Ministers look to linking work and benefits: Government may extend 'workfare' as measure to cut cost of unemployment

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The Independent Online
MINISTERS are studying revised plans for cutting the pounds 1.8bn annual cost of unemployment by offering incentives to work similar to the system in the United States called workfare.

The ministers are studying changes proposed by Sir Ralph Howell, the Tory MP behind the campaign to introduce workfare in Britain. He criticised a pilot scheme set up in his constituency in North Norfolk offering unemployed people voluntary work for their benefit plus pounds 10.

Peter Lilley, the Secretary of State for Social Security, is considering revised proposals by Sir Ralph as part of a wide- ranging review of workfare and other measures to cut the cost of unemployment.

Workfare was on the agenda at a 'brain-storming' session of social security ministers and advisers last month.

The ministers also discussed measures to combat benefit fraud and to cut the cost of Child Benefit by taxing or means-testing it; other ideas included replacing it with nursery school vouchers. But the ministers came away impressed with the idea of twinning work with benefits for the long-term unemployed.

Sir Ralph, who inspired the Norfolk North pilot scheme, said it proved self-financing and demonstrated that more could be done nationally. But he has urged ministers to offer private-sector employers up to pounds 60-a-head to take on the long- term unemployed, provided they did not displace existing workers.

In the North Norfolk scheme, jobs for 68 unemployed people were provided by the county council, Community Rural Aid and National Association for the Care and Resettlement of Offenders. Extensive interviews were part of the trial. They led to 74 people dropping off the unemployment register and 16 going into full-time work.

Sir Ralph said that more private-sector employers should have been involved in the scheme, which has six months to run. 'The current pilots do not give the private sector sufficient opportunity to match firms and unemployed workers.'

He said paying private-sector firms to take on the unemployed would have a greater impact than the North Norfolk Action scheme, which was public-sector led. Unemployment benefits should be granted only when the job seekers could show that available work was inappropriate.

In a plan put to ministers Sir Ralph said firms should be given pounds 60 a week for one year for each person who had been unemployed for more than six months, and pounds 30 a week for those unemployed for more than three months. Those who refuse to join the programme would be required to give their reasons and interviewed regularly to find work.

(Photograph omitted)