Wednesday 23 January 2013

The Work Programme: Still Worse than Useless

The Work Programme is useless. Don't take my word for it, this was the opinion of the Daily Telegraph back in November. Their piece observed that according to the government's own calculation, around five per cent of long-term unemployed people (i.e. those out of work for over a year) would be able to find work if left to their own devices. The government's flagship Work Programme managed a less than stellar rate of 2.3%.

The Work Programme, for readers fortunate enough not to have sustained engagement with the social security system, is supposed to help people who've been out of work for long periods back into the labour market. It replaced Labour's 'New Deal' programme, which introduced an element of compulsion into Jobseekers' Allowance (i.e. either get with the programme, take a job, or get your payments cut). The New Deal wasn't without its problems, but its youth component - New Deal for Young People - managed to find jobs for around 42% of participants between 2001 and 2005. What the pay and prospects of the majority of those jobs were I'll leave for others to determine.

The Work Programme is similar, but "tougher" and is delivered by a number of "providers". These include the usual big beasts who gather around the public sector watering hole, like Serco, G4S, and notorious troughers, A4E. But to make things look good arms-length public sector bodies, like networks of FE colleges, and the 3rd sector can also provide training. These providers are paid by results. They receive payments from monies saved for every period of employment lasting between 13 and 26 weeks, and additional cash on top for every four weeks served.

But that is not all it does. Participation in the Work Programme requires people to basically work for their JSA payments. Readers will recall there was something of an outcry last year when it was revealed large retailers were profiting from taxpayer-provided workers.

I am sure no one has any objection to the availability of retraining for anyone who find themselves out of work. It is also sensible that a guaranteed job is provided after a period of time on the dole. Though it remains to be fully thought through, the principle of Labour's job guarantee is a step in the right direction.

However, the figures for the Work Programme continue to show it is a dismal failure. While Dave was happy to trumpet today's in-work figures (though, of course, studiously avoiding the precarious and part-time nature of many of the new jobs), the performance of their flagship welfare-to-work scheme remains woeful. According to the stats compiled by the Office of National Statistics, between June 2011 and May 2012 (the latest period of time for which a dataset is available), in my constituency of Stoke-on-Trent Central some 1,510 long-term unemployed people were referred to the Work Programme. Of that number, just 30 - two per cent - got a job as a result! It's not that Stokies are no-hopers. Down in more affluent Stone constituency, 10 out of 290 people who went through the scheme got a job. In Dave's Witney constituency, it was 10 out of 330. In wealthy Kensington only 40 out of 1,660 were successful.

If the job market is as buoyant as official figures suggest, then why does the Work Programme's results tail the 'do-nothing' figure - an estimate drawn up to take continued economic turbulence into account? There is only one possible answer: that it is broken, irrevocably. By the Tories' own questionable standards of competence, to produce a programme that is worse than doing nothing is really something.

(Image source)


guthrie said...

I've been handed over to a company in Scotland who are supposed to help me find work. The very first meeting there was talk of one of their members of staff going out and finding jobs and of work that was available.
Now I understand why employment agencies seem to be having problems (Apart from many of them being rubbish of course). This organisation gets given lots of people who could do with work on a plate, has good contacts with business's which need workers and then gets paid more if the worker keeps th job. Sounds like a win all round to me, apart from the fact that it's probably more expensive than the older way of doing it, whatever that was.

And of course the element of compulsion.

Mr X said...

and so we're into year two. Looking at the official government figures for someone on a second year, it's 15% should get jobs. so the target for your constituency is 225 put back into work for it to be as good as doing nothing, and if you take the official scheme target to be considered a success of an extra 10% above, then 248 need to come off benefits.

this is as well assuming some effort isn't being made to massage the figures. I know at least two people who have been signed onto this scheme after getting jobstarts

Anonymous said...

I think it's quite important to name the companies who are making all the money from the Work Programme while delivering dismal results: They are, in effect, benefit cheats. In the case of Stoke , there are two contracts (all regions got two prime contractors) - they are Serco -well known privatisation giants recently involved in screwing up the nuclear weapons plant at Aldermaston (!) and the lesser know ESG, who were owned by Sovereign Capital, a firm founded and directed by Tory donor John Nash - Nash has now left Sovereign...because Michael Gove made him an Education Minister (!) So the crap Work Programme results in Stoke come to you in part thanks to a current Education Minister's firm (!)

Solomon Hughes

Ralph Musgrave said...

The 42% as against 2.3% is a startling comparison, which makes the Work Programme look bad, certainly. On the other hand the New Deal incorporated a commitment by employers to keep subsidised employees on after the subsidy ended. If that commitment was fairly rigorously enforced and backed up by sanctions, that could explain much of the difference.

Also I don’t attach much importance to the percentage of those in subsidised jobs who stay on with the same employer, or who immidiately move to regular employment with another employer. The various factors to look at in judging an employment subsidy are MANY. For example if there are theoretical reasons to think that those who move to regular employment after a subsidy ends are simply displacing others from employment, then the latter percentage is pretty irrelevant.

Other factors to look at: the proportion of those faced with the workfare sanction (“take a subsidised job or lose benefits”) who immediately find regular work. The proportion who when faced with the latter sanction cease claiming benefits because they are claiming for unjustified or fraudulent reasons.

And third: what theoretical reasons are there for thinking a subsidy would improve NAIRU.