As politicians from both main parties look for a way of easing people off the welfare rolls and back into work, the private and voluntary sector has come to be seen as the magic bullet that will help to overhaul the labour market.

CHOOSING THE RIGHT PATH:

● Pathways is the first serious attempt to tackle the biggest challenge in welfare reform: shifting the 2.6m incapacity benefit claimants into work

● Pilot Pathways schemes, where volunteers are offered support to find jobs, began in 2002. The performance was surprisingly good

● Pathways was rolled out across the country last year, with a mandatory element. So as well as volunteers, people signing on to sickness benefits are forced to see a provider

● This was intended as a first step to other more ambitious schemes, which would cover all sickness benefit claimants who are classified as able to work

● The welfare department is seeking freedom from the Treasury to fund new contracts that pay providers from benefits saved from finding people jobs. But the early Pathways results may make it harder for the providers to raise money to invest in these schemes