Move comes as Cabinet Office minister, Oliver Letwin admitted unemployment crisis talks were held before budget
A £5bn back-to-work programme will be unveiled after the Cabinet Office minister, Oliver Letwin, admitted the government had held crisis talks before the budget on unemployment.
The payment by results scheme for companies helping the unemployed to find work has been in preparation for years and will probably be the single most important public service reform implemented by the government in its first two years.
The employment minister, Chris Grayling, will announce the firms that will take on the new contracts, as well as details of how the scheme will work.
It is seen as a blueprint for the way government will deliver public services in the future, including in health and prisons.
Grayling will seek to allay fears that the contracts are only being handed to big private-sector firms such as Serco by saying that many voluntary sector and charitable organisations will be involved in delivering the programme.
The contracts will be worth around £3bn-£5bn over seven years and organisations will be paid using the benefit savings made from getting people into work. Organisations will be paid on a sliding scale, with the largest payments for getting back into work people with serious barriers to employment. The longer they keep someone in work, the more firms will be paid. The highest amount payable will be £14,000 for getting someone caught on incapacity benefits back into work and keeping them there for two years. Other placements will lead to payments starting from £1,000.
Ministers hope that in the first two years more than 1 million people will be supported by the programme, including those who have been on incapacity benefit. A scheme will start nationwide on Monday to test people in such situations. People who refuse to participate in the programme face losing their benefits.
When the contracts were initially put out to tender, the government received more than 170 bids from 30 organisations.
Speaking ahead of the announcement, Grayling said: "There are almost 5 million people across the country who were left untouched on out-of-work benefits. We have to provide them with the right help and support to get back to work."
The announcement comes in the same week that the Office for National Statistics released the latest figures on workless households, which show that there are almost 4 million across the UK.
Letwin told the environment audit committee that there had been crisis talks about the state of growth and unemployment in the country.
He said: "Leading up to the recent budget we took the view collectively in cabinet that we faced an immediate national crisis in the form of less growth and jobs than we needed. And we were determined collectively to try to increase that growth and those jobs."
Liam Byrne, shadow work and pensions secretary, said: "Unemployment has now hit a 17-year high and the benefits bill is soaring by over £12bn.
"This government's failure to get people back to work is now costing families a fortune because it's forcing cuts in tax credits and children's benefits.
"After a budget that put 200,000 more on the dole, this work programme has its work cut out."