Minister insists she is not privatising local employment services in request for tenders

Minister for Social Protection Heather Humphreys has rejected claims she is privatising local employment services in a new tender process for contractors to help jobless individuals get work.

Ms Humphreys also said she wanted to “allay concerns” that under the new system a person who does not meet certain targets in getting a job might have their social welfare payments cut.

She insisted that “the focus here is on the client, the unemployed person. That is the number-one priority.”

The Minister was responding to Sinn Féin social protection spokeswoman Claire Kerrane and Labour spokesman Sean Sherlock, who raised concerns that the Minister was moving from a not-for-profit model to a payment by results model with contractors providing employment services.

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During Dáil question time they challenged the Minister about a request for tenders she issued in May to expand employment services across seven counties in the north-west and midlands, where a local employment service does not currently exist.

Enterprises helping unemployed individuals find work include job clubs, local employment services and contracted employment services.

Ms Humphreys said that most of the contracts for local employment have been in place since the 1990s “and have simply been rolled over on an annual basis”.

She said she was obliged for “good governance and public procurement rules” to put the services out for tender.

Enterprises helping unemployed individuals find work and contracted to the departments include job clubs, local employment services and contracted employment services.

Ms Humphreys said that most of the contracts for local employment have been in place since the 1990s “and have simply been rolled over on an annual basis”.

She said she was obliged for “good governance and public procurement rules” to put the contracts out for tender. Ms Humphreys insisted that “it is wrong to look at this tender as a move away from a not-for -profit model to a payment-by -result model.

“It’s absolutely client-focused,” she said, adding that 90 per cent of fees are based on client service rather than outcomes.

On referral the local employment service will get 45 per cent of the payment up-front and when the client signs up to a plan, the service gets another 45 per cent.

An additional 10 per cent payment will be made only when a job is secured.

Ms Kerrane said €93 million was paid in referral fees to private contractors under the controversial Jobpath scheme. “And just for getting a person to sign on a payment of €311 was made”, she said.

The €93 million was a huge amount of money and “today 24,000 people have maintained a job for over a year out of 300,000 who were referred. It hasn’t worked,” Ms Kerrane insisted.

Mr Sherlock said a person working in the system for over 25 years raised concerns with him that if a client of the service “does not reach a certain metric” such as the getting a part-time or full-time job, “a punitive economic measure or sanction could be levied” such as a cut in social welfare payments or other services.

But the Minister said “the client is number one in all of this”. She added that there had been extensive consultations with every single provider in the process.

Department officials had given a lot of explanation and none of the potential providers should need to employ a consultant to prepare their tender because they have all been so well-informed.

The Minister stressed that “we’re looking at quality of service, local service”.

She added: “I have to put this out for tender” but “we have put a strong focus on the connections with the local community providers and there is no reason why they can’t continue to be successful”.