the private companies would be paid by results.
Remember, a huge chunk of those on benefits are using it to supplement income made in Britain’s booming black market. If these new providers are simply less gullible than the government, i.e. if they demand to see the supposedly workless at times of the day that could not fit with black market work, then welfare rolls will drop dramatically.
I judge welfare to be a huge failure of this government, but in both Glasgow and Liverpool welfare dependency has fallen from a third to a quarter of the working age poulation thanks to such sub-contracting. The eleventh-hour inroads being made, through what little private workfare provision is operating now, is working, Purnell is to be congratulated if he means what he says and wishes an urgent and rapid expansion. As the FT says, the test will be how many business proposals turn into contracts.
My cover piece tomorrow is about what the Conservatives will do in their first year of government. Welfare, I say, will be the biggest task. It will not be quite so big thanks to the good work Purnell is doing. Grayling needs to expand on what he will inherit.
One final thought. I also believe it is too late for Brown to take any credit for any positive developments that Purnell’s measures bring about. It could well be that Grayling in 2014 walks away with all the credit, just as Brown claims credit for an economy fixed under Major.
Comments