Well, who could have predicted that the private companies contracted to deliver Pathways to Work is an unmitigated disaster.
Under data released by a freedom of information request it shows that the private sector is running 73% short of its target..!! Programmes have delivered 60% of the expected jobs in the six months to September 2008, while consuming 98% of the expected expenditure.
Responding to the figures, Chris Melvin, chief executive of Reed in Partnership, one of the providers, said ‘People are losing money on these contacts, quite seriously. The majority, if not all, of the providers will be losing money.’ The deals were signed before the economy turned, he said, and it would be ‘a logical conclusion’ that providers had ‘priced too low and promised too good a performance.’
And further woes for NL as the DWP has halted the tendering process for the Flexible New Deal because of the current economic crisis. The reason being is that the number entering Phase 1 of the Flexible New Deal is likely to be up to 300% greater than originally anticipated.
The DWP advises: there will be a short pause in the competition to enable us to jointly consider the impact and options to address the financial challenges in the initial phase of the contract.
But never fear the DWP remains committed to beginning delivery of the Flexible New Deal from 1 October 2009.
Will NL learn that privatisation and contracting out public services doesn’t work…..
Agree with all of that.
To be fair though, it takes a certain kind of genius to design a system where the whole point is to hand money over to the private sector, but which ends up making the private companies which receive the handouts lose loads of money.
I joked at the time that these private companies would end up paying people a pittance to sit in a room for a few hours before laying them off and re-employing them when they turn up at the job centre – gaming the system, in other words.
Now it appears that in some parts of the country, the only people creating jobs are the job centres themselves. Oh, and debt collectors…
[...] Personal is the Political « Welfare reform: private sector isn’t working…. Blunkett and A4e February 3, 2009 The Observer ran a piece last Sunday on Blunkett and [...]
[...] More on welfare reform and the private sector…. February 8, 2009 I wrote about this earlier in the week NL halting the bidding for contracts regarding the flexible new [...]