The government is to announce plans to pay private firms and voluntary groups up to £50,000 to get unemployed people into work.

Work and Pensions Secretary James Purnell will unveil plans later for a "commissioning strategy", that will see more private companies and voluntary groups involved in finding work for people on benefits - following a review by investment banker David Freud.

He will tell a conference he wants to free benefit services from central control and allow them to generate "innovative solutions".

New contractors are expected to be offered incentives for getting people into work for at least six months, with further incentives planned in the future for increasing it to 18 months. In return, they will get larger contracts which last up to seven years - twice as long as usual.

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