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Controversial plans to contract out employment services to the private sector will cut unemployment and could save the taxpayer about £1 billion a year, an influential policy report has concluded.
After studying private and voluntary welfare schemes in Australia, the United States, Germany, Denmark and the Netherlands, the Policy Exchange think-tank has endorsed proposals from David Freud, a former investment banker, to open the services and predicts substantial benefit savings.
The Freud proposals have been embraced by James Purnell, the Blairite Work and Pensions Secretary. But the Policy Exchange report, which is co-edited by Peter Lilley, a former Tory Social Security Secretary, may cause alarm among Labour MPs about the scale of changes to incapacity benefit being planned and worries among unions about the “privatisation” of the service.

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It needs something doing about welfare, however will these fats who will run it they are certain to get fatter.
Geoffrey Fish, Pontefract, UK
Well, nothing could be more inefficient that having the Civil Service run it....
Peter, London,
The whole system of benefits & welfare is out of control. People are rewarded for being deceitful or irresponsible. When the 2nd world war finished the welfare state was needed, to get people back on their feet, but now that era has past. Just about three-quarters of everyone in this country is in receipt of some sort of benefits or another. Look at the NHS, indigenous residents & foreigners take advantage of its services, regardless that they have paid nothing towards it, then when the tax paying public need to use the NHS theyâre told of waiting lists & no funding left. Then theres housing benefit, child benefits, the list goes on & on. The best thing is to scrap the welfare state & pay as you go. The services wouldnât be at bursting point then, as people would only use them if they really needed them as they would have to pay. This country may not then be so attractive to all the wasters as well as the foreigners coming here to take advantage of our lax benefits & welfare systems
michael pickles, bournemouth, england