The role of contracts and the private sector in delivering Britain's 'employment first' welfare state

In Britain the rise of ‘contractualism’ has led to radical changes in the relationship between the unemployed person and the state and in the organisation of the public Employment Service (ES). In 1986 individual ‘action plans’ were introduced for the long term unemployed and since 1996 all unemployed people have been required to enter a formal Jobseekers Agreement specifying the steps they will take to obtain the types of employment they qualify for. There has been controversy about the fairness of this new relationship and the utility of these ‘agreements’ in creating a more individualised service and in promoting transitions into employment (some of these issues are discussed in the Freedland and King chapter in this collection). This chapter, however, addresses the impact of the other dimension of contractualism. Over the past twenty years successive waves of ‘market testing’, ‘contracting out’ and privatisation have transformed a traditional bureaucracy into a ‘purchaser’ of services that contracts with a diverse ‘mixed economy’ of ‘for profit’ and ‘not for profit’ organisations. This process has intensified under ‘New Labour’ which has used private sector experiments to accelerate and bench mark the combined process of welfare state and public sector reform.