[PEN-L:6285] U.S. FIRMS POISED TO RUN BRITAIN'S BENEFITS SYSTEM - The Times (fwd)

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The Times (London)				April 30, 1999

Britain:

U.S. FIRMS POISED TO RUN BENEFITS SYSTEM

	Deloitte Consulting has administered the controversial=20
	Wisconsin Works programme, which has removed five million=20
	claimants from the welfare rolls in the past three years.=20

            By Adam Sherwin

	Tony Blair has approved plans for the biggest privatisation yet=20
by inviting companies to run the =A3110 billion benefit system.=20
	The Government wants people to make a single application for=20
all the benefits they are claiming and to receive one cheque in=20
return. The initiative - called the Single Work-Focused Gateway -=20
will be Labour's key welfare reform proposal at the next general=20
election and is likely to lead to American companies running large=20
swaths of the benefit system.=20
	A restricted document, leaked to The Times, reveals that two=20
American-based companies, Arthur Andersen and Deloitte=20
Consulting, are shortlisted to run four pilot operations which will=20
begin in November and are then expected to go nationwide. In a=20
foreword to the confidential document, Mr Blair dismisses the=20
welfare state as a second-class, failed service and urges private=20
sector companies to help to create a modern system. =20
	The move, which could see many job losses and thousands of=20
civil servants transferred to the private sector, will infuriate the=20
trade unions, alarm Labour backbench MPs and take important=20
areas of responsibility away from local authorities. But a Whitehall=20
source said: "There are always delays with the public sector and we=20
doubt they can deliver a project of this size. We are looking to the=20
private sector to make it happen."=20
	At the moment, claimants must apply to the Employment=20
Service for the jobseeker's allowance, the Benefits Agency for=20
income support and local council offices for council tax benefit. The=20
Government believes this encourages duplication and fraud.=20
	Under the Gateway plan, claimants will be given a personal=20
adviser who will create a package for all their needs. Staff at the=20
various benefits agencies will all work for the private operators and=20
ultimately the Government wants all benefit payments to be rolled=20
into one cheque.=20
	The four pilot projects will be conducted in Leeds, Cheshire,=20
Nottinghamshire and Suffolk, with Deloitte Consulting and Arthur=20
Andersen on all four shortlists.=20
	It is only two years since a Whitehall ban on Andersen bidding=20
for public work was lifted after the Conservative Government sued=20
the firm over its advice on the DeLorean car venture. An auditors'=20
report last year in Canada, where Anderson was contracted to=20
overhaul the Ontario benefit system, claimed that the company=20
charged up to six times more per hour than the previous cost of=20
civil servants.=20
	Deloitte Consulting of Philadelphia specialises in turning round=20
failing businesses and has administered the controversial Wisconsin=20
Works programme, which has removed five million claimants from=20
the welfare rolls in the past three years.=20
	The Prime Minister is understood to be frustrated with the pace=20
of change in the welfare system. He has chaired meetings of a=20
working group on the Gateway project and urged the Employment=20
Minister Andrew Smith to push ahead with the plan.=20
	In a document entitled The Vision: The Single Work-Focused=20
Gateway, distributed to civil servants and potential bidders this=20
month, he wrote: "In the past, the welfare state has too often=20
provided a second-class service. It has failed to do enough to help=20
people into work. We believe that this needs to change. A=20
modernised welfare system should be helping people to become=20
independent, rather than locking them into dependency.=20
	"The New Deal has already made an important start. But we=20
want to go further. We want to move to a streamlined and efficient=20
system in which there is a single point of access to welfare."=20
	A Whitehall source said: "There has been a lot of drift but Blair=20
has finally grasped this issue. They want it up and running by 2001,=20
but realistically it will begin after the next election."=20




--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx