Welfare Reform Bill

There is an argument that the Government, taking a very short-sighted approach, may well want to do exactly that—drive down the headcount. They may try to look at the issue as a cuts exercise, or a reduction-of-expenditure exercise, and dress it up as a way of increasing performance and getting people back into work, or preparing them for work. However, all the evidence points in the opposite direction. All the evidence points towards abortive costs. If contracts are awarded to companies that go belly-up and into administration, we are back to square one, and there will be abortive costs as a result of going through the whole tendering process again. The argument has been put forward that the measures are not about private companies, but about awarding contracts to the voluntary sector, or third sector, as we now call it. Well, in the recent period, 33 out of 34 DWP have gone to the private sector, not the voluntary sector. The private-sector companies have largely been the large corporates. We have consulted, and looked at the evidence from, the voluntary sector. I give the example of the Leonard Cheshire charity. It stated that the model that the Government were putting forward would result in the""complete loss of the competitive market, to the detriment of small specialist existing providers, as well as the removal of customer choice and control"," because contracting out is being dominated by the large companies.