Nick Harvey calls for review of welfare-to-work programme

Tomorrow's Guardian reports that Nick Harvey, the defence minister and Lib Dem MP for North Devon, has written to Chris Grayling calling for an urgent review of the implementation of the government's welfare to work programme.

In the letter, says the paper, Harvey calls for the programme's funding mechanism to be reviewed:

"In low-income rural areas such as Devon which will be the last to pick their way out of the economic crisis, only the locally focused third sector such as Pathfinder can really deliver. 

"I would urge a review of the supply chain and reconsideration of the tail-end funding model."

Interestingly, Harvey seems to have given an interview to the Guardian too:

Harvey told the Guardian that small companies and voluntary groups cannot wait to be paid, unlike large companies such as A4e. 

"The small guys can't possibly carry the risk," Harvey said. "Round here they are usually not-for-profit social enterprises who don't have access to big pools of capital. They need paying as they go because they just haven't got the cash flow to cope otherwise." 

"It is in everybody's interests that the Work Programme should succeed. But they risk undermining the delivery of it if making the payments after the event causes the small frontline providers to go out of business. The prime contractors are chosen on the basis that they are big enough to have access to capital and have a viable business model. They wouldn't be able to deliver it, certainly in rural areas, themselves. So they need the locally based frontline providers and risk driving them out of business if they don't carry this risk instead of passing it onto the small providers."

Note that this is not a condemnation of the aims of the programme, but an expression of concern about whether it can be implemented in the way the government currently envisages.

My own view is that the Conservatives are dazzled by the private sector. They expect people like A4e to find the long-term unemployed jobs without having any clear idea how, at a time when the economy is so depressed, they will do it.

While, as we have learnt from the public sector during the Blair years, the emphasis on reaching targets just encourages gaming. That is what is behind reports like the one in the Independent this morning.