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Reducing dependency, increasing opportunity: options for the future of welfare to work - the Freud review

introduction 
background 
summary of main proposals 
responding to the freud proposals
implementation of freud  
the view of disability alliance 
more information

Introduction

On 5 March 2007 David Freud, who is advising the Government on the long term review of the Government’s Welfare to Work strategy, delivered his report to the Department for Work and Pensions (DWP).

Background

John Hutton announced the Freud review in a speech made on Monday 18th December 2006. The review was intended to

"undertake a wide-ranging review of our welfare to work strategy – to consider how we can best tackle economic inactivity and promote social mobility through a renewed welfare to work policy and delivery strategy for the coming decade.

The review will address the specific challenges I have raised today. How we can tackle the “can work, won't work” culture. How we can best help local communities deliver local solutions to worklessness. How we can prepare for a fall in the demand for unskilled labour. And how we can best support families and tackle ethnic disadvantage as we seek to eradicate child poverty."

The review sets out to cover three sets of issues:

"Firstly, the design of welfare to work policy. The balance between rights and responsibilities; whether and how we should strengthen incentives to work; and whether there is a role for greater conditionality within the system. It will look at the steps we can take to promote social mobility, especially by supporting progression through work and through an integrated approach to skills which builds on the recommendations from the Leitch report [ Prosperity for all in the global economy - world class skills] earlier this month.

Secondly, to consider the devolution of welfare – building on the City Strategy and other local initiatives to open up new opportunities for delivering employment services to some of our most disadvantaged communities.

And thirdly, to examine the delivery of welfare in Britain over the next ten years. How we can build a more effective market in the provision of employment services – with a more customer-focused welfare delivery system that better reflects the Government's wider public service ambitions of greater choice and empowerment."

Summary of main proposals

The proposals, as set out in the DWP press release are as follows:

• 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. The report recommends the use of private contractors because no one else could raise sufficient capital. It is proposed that there will be eleven regions, one contractor for each region. Voluntary sector organisations may be subcontracted for certain services.
• 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.

Implementation of Freud

Although the Government response to the Freud report was favourable there was an initial reluctance to intiate all of its proposals. An article in "The Guardian", Friday April 20, 2007 (Leak shows Treasury has consigned Blair welfare privatisation to the back burner -Patrick Wintour, political editor) stated that the proposals contained within the Freud report " will not be implemented in the short term".

Peter Hain MP, in an interview published in the Financial Times, July 30 2007 (Hain cool on private sector job contracts) stated that the prime private contractor route "is not my preferred option". Instead he emphasised the importance of the roles played by the voluntary sector and local government as well as employment partnerships.

However it now appears that Government opinion has shifted in favour of a greater implementation of the recommendations of the Freud report (see Millions forced to work in benefits shake-up - Telegraph, Wednesday 27 February 2008).

The DWP commissioning strategy, published February 2008, describes how the Department for Work and Pensions will implement David Freud’s proposals.

David Freud was reported as saying that “up to two thirds of people claiming incapacity benefit are not entitled to the state handout” (see disability alliance expresses concern at "freudulent" claims made in a newspaper article).

The view of Disability Alliance

Disability Alliance has produced a Response to Reducing dependency, increasing opportunity: options for the future of welfare to work. You can view it by clicking on the Disability Alliance responses link below.

More information

• articles
  1. leak shows treasury has consigned blair welfare privatisation to the back burner - guardian article
  2. hain cool on private sector job contracts - financial times article
  3. disability alliance expresses concern at "freudulent" claims made in a newspaper article
  4. millions forced to work in benefits shake-up - telegraph article
• press releases
  1. john hutton announces timetable for welfare reform
  2. john hutton's speech announcing the review
  3. announcement of publication of review
• reports
  1. dwp commissioning strategy
  2. fairness and freedom: the final report of the equalities review  
  3. flexible new deal: making it work - This report by the Social Market Foundation looks at how the replacement of New Deal with Flexible New Deal (FND) from October 2009 will be effective in helping long-term unemployed people into work.
  4. freud review: reducing dependency, increasing opportunity: options for the future of welfare to work
  5. prosperity for all in the global economy  
• responses to the freud review
  1. child poverty action group
  2. disability alliance
  3. mind
  4. one parent families
• other policy and research documents

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