The one thing this Government cannot be accused of is a lack of ambition. After thirteen wasted years, we are determined to get to grips with the deep seated economic issues and the profound social problems that are holding this country back. Our welfare reform plans lie at the heart of both those challenges – and today marks a big move forward in making those plans a reality.
Over the next few years the arrival of the Universal Credit, together with our planned benefit cap and changes to housing benefit, will have a huge impact on the welfare state.
But the first big step down the road to reform will come in the spring and summer of next year. Firstly, we will begin the task of migrating 1.6 million people off incapacity benefit, with the goal of getting as many as possible back into work.
And then next summer we will launch the Work Programme, Britain's biggest employment programme for decades, to provide them with the specialist support that those who are stranded on benefits need to help them get back into work.
The core goal of the Work Programme is to tackle one of the key failings of the past decade. Under Labour employment in the United Kingdom rose by nearly four million. And yet the vast majority of the new jobs created were taken up by people moving into this country from overseas.
Yet through all of those years we had around five million people on out of work benefits in this country – and many of them could and should have been working. It was a huge waste of human talent, and a huge failing for Britain – and that failing came at a vast cost to all of us. We can’t afford to make the same mistake again.
The Work Programme is a key part of tackling that problem – and today marks a key step in its development as we begin the process of picking the final contractors who will carry out the work for us. It also marks the start of a revolution for Government, as the first major move into a system of payment by results for the public sector.
When it starts next year, the Work Programme will transform the welfare landscape in Britain. We will provide much better back to work support for hundreds of thousands of people. But in return we will expect them to use that support – and if they refuse they will lose their benefits.
The last Government went wrong because its programmes were designed in Whitehall to a one size fits all framework. We will do things differently. The Work Programme will provide tailored support for benefit claimants, built around their needs. The private and voluntary sector organisations who are being invited to tender for contracts to deliver the Work Programme will be given the freedom to be innovative and provide the right help for each individual, rather than having to follow a top down approach dictated by government.
In return for this freedom they will be paid by results – to help people find jobs and then to keep them – and they’ll only be paid the bulk of their money when they succeed in doing so.
For the first time there will also be much higher payments to help those groups who are furthest from work. The fees for the hardest to help groups – including people who have spent long periods of time on sickness benefits – will be a maximum of £14,000, making it much more likely than ever before that they will get the help they need to get a job. Much of the cost of the programme will be met from the benefit savings generated by getting the long term unemployed into work.
The Work Programme will be backed up by new benefit conditionality, which will be part of the forthcoming Welfare Reform Bill, which will mean people refusing to take up jobs could face losing their benefits for up to three years.
Crucial to the success of the Work Programme will be the work done by smaller local, voluntary and community sector organisations which specialise in working with the hardest to help groups. Major organisations wanting to bid for Work Programme contracts have been told that they will only succeed if they put together groups of specialists who can deliver the right mix of expertise for the hardest to help.
All of this is part of a historic mission. Britain has a welfare state that discourages work and accentuates long term exclusion and deprivation. Of course we should provide people with financial support when they have to fall back on the state for help. But the quid pro quo should be that everyone who can work should make every effort to do so. Taken together our reforms will break down the culture of incapacity benefit dependency, provide much better back to work support, backed by clear sanctions for those who refuse to use it, and will make sure that work always pays.
Too many people today are stranded on benefits, too many children are being brought up in homes that are entirely dependent on benefits. And the problem is passing from generation to generation. The Work Programme will play a big part in ending all of that.