By Claire West

New contracts announced recently to run the government's back to work scheme will add hundreds more to the unemployment figures as at least one provider has already issued redundancy notices.

Working Links, one of the successful contractors of the new work programme, is from today sending redundancy letters to almost 600 of its 2,000 workforce, with the threat that more could follow if staff numbers for the new contracts are lower than existing levels.

The company is part funded by the Department for Work and Pensions and has won bids to run the scheme in Scotland, Wales and south-west England.

The union fears similar redundancies from other providers as they prepare for running the work programme from June 2011. Employers, who will be paid billions of pounds in taxpayers’ money to operate the contracts, are only offering statutory minimum redundancy pay and have failed to operate any redundancy avoidance measures.

Work and pensions minister Chris Grayling has said redundancies are premature, and urged providers to look at redeploying staff - although he has refused to take on staff delivering services for people who are disabled and on long-term sickness when his department resumes responsibility for this work at the end of April.

The announcement comes days after the DWP announced it was cutting more than 5,000 jobs from its corporate offices in Sheffield, Leeds and London, as part of wider cuts across the department including from jobcentres.

PCS general secretary Mark Serwotka said: “It is a bitter irony and a scandal that hundreds of jobs are being threatened by a scheme that is supposedly designed to get people back into work.

“This shows that this is not about investing in jobs and our economy, it is about cold, calculated privatisation to allow companies to make their fortunes off the backs of the unemployed and the most vulnerable in our society.”