Welfare Reform Bill

I was tempted to table an amendment to leave out subsection (1) of new Section 17B in its entirety, but I doubt whether the Clerks in the Public Bill Office would have let me get away with it since paragraphs (c), (d) and (e) are money provisions and thus the province of another place, not your Lordships’ House. My next thought was to add yet another probing amendment to leave out paragraphs (a) and (b), which may have made it easier for the Minister to see what I was getting at. As it is, I chose just to leave out the words "by whatever means" in paragraph (b) to discover exactly what the proposal is here. To my mind, the Secretary of State does not need to make arrangements for anyone in the department, including jobcentre personnel or their workplaces, because he already has adequate powers to do just that, as the Peers’ information pack makes clear. He already has the power to establish new providers, as in the case of the Flexible New Deal. The whole subsection must refer to contractors who are to manage people working for their benefit. The question therefore is what new powers is the Secretary of State seeking with regard to "work for your benefit" programmes that he does not have already? I also intend to use this amendment to probe the all-important question of how the Flexible New Deal contracts are to be organised. As I said at Second Reading, and the Minister did not contradict me then, they are front-end loaded. As I understand it, the contractor gets 40 per cent originally, 30 per cent after 13 weeks and the last 30 per cent after six months. When this job lasts for only a week or two and the participant loses it, he becomes a new participant in the welfare-to-work provisions. This cannot be the right approach. First, we believe that the contract can be said to have succeeded only when the participant holds down a full-time job for six months, during which time the contractor should be guide and mentor if that is needed. Obviously, he would expect to be paid for this service, which I understand does not exist at the moment. I suggest 25 per cent for taking on the participant, 25 per cent after three months and 50 per cent when the contract can be said to be completed; that is, when the participant has held down a job for six months. Back-end loading of this nature will be a very big incentive to the contractor to concentrate more on individual participants and will remove the temptation to think that any job will do, no matter how long it lasts. I expect that by the time the welfare-to-work provisions in Clause 1 come into operation, the current very deep recession will have run its course and the economy will be starting to revive. In that scenario, jobcentres will find it relatively easy, as they have in the past, to promote jobs for people who have been unemployed for six months. However, the problems, as we discussed a little earlier, will continue for those who have been unemployed for longer. The Minister cannot deny the fact that the longer someone is out of a job, the harder it is to get back into work. Indeed, the whole premise of welfare to work is based on that fact, and the phrase "long-term unemployed" means being out of a job for more than one year. It therefore seems logical that the longer a person is out of work, the more expensive it will be to get him back into the workforce. Will the contracts reflect that fact? If not, why should a contractor be interested? I am not asking Ministers to break commercial sensitivities here but it would be helpful if the noble Lord could give us some indicative figures because, in essence, my question is: how do Ministers see the contracts working? Amendment 20 is also in this group. Given that paragraphs (c), (d) and (e) of new Section 17B(1) relate, as I said just now, to money, I am surprised that the Public Bill Office allowed me to table this amendment. However, given that it has, I am going to speak to it. My question is simple. We can all readily understand why fees should be payable for the purposes of paragraphs (a) and (b)—the reasons for which I have just discussed—but we on this side of the Grand Committee believe that the provision for facilities in paragraph (a) should not include physical entities such as buildings, offices and so on. Therefore, why should grants or loans, to say nothing of the wonderful word "otherwise", which also appears, be appropriate in this context? After all, the grants or loans are open-ended. They could, for example, cover not only offices but the setting up of a totally new entity. I assume that this would cover either contractors or their third-sector sub-contractors. It has been a long-held policy of my party that the core funding of charities is a no-no and that this should be sought by other means, such as private fundraising, private legacies and so on. The proper use of taxpayers’ money is to commission the third sector to use their good offices, which by definition already exist, to do something that the Government of the day cannot do either as well or as cheaply themselves. An example in the health service, which I was involved in for many years in the past, would be the Stroke Association, of which I was chairman, being paid—that is, the Stroke Association, not me—by primary care trusts to provide speech therapy services for aphasic sufferers. In the context of this Bill, that might mean drop-in or day-care facilities for drug users, for example. Both are fee-based services. What, then, are grants, loans or otherwise to be used for? Why, in essence, do we find them in new Section 17B(1)(a)? I was going to leave it at that until my attention was drawn to an article in the Financial Times of about a fortnight ago which said that there was already a preferred list of bidders for these various contracts. However, on investigation in another place, I discovered that this had never been announced through government sources. Therefore, I should very much like to know what is going on. I can show the Minister the article if he wishes. It also raises other questions, such as what is almost the contradiction of the £20 million for the pilot schemes that he talked about on Tuesday and the £2 billion to which the article refers. It may of course be a misprint; I simply do not know. However, I do know that the department is slightly ahead of the news that it has released publicly. I beg to move.