The Work Program, Britain's biggest employment program for decades, will also be the first major move into a system of payment by results for the public sector, announced Employment Minister Chris Grayling today.
It will provide tailored support for hundreds of thousands of long term benefit claimants, built around their needs, forming the key part in the Government's drive to tackle long term unemployment and benefit dependency.
Today private and voluntary sector organizations are being invited to tender for contracts to deliver the Work Program. They 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 program will be met from the benefit savings generated by getting the long term unemployed into work.
Chris Grayling said:
"When it starts next year, the Work Program will transform the welfare landscape in Britain. We will provide much better back to work support for hundreds of thousands of people and their families. But in return we will expect them to use that support - and if they refuse they will lose their benefits.
"We have around five million people on out of work benefits in this country - and many of them could and should be working. And yet every time employment levels rise, those people seem to stay stranded on benefits. The Work Program will change all of that."
Crucial to the success of the Work Program will be the work done by smaller local, voluntary and community sector organizations which specialize in working with the hardest to help groups. Major organizations wanting to bid for Work Program 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.
It's also an essential part of the Government's plan to move 1.6 million people off incapacity benefit by 2014. The Work Program will provide back to work support for those who are found fit to work by the Work Capability Assessment.
The Minister for Welfare Reform Lord Freud said:
"We are making great progress with our plans for a new Work Program, which means that from the first half of next year jobseekers will receive the right level of support at the right time, giving them the skills and experience they need to get into work.
"Most importantly our new Work Program will help people who are most in need of our support, such as those who have been out of work for a long time and young people who are struggling to make the transition between education and work - ensuring the best outcomes for customers, and the best value for money for the taxpayer."
The Work Program 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.