Third sector providers of unemployment services are developing plans for large consortia to become prime contractors for the Work Programme.
The Work Programme, which will replace welfare-to-work schemes such as Pathways to Work and the Flexible New Deal, was announced by work and pensions secretary Iain Duncan Smith in May. It will be run through large regional contracts worth up to £50m a year.
The environmental regeneration charity Groundwork UK, which with the housing association umbrella body the National Housing Federation won contracts to provide several thousand jobs under the Future Jobs Fund, said it hoped roughly to double the size of its existing consortium to bid for Work Programme contracts.
Graham Duxbury, national development director at Groundwork, said the government’s new payment-by-results method added risk to the role of becoming a prime contractor, although it also forced organisations to prove their effectiveness.
"We believe there would be a receptive audience to us and others if we bid, but it’s a big risk," he said.
A spokeswoman for 3SC, the third sector consortium set up to help charities win government contracts, said her organisation was also looking at developing new partnerships to bid for the Work Programme.
She said that a growth in scale might be necessary to mitigate the financial risks and to develop a "joined-up approach" from the third sector.