Tony Blair and John Hutton, the work and pensions secretary, announced plans on Monday to push through changes in the welfare system.
These include a bigger role for private companies and the voluntary sector.
Hutton spoke at a conference also addressed by banker David Freud, who has carried out a welfare review for the government.
Freud wants huge sections of the government’s employment services to be handed over to the private and voluntary sector.
His report also focuses on getting disabled people and lone parents off benefits.
Tony Blair is throwing his weight behind the proposals in order to get them under way before he leaves office later this year.