A glimpse into the future of outsourced Britain - expensive, inefficient and on its way

The report is damning. The programme, which was implemented by private contractors led by A4e and Reed, "universally failed by considerable margins to meet their contractual targets for helping claimants." The report describes how "private providers’ performance was universally poor in helping claimants to go on the programme. They tended to cherry-pick their clients and still achieved only one-third of the targets for mandatory participants". A4E found work for 15% of participants, wheras Reed found jobs for just 9%.

Moreover, in the areas they covered, "the contractors have performed worse than Jobcentreplus areas". So despite an eye-watering pay cheque, private companies have done a worse job at finding work for claimants than the government body which exists for that purpose and which is currently being subjected to 6,000 job cuts. The companies were so useless that they were unable to turn a profit from the scheme's payment-by-results structure, so the government generously paid them up front to keep them in the game.

Nonetheless, as a result of these cuts to the Department for Work and Pensions, it will be private contractors implementing much of the Coalition's grand restructuring of the benefits system, with the 'big society' becoming little more than a handout for big business less effective at the job than the 'big government' it replaces.

The blundering inability of the private contractors to deliver results is coupled with the brutal means used to prevent new claimants from getting ESA, the replacement for incapacity benefit. ESA claims are subject to a means test, which is incredibly difficult to pass and constructed in such a way as to block claims. Doctors use a piece of software, the ‘Logic Integrated Medical Assessment’ (LiMA), to produce an electronic medical report, based on implications drawn from answers to standard questions. However, the responses are composed using drop-down menus to produce a statement resembling what the claimant says. Due to the limitations of the system, this frequently produces nonsensical statements and draws sweeping implications from these - for example the ability to make a cup of tea is used to demonstrate a wide range of skills.1 . The system is set for wider use as the government rolls out its benefits cuts.

The findings of the report have been barely reported beyond industry papers and veteran investigative magazine Private Eye, which also noted that former Work and Pensions secretary David Blunkett, who heavily promoted the scheme, now earns over £25,000 a year as an 'advisor' to A4E.

• 1http://libcom.org/news/farewell-welfare-23082010