Foreign charities may join bidding

Charities might have to compete with foreign voluntary and private sector organisations to run employment and welfare services in the UK.

In his review of the market for the Department for Work and Pensions, investment banker David Freud has recommended contracts big enough "to attract major players from around the world". He wants to create 11 contracts - one in each of England's nine regions and one each in Scotland and Wales - for which voluntary, private and state providers could bid.

"The contracts should be designed in a way that encourages the prime contractor to work with a series of subcontractors specialising in different parts of the client group," Freud said in the review, published on Monday.

In his plan, Jobcentre Plus would continue to deal with welfare claimants for a certain period of time before voluntary and private sector organisations took over on long-term, outcome-based contracts (Third Sector, 21 February).

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