Private companies could be paid thousands of taxpayers’ money for each person they take off the dole and place in a job, under radical plans to return people to work.
The Government plans to outsource the placement of unemployed people in jobs with private recruitment companies, a move expected to meet with fierce opposition from trade unions.
Joan Burton, the social protection minister, said, that under the scheme, the incentive is “very strong” for private firms to get people jobs.
Companies could be paid thousands of euro per person placed in work — but only if a job lasts for 18 months or more.
While firms will receive potentially millions of euro from the state, only small amounts will be paid up front and the remainder will follow once savings have been made from taking individuals off the dole.
The measure is part of the Pathways To Work initiative to be launched next week.
The system is based on models in Britain, where companies are paid by the government to get people jobs. A number of British companies are interested in setting up here when the scheme is rolled out.
Over the last decade, a welfare-to-work industry has developed in Britain, largely run by private companies. Firms such as Working Links, which makes millions in profit there, have been examined by Irish officials designing the scheme.
Private companies have already expressed interest in pilots for the scheme, which will begin in the second half of the year.
Under the latest welfare to work system in Britain, called the flexible new deal, providers get £1,500 (€1,800) per person they help to find a permanent job. Of that, 30% is paid up front and the rest is paid by results, when they get an individual in a job that lasts six months or more. Some firms get up to £4,000 per person placed.
Ms Burton discussed the move in a speech last week to the Institute of Chartered Accountants.
“I see a role for the private sector, both in using our services, but also potentially in being a supplier of services to the department. The practice in other countries is that the private sector plays a huge part as a partner and provider of employment, guidance and case management services.
“The market for these services is well-established in the UK, where the model is based on payment by results. In other words, private providers are engaged to help unemployed people find and crucially retain work but only get paid if they are successful in placing each client in sustainable employment.
“Under such arrangements, the incentives for private providers to obtain placements for the unemployed person are very strong.
“We have been meeting some of these market participants and we envisage running a few pilot projects with them,” she said.
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