CHARITIES and voluntary organisations have severely criticised the Scottish Government the way contracts worth £96 million have been awarded to organisations to help people into work.

The Scottish Council for Voluntary Organisations warned that the schemes will deliver a "second class" service after the majority of funds went to the private sector.

From April 2018 the new Fair Start Scotland service will aim to help at least 38,000 people, to find employment, including those facing barriers to entering the labour market.

However, John Downie, SCVO’s Director of Public Affairs, said: “The Scottish Government promised a brave new world in their vision for employability in Scotland. Their ambitions were that the third sector would be heart and centre of the new employability landscape, but instead charities and voluntary organisations have been side-lined to make way for private companies which lack the local knowledge required.

“The reality of this new employability landscape is that it won’t deliver the best outcomes for unemployed people – particularly those who experience multiple barriers to employment, who will end up receiving a second class public service.

“It’s simply not good enough, and ignores the successful values driven approach of the third sector in providing such vital services across the country.”

Fraser Kelly, Chief Executive of Social Enterprise Scotland added: "We find it hard to understand how, after such a thorough consultation process, the vast majority of contracts have been awarded to big private sector corporations instead of social enterprises and charities."

Employability Minister Jamie Hepburn announced that five-year employment support contracts had been awarded for nine areas across Scotland, including those which help disabled people find work such as Remploy.

Mr Hepburn told MSPs there would be "significant differences" from the UK government employment services, one of the first powers to be devolved to Holyrood under the Scotland Act 2016.

He said: "Our approach is significantly different than previously seen in UK Government programmes. We're putting people at the centre of these services and treating them with dignity.

"We are better reflecting Scotland's geography, regional economies and population spread with nine contract areas rather than simply lumping the whole of Scotland together as one contract package are as has been the case under the UK Government."

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Comment - Martin Sime, chief executive, Scottish Council for Voluntary Organisations (SCVO)

The campaign to devolve employability services to Scotland lasted more than a decade. It was based on the simple proposition that local control would be better, and the Department for Work and Pensions (DWP), which was operating a campaign of sanctions against unemployed people, would be removed from the scene. Responsibility for employability was eventually transferred to the Scottish Government as part of the fallout following the independence referendum.

The announcement today of the successful bidders for Fair Start Scotland - the majority of whom are private companies who will deliver an almost identical approach to the discredited Work Programme - is a disgrace.  It seems that there was a “same team, different jerseys” approach, with many of the officials who created the new Scottish service simply being transferred from the DWP. The result is that there are many specialist and highly experienced Scottish charities and social enterprises which will be left out in the cold, angry and disappointed with these decisions.

This new programme carries a 70 per cent payment-by-results premium which means that the most able, who need the least help, will get the most attention. “Park and Cream” is the trade jargon - park your most difficult customers (mostly with the third sector in return for a pittance, effectively making charities sub-contractors with no decision-making power) and help the cream into the jobs that many would find anyway.  That’s what invariably happens when private profit is involved in the delivery of human services - the need to get a return on investment drives behaviour. This inevitably means that employability support is no longer a proper public service which treats all of its customers equally - those with special needs go to the back of the queue, thereby entrenching inequality.

We ought to learn lessons from across the public service spectrum to better understand what works. Our recently retired Chief Medical Officer discovered that people supported to self-manage their long term conditions did rather better. There is also a growing body of evidence showing self-direction is the way to go. Unfortunately, those charged with designing Scotland’s approach to employability seem not to have been paying attention.

Is it now open season for making private gain from our public services? There are likely many unemployed people simply wondering what this all means for them.  The underlying message seems that there will soon be a service out there which is only interested in helping you if you are likely to get a job quickly.

The key to truly unlocking the issue of employability in Scotland is working towards personalised services at a local level, with the third sector at the heart of it. If some private sector companies undercutting the third sector with services that don’t make real changes to people’s lives can make money out of you, then that seems to be fine with the Scottish Government. It really isn’t ok by me.