John Penrose

Conservative Party | Weston-super-Mare

Works & pensions

John Penrose (Weston-super-Mare) (Con): What assessment he has made of the implications for his Department’s budget of the recommendations of the Freud report on welfare to work. [126359]

The Secretary of State for Work and Pensions (Mr. John Hutton): The Government have welcomed the publication of the Freud report and are giving careful consideration to its recommendations and their financial implications. We hope to respond more fully later this year.

John Penrose: I think that I thank the Minister for that reply, but could he please give us a bit more detail, particularly on his quantification of the risks that one or more of the prime contractors will fail to deliver what they are supposed to achieve? Does he agree that two substantive risks need to be both quantified and managed? First, the prime contractors may fail to engage with one or more important groups of vulnerable jobseekers in their area because they will have a regional monopoly. Secondly, as commissioning bodies, they may fail to develop the capacity of the local voluntary and third sector organisations that will deliver the services on the ground.

Mr. Hutton: I agree with the hon. Gentleman about the risks involved in proceeding along the lines that David Freud has recommended, which is why we have not yet made any final decisions. The hon. Gentleman mentioned a number of those risks, and rightly so. It is worth reminding ourselves that, although David Freud proposed a network of regional monopolies, as the hon. Gentleman suggested, he felt that there could be some circumstances in which we should not proceed along those lines. Although tremendously exciting opportunities are opened up by Freud’s report to target more effective help and support on those who are hardest to reach and have proved to be the most difficult to get into employment, it is right that we look carefully at his recommendations. Obviously, we need to do some more modelling with the Treasury, but I am confident that we can find a way forward. David Freud was right also to suggest that the most sensible thing to do, if we can model the proposals and manage the risk carefully, would be to test the proposals in a number of pilots, and I think that is the right way to proceed.