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Profits fall as Pathways mystery deepens

26 July 2007

Following repeated delays, there has still been no official announcement of which private and voluntary sector organisations have been chosen to run the DWP's Pathways to Work scheme to get sick and disabled claimants back into work. However, one private sector company has already announced a fall in profits and suffered another drop in share prices as a result of failing to be chosen.

Carter and Carter, originally a motor industry training company, were shortlisted in all 15 phase 1 Pathways areas. However, on 13 July they announced that they had failed to be selected in any of the areas and would now have to write off the considerable cost of putting in the bids - a process which applicants had to go through for a second time once the DWP realised just how many severely disabled claimants would be passing through the Pathways once the Employment and Support Allowance is introduced. Because of this and other factors, Carter and Carter had to adjust their profit forecasts downwards by £3 million to £10.5 million. In addition, Carter and Carter shares have plummeted in value from a high of over £12 in May to just 55 pence at close of trading on 13 July.