Flexible New Deal contracts at risk of being cancelled

By Sarah Townsend Friday, 11 June 2010

Existing contracts to deliver the flagship Flexible New Deal welfare-to-work scheme are at risk of being cancelled after the employment minister announced that all existing jobs programmes will be terminated by summer 2011 to make way for the coalition government's single Work Programme.

In a statement yesterday, Chris Grayling said: "We are determined to move quickly and are aiming to have the Work Programme in place nationally by the summer of 2011.

"Once the Work Programme is implemented it will supersede much of the complicated raft of national programmes currently on offer and these will be phased out.

He added: "The support currently provided by programmes such as the Flexible New Deal (FND) will be folded into the Work Programme as soon as possible."

The coalition government has previously said it intends to roll out the programme by early 2011, a Department for Work and Pensions spokesman said. He also confirmed that existing programmes would not be terminated until the new programme is in place, to ensure that there is no gap in welfare-to-work provision.

However, because the first phase of the FND programme was intended to last for five years, existing contracts are at risk of being terminated. The Government has this week written to all relevant service providers to begin one-to-one discussions over what the changes will mean for them.

Rob Murdoch, chair of the Employment Related Services Association (ERSA), said: "We welcome the Government's recognition [in private discussions with the ERSA] that, should contracts be terminated, a full year's notice is necessary to ensure a smooth transition and stability within the sector, in the best interests of jobseekers and long-term value to the taxpayer."

He added: "Introducing the Work Programme next year allows adequate time to put the new scheme in place and manage the transition."

In the statement, Grayling also confirmed a number of details around how the programme would work. He said: "The Work Programme will be a single integrated package of support providing personalised help for everyone who finds themselves out of work.

"We will offer stronger incentives for providers to work with the harder-to-help, paying providers [on a payment-by-results] basis."

He also said that he recognised the "crucial role that the voluntary sector in particular has to play in tackling worklessness, and our plans reflect this".

Geraldine Blake, chief executive of Community Links, said: "We look forward to hearing more details of exactly how smaller, specialist, and successful charity providers like ourselves will be involved in the design and rollout of the Work Programme. We urge government to ensure that the contracts and funding model recognises the important contribution the third sector can make - particularly in supporting the hardest-to-reach - but also the challenges faced by such organisations."

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