The Government is set to allow the private sector to become involved in running programmes to find work for the long-term unemployed.
Minister for Social Protection Joan Burton has recommended to a Cabinet subcommittee that a green light be given to external private contractors to provide employment activation services.
The involvement of the private sector has been a long-standing requirement of the troika of international lenders. A number of quarterly reports criticised the Department of Social Protection for not moving quickly enough to make the change.
However, Ms Burton is understood to have been reluctant to introduce such a far-reaching change without ensuring that Ireland did not encounter the problems Britain has had with activation programmes involving the private sector.
Under a scheme of prime minister David Cameron, the Work Programme, 18 contractors were paid €5 billion to find jobs for the long-term unemployed. However, fewer than 5 per cent of clients had found employment after the first year.
Ms Burton engaged the Centre for Economic and Social Inclusion to provide advice on the best commercial model to contract out employment services.
Having received the report, Ms Bruton yesterday recommended to the Cabinet Committee on Pathways to Work that a prior information notice be issued. That is an indication that the Government intends to go ahead with the project.
It is not yet known how big the contracts will be or how many of Ireland’s 180,000 long-term unemployed people will become clients of the new services.
It is believed that if outsourcing goes ahead, the model would involve a “payment by results” approach, meaning the majority of each payment to a contractor would be based on the company finding sustainable employment for an individual.
