Day 83 – The New Benefits System

This week, I was party to a briefing by a senior civil servent on the future plans for the benifits system in the UK. The plans haven’t been formally released yet, although given the open invite to the briefing, I can surmise that they are in the public domain.

Since the benefit system is of interest to so many in the UK, I’ve reproduced my notes in longhand. It’s worth noting that I may not have all details quite 100% correct.

Situation at Present

  • Approximately 5 million people are jobless and on benefits.
  • The largest group of claimants is those on disability benefits.

Coalition Goals for Welfare Reform

  • Reduce the number of benefit claimants.
  • Get people into sustainable employment.

The New Welfare System

All benifit claimants will be subject to twelve months on Job Seekers Allowance and other benefits as at present. During this time, they will receive support from the Department of Work and Pensions through JobCentre Plus.

If employment has not been found within this period, claimants are handed to private service providers. Private employment providers will receive a small payment for each individual taken on. They will then provide claimants with support in order to find long-term, sustainable employment. This support may include training, provision of treatment for mental health issues or a variety of other services. These will vary considerable depending on the providers.

When claimants have found sustainable employment, the private service provider receives a large payment. It is envisaged by the DWP that companies will lower the required payment on successful employment in order to remain competitive with each other. These payments will come from savings made through getting benefit claimants into work. Free market economics will (in theory) ensure that any inefficient providers will go bust (NB. this was the same argument used during rail privatisation).

There appears to be a high risk of those who are considered too unemployable being left behind as private companies race to make a quick buck using those who are more employable. This may result in those in need of greater support suffering.

This system is intended to be implemented by Summer 2011. Full plans are due to be announced in the next two weeks.

Named Potential Providers

  • Serco
  • Working Links
  • “A Local Authority”
  • “A college”
  • “Various Third Sector Parties”


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