Flagship £760m drive to cut sickness benefit bill fails – but Iain Duncan Smith plans similar welfare projects with private firms

From the Daily Mail 13th September 2010

A flagship £760million scheme which paid private sector firms to slash the number of incapacity benefit claimants has failed, MPs warned last night.

“The Commons public accounts committee delivered a devastating verdict on Labour’s Pathways to Work programme, saying the use of private firms had ‘universally failed’.

That is a blow to Tory Work and Pensions Secretary Iain Duncan Smith, whose plans for welfare reform involve using private contractors to get people back into work in a similar way.

The report also provides fresh ammunition for Chancellor George Osborne, who is locked in a bitter battle with Mr Duncan Smith over the cost of welfare reform.

Mr Duncan Smith wants to plough billions into setting up a new ‘Work Programme’ which will see private sector firms offered financial incentives to get the unemployed back into work.

He believes the move will reap long-term savings for the taxpayer despite initial up-front costs. But the Treasury is sceptical that the scheme will work and wants to find other ways to slash the vast benefits bill.

Last week the Chancellor announced, apparently without informing Mr Duncan Smith, that he had identified a further £4billion of savings in the welfare budget.

And yesterday it emerged Mr Osborne has pressed for £2.5billion in cuts to the employment and support allowance – the benefit paid to those judged too sick to work…..”

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