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Welfare Reform Bill

I am grateful to the Secretary of State and I am encouraged by the fact that he does not intend to hamper the innovation that the private and voluntary sectors can deliver. However, I have talked to private and voluntary sector providers at some length over the past few days. Perhaps he will allow me to set out my concerns and intervene again if he wants to. I would be more than happy if, after the next three or four minutes, I was able to say that he had dealt with all my concerns. The transfer of risk seems a fundamental part of the purpose of engaging the private sector in such a programme. Payment by results was promised, but we understand that a 30 per cent. up-front payment of the fee is now proposed. A payment of 30 per cent. of the fee up front is precisely what creates the resource constraint which is constantly referred to as a reason for not rolling out the programmes more quickly. Why not utilise the private and voluntary sectors’ appetite for risk? Why not roll out the migration of existing claimants and the work-related activity element via private and voluntary sector providers on a genuine no win, no fee basis, with a fee structure that maximises the incentive of the private and voluntary sectors to reach those furthest from being work-ready and that is cash-neutral to the Treasury—paying them only when they have not only placed someone in work but maintained them in work long enough to produce a stream of benefit savings that will cover the fee that they are to be paid?