THE DEPARTMENT of Social Protection is pursuing radical new plans to hire outside companies to identify training and job initiatives for Ireland’s growing numbers of long-term unemployed people.

Leaked European Commission documents seen by TheJournal.ie reveal that the government is finalising a tendering procedure to set up links with private companies who will be tasked with finding “labour activation measures” for some who have been out of work for extended periods.

The Department hopes to roll out the scheme by the end of October 2013 at the earliest, a process which representatives from Brussels says needs to be sped up as much as possible.

The moves follow sustained Troika criticism of Ireland’s welfare system, with previous European Commission reports criticising Ireland’s “broadly flat and open-ended unemployment benefits” which remain static irrespective of how long someone has been claiming them.

Though the Irish government has introduced some measures which see jobseekers lose their benefits if they turn down offers of work or training – with 1,275 jobseekers losing their benefits in the first four months – the Troika lenders are fearful that not enough is being done.

Individual profiling of Dole claimants “offers more tailored support and is an essential component of the labour activation policy”, the leaked report states, before adding that it is “crucial” to have long-term claimants engaged in labour activation as soon as possible.

Otherwise, it says, there is a risk that the long-term unemployed face an “increasing risk of complete marginalisation from the labour market” – at the same time as depleting resources within the government make it harder to continue profiling.

Contractors will be paid only if successful

It is proposed that the private companies signed up for the scheme will be paid on a ‘payment-by-results contractor model’, meaning there is no cost to public funds if the initiative does not result in any long-term jobseekers being taken off the Live Register.

Though the government expects the process to be potentially up and running by October, the Troika fears that this may not be quick enough to stop the gap between employers’ needs and the skills held by jobseekers from becoming “entrenched” and permanent irrevocable.

This would mean that “human capital is forsaken”, the report says, arguing that similar private-sector measures have worked well in other EU countries and would “usefully complement” the services being supplied by Intreo, the government’s new combined welfare and training service.

“In order to ensure optimal outcomes, the procurement process will need to be as competitive as possible,” the leaked document says. “The performance of providers should be monitored in the future, with the low-performing ones eliminated from the market.”

The most recent Live Register figures, for December 2012, show that 187,144 people were classified as ‘long-term’ claimants and had been signing on for 12 months or more.

That number represented 44.2 per cent of all people signing on at the end of last year, up from 41.6 per cent at the end of 2011, when the overall numbers on the Live Register were about 12,000 higher.

In full: More of TheJournal.ie‘s coverage on the leaked European documents >