Employers key to government welfare reforms

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The government’s proposals to tackle welfare dependency will depend on employers getting the rewards they deserve for the risks they are taking, according to the CBI.

The comments follow the publication of the Freud Review, Reducing Dependency, Increasing Opportunity. The Chartered Institute of Personnel and Development (CIPD) has also pointed out that employers are the key to the recommendations’ success.

Options for the future of welfare to work include:

  • Greater use of private and voluntary sector resources and expertise so harder-to-help benefit claimants receive more employment support
  • Focus on long term mentoring to encourage people 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 people in employment for as long as three years
  • 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.

Secretary of state for work and pensions John Hutton said: “We must make use of all the experience and expertise which exists in the private and voluntary sector to complement the role of the public sector in delivering welfare. These groups can make a real difference in supporting the most disadvantaged into work and helping them stay in a job over the long term rather than coming straight back onto benefit.”

CBI deputy director-general John Cridland said: “There are jobs available in the economy for people with the right skills and the right attitudes, so any programme to tackle persistent long-term unemployment must ensure people are properly equipped for the workforce.

“Companies stand ready to help with that. The report’s recommendations on involving new organisations from the private and voluntary sectors in getting the long-term unemployed and most disadvantaged off benefit are welcome and will deliver results.

“Given the challenges, the programme must be properly funded. Contracts must be for the full cost of the scheme and must ensure those firms who perform well get the rewards they deserve for the risks they are taking. There can be no room for short-term penny-pinching when the long-term benefits to the country are so high.”

The CIPD believes the private and voluntary sectors can help improve the employability of welfare claimants.

But CIPD chief economist John Philpott warned: “In a jobs market where, as CIPD surveys find, a large proportion of employers are wary of recruiting from the ranks of long-term benefit claimants, more will need to be done to bring employers on board.”


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