Three Scottish cities are to be targeted in the government's drive to reform the benefits system.
The government hopes to get one million people back to work
Glasgow, Edinburgh and Dundee will be among the first in the UK to take part in the Cities Strategy.
The £5m pilot scheme will enable 13 cities to develop individually tailored plans to tackle local issues which have stopped people getting into work.
In January the government said it aimed to reduce incapacity benefit claimants by one million within a decade.
Under the cities strategy, funding for services like training and skills will be distributed locally.
Cities that have been successful in meeting government targets will be eligible for additional funding.
Work and Pensions Minister John Hutton said the scheme would replace the "one-size-fits-all welfare state" with tailored help for local initiatives.
About one in 10 adults in Scotland receive incapacity benefit, with 60,000 claimants in Glasgow alone.
Critics of the current system have claimed there is little incentive or support to come off the benefit.
Glasgow has already undertaken its own pilot, with benefit payments continuing in some parts of the city while recipients retrain for work.
Jim Murphy, the minister for employment and welfare reform, told BBC Radio Scotland that claimants had too often been "put on the scrapheap and forgotten about".
"There may be a small number of people who want to take the money and not work," he said.
"But all the research shows that when people are asked confidentially if they want to work, they say they do.
"Scotland is the only place in the UK where the number of people on incapacity benefit has fallen over recent years.
"That's to be welcomed but we have to go further."
About one in 10 adults receive incapacity benefit
Steven Purcell, leader of Glasgow City Council, said that up to a third of the city's incapacity claimants were "capable of being in work and wanted to be in employment".
"If we can get the package right, the financial support and the training right, it will have a significant impact on our communities and the city's economy," he said.
Mike Weir MP, work and pensions spokesman for the Scottish National Party, gave the scheme a cautious welcome but warned that sufficient funding was essential for it to succeed.
He said: "The basic idea of providing local schemes to meet local conditions is a good one and I will be very interested to see how these pilots work out.
"In as much as the scheme seeks to overcome the barriers to work, it is welcome but it must be properly funded to tackle the many barriers to work that people on incapacity benefit face.
"I remain concerned, however, that the government continue to see the reduction in incapacity benefits as a cost cutting measure rather than a real attempt to get people back to work."
Jim McColl, chairman of partnership body Glasgow Welfare To Work Forum, said: "We are very pleased that Glasgow has been given City Strategy status and see this as a rubber-stamping of the work we have been doing over the last three years which has already resulted in over 15,000 people coming off benefits and into employment."
Councillor Ian Perry, chairman of Edinburgh's Capital City Partnership, said its involvement was recogniton of the success of the city's Joined up for Jobs strategy, established in 2002.
He said: "We have argued over those years that the key to making big improvements to the services for jobseekers and employers lies in giving greater powers and discretion to local partnerships.
"I am delighted that, partly through our example, this argument has been accepted by the government."