Disability charities criticise Freud

Disability bodies have warned that the contracts proposed in last week's Freud review will turn charities into profit-driven companies.

The Government-backed review by investment banker David Freud proposed outcome-based contracts for voluntary, private and statutory organisations interested in running welfare and employment services on behalf of the state.

But the United Kingdom's Disabled People's Council said the contracts might cause charities running employment services to become more interested in getting "bums on seats" to meet their targets than in helping their beneficiaries.

It fears charities will shepherd disabled people into low-skilled retail jobs to achieve contractual obligations and will be less inclined to give them the support they need to pursue their own employment goals.

"The way the contracts are set up penalises voluntary organisations for supporting disabled people in getting the jobs they want," said Simone Aspis, development officer at the council.

The council has also raised questions about the relationships some disability charities, such as the Shaw Trust, are developing with retailers.

"We know companies such as Tesco are lining up to work with the Shaw Trust and others, and are therefore going to get a whole load of cheap labour," said Aspis.

Disability charity Leonard Cheshire also queried whether the contracts, which could involve charities in decisions to remove incapacity benefits from disabled people, will contravene the charitable objectives of most organisations.

John Knight, head of external policy at Leonard Cheshire, said there was a case for intervention by the Charity Commission.

"I think there could be a role for the commission to issue guidance to charities about what they should be looking out for when entering into these contracts in terms of preserving the integrity of their objectives and brand," he said.

But Ian Charlesworth, chief executive of the Shaw Trust, said Freud's recommendations would provide greater incentives for service providers to find disabled people the right jobs.

"Freud's proposals for phased payments extend over periods of up to three years," he said. "That's much longer than the present New Deal for Disabled People arrangements, which require a claimant to remain in employment for only 13 weeks in order for the provider to claim funding.

"Any provider that attempts to place candidates in jobs without taking into account their strengths, weaknesses and needs is unlikely to offer long-term stability, and will deny themselves those payments."

He added that his charity was proud of its links with businesses such as Tesco.

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