Whitehall Could Put 'scroungers' to Work

Are ministers failing to harness the resources of their multi billion pound procurement program - from school and hospital building to the great Olympics "spendathon" - to steer the unemployed into work? The question should be urgently asked as the government raises the stakes in the verbal battle against people they perceive to be welfare scroungers.

At the crudest political level, of course, it is all about appearing tougher than the Tories - witness housing minister Caroline Flint's assault on workless council tenants, and the harder line against the young unemployed from the work and pensions secretary, James Purnell.

From October next year, Purnell insists, an estimated 25,000 18-year-olds not in employment, education and training will have to take part in work-related activities for at least four weeks if they want to receive job seeker's allowance. "If you can work, you should work, and that will be a condition of getting benefits," the minister recently said. "There are a small number who are determined not to work. Avoiding work is not an option."

But what kind of work? Dead-end training programs, or schemes developed by private contractors might offer short-term fixes. But will they make the vital link between the pool of unemployed people, who often live in the more challenging parts of Britain, and the available jobs on the doorstep at, say, the proposed new hospital, secondary school, public housing project or estate regeneration scheme?

Around the country, a few ambitious councils, progressive developers and public agencies are developing programs to find work for the jobless by writing specific "community benefit clauses" into contracts - guaranteeing, for instance, that 10% of jobs in a building project must go to the long-term unemployed, new entrants to the labor market, and those needing vocational training.

According to the two leading experts in this field, lawyer Mark Cook, from the Birmingham-based Anthony Collins Solicitors, and regeneration consultant Richard Macfarlane, many job opportunities are being squandered because the government is failing to exploit the benefit of these clauses. "As a country, we are certainly missing a trick or two," Cook says.

Despairingly, Macfarlane adds: "Government departments providing schools do not think apprenticeships for school kids is anything to do with them." On the surface, this seems like indifference on a huge scale to the plight of the young unemployed. The £45bn Building Schools for the Future program is probably the most ambitious exercise in school construction since Victorian times. Add to that the estimated £11.5bn spent on the NHS since 1997, plus the £12bn allocated to the 2012 Olympics, and you get a measure of the opportunities available.

Who knows, maybe Purnell and Flint have made the connections already? But according to Macfarlane, the Office of Government Commerce is still "arguing the principles" of community benefit clauses. In truth, government departments and agencies have shied away because, wrongly, they have assumed that such clauses could be termed anti-competitive and hence breach EU law. But as we have shown in today's cover feature, it depends on how contracts are written.

Nevertheless, drawing up agreements with developers takes time and effort. Perhaps this is why Whitehall departments and government agencies find it much easier to maintain the status quo, regardless of the social cost.

But there is a ray of hope: on the ground, some councils are proving more receptive to community benefit, with projects emerging around the country. A pity, then, that the biggest schemes, directed by Whitehall, appear out of bounds.

· Peter Hetherington writes on communities and regeneration