Archives For welfare-to-work

In a new feature on RealFare we will be exploring ‘The Alts,’ or the alternatives, that are happening all over the UK and the world. Politicians would like you to think they have no other choice when making cuts or harmful policies, and there is a media campaign that supports that. But, if we step outside this tunnel vision of how things are, we may find the choices made are not always so unavoidable. In the first piece, we talk about Germany and attitudes towards civil liberties….

The coalition have garnered an environment and an attitude that completely blindsides the elements of life that are immeasurable and intrinsic to living. The political and media campaign to blacken the names and lives of an ever extending group of people at the bottom of the social ladder for not working, or not working enough, is, without hyperbole, enslaving us under the Prime Minister’s guise of a ‘moral mission.’

The suggestion of the political line is that only those in work are ‘good.’ Only the “hardworking” or “in work” can feel any sense of moral high-ground. Suspicion is instilled against anyone who can’t or is not in work, however unable they are, and indeed, at the cost of however damaging this rhetoric has been to people’s lives.

Worryingly, the rhetoric goes much deeper as it becomes ever more surgically removed the notion of remuneration. The Conservative Party tagline insists they are “for hardworking people” (apparently). But not “hardworking people who earn a hardworking wage.” Politicians want to “get people into work” but not “get people into work with fair pay” or it seems, even any pay. Instead, further barriers are put up – entry level jobs now ask for work experience and workfare programmes provide a turnstile of free staff to large companies.

Twitter: @andymlockhart Friend took a photo of this at Rochdale Jobcentre Plus

Twitter: @andymlockhart Friend took a photo of this at Rochdale Jobcentre Plus

Somehow, debating the economy and jobs market has ironically become a debate without talk of money, or the exchange of labour for money. It asks that we offer up our labour for the sense of being ‘hardworking,’ as opposed to the sense of a pay packet. A burden is put on the unemployed to take anything they can, but no burden on companies to pay them.

How can this lead to a recovery?

But like the lie that if repeated enough is believed, we all further distance ourselves from the treatment of others by silently agreeing and legitimising the abuse of desperation and workers during ‘hard times’ in order to increase profit. Working for free/low pay/no pay, and seeking punishment for those not in work, sees us sleep walking into modern slavery as we forever work longer, for less and lower our expectations, demands and voices.

We have been made to feel snobbish for asking for better than a minimum wage job, or in some cases a job that pays us at all. We should be asking, why are people working to remain in poverty? Why are people being made to work for free instead of being paid? Why is paying people a wage they can live on seen as a radical concept and not a value that should be placed at the heart, in the very foundations, of an economy in our ‘developed’ world?

Image: Prosebeforehos by Nick Anderson

Image: Prosebeforehos by Nick Anderson

Poverty out-of-work jobseeker benefits are seen as luxuries, as are decent holidays, or time with your family. We are silenced from asking for a life outside our worth to an economy, which for our efforts then immediately turns on us with suspicion, should we fall off it’s troubled, corrupt and risky, state-subsidised, profit-privatised railtrack.

This is why we need to talk about Germany. And other alternatives. Because in an environment obsessed with usurping our values with profit, we need to regain the strength, importance and understanding of the ‘immeasurables’. We are told time and time again, parties have no choice but to make these “tough decisions,” but there is a world of alternatives for us to learn from if we step outside the rigid and well-rehearsed campaign happening here. Of course, everything comes it’s own pluses and minuses and there is always room for improvement. But would the decision to treble tuition fees seem so inevitable if we debated how Scotland has kept it’s education free? Or how Denmark not only offers free higher education but has grants available to all students?

Image: Oxford Essays

Image: Oxford Essays

The governing powers have worked well to instil us with an amnesia and incongruence of civil liberties. As workplaces and large corporations play out their race to the bottom of our working conditions, we are expected to follow complacently, believing the faceless, bigger than us ‘we,’ cannot afford to grant us the means to scrape by for our daily work. The guise of living in the ‘free world’ and ‘democracy’ conjures up a belief that those in power will look after our best interests, and thus our hardships must be for good reason, while simultaneously we are sold free work as a gateway to progress.

We are often compared to countries in a way that insists we need more work and discipline. South Korea comes top in education, so ignore the high rates of student suicide and migration, this must mean we need longer hours for children. Michael Gove wants to make public schools like private schools, with longer hours. Again, surgically bereft of talk of investment despite poverty being the main aggregator of a child’s ability to learn and do well. But we don’t talk about Sweden where there is a 99% literacy rate and free higher education for all students from the EU?

And we are rarely compared to Germany. Yet, it has plenty of good ‘measurables’ – measurables being the things government like to talk about – economy, numbers, workers, profit etc. Let’s mention what Germany has on it’s side in terms of these. Though before I do, I must say that these are examples of some strengths in another country and present potential debate or call for alternatives. They are not all perfect, and Germany still has a lot of room for improvement, but there are clearly things we could learn from.

Measurables

A strong economy which single-handedly save the Euro from a double dip recession

Germany has a strong manufacturing export and this, along with strong economic activity, saved the Eurozone from a double dip recession in 2011. Germany has continued to remain one of the biggest economic forces in the EU since then, and were we to discuss these strengths in the same way the Conservatives discussed South Korean education we would be debating how to create more manufacturing opportunities in our service-heavy country, and also how to increase economic activity.

Most economic activity is created by those with least money, as they spend their money on the essentials they need. However, benefit cuts, wage pressures and rising inflation and living costs has left the worst off even worse off, stagnating what economic activity and growth there could be here.

An abundant banking sector which spreads power and risk…

Germany has three types of banks – savings banks, co-operatives and private banks. All the money is not held by a handful of huge global banks as in the UK. Smaller banks make up a large portion of the sector which spreads the money of the country and allows less room for risk. Indeed, through the recession non-private banks remained strong:

“Two of the pillars—the 423 savings banks and 1,116 co-operative banks—have come through the crisis with barely a scratch so far. Each of these sectors already has a system of joint and several liability, which means that no individual member bank is allowed to go bust. Neither wants to become part of a wider European banking union, in which guarantees extend to weak peripheral banks.

They argue that their business model, working for the public or mutual good rather than for shareholders, is well suited to the mixture of households and small companies (known as the Mittelstand) that they serve.”

The Economist

The smaller banks have seen their problems, but the private sector has been far more misfortunate and risky. The strength and guarantees that smaller banks can provide should surely be a talking point following the global recession and it’s legacy of austerity here.

Image: Metrosafe

Image: Metrosafe

The subject was touched on by the Channel 4 programme “Bank of Dave” where millionaire Dave Fishwick embarks on a mission to create a community bank better than the high street. The programme sees him come up against the Financial Standards Authority who seemed reluctant to grant Dave a licence, seeming to take the line that he should “leave it to the other banks” as it is being dealt with already.

All this despite Dave’s community bank being more reliable and risk averse than any of our huge conglomerates. This demonstrates an unwillingness and a barrier in bureaucracy and government to provide alternatives when the current system is clearly hugely problematic for customers.

Could it be that the government don’t want to offer us alternatives…….

Where Measurables meet Immeasurables

Productivity and Work/Life Balance

Germans work on average around 1413 hours a year – one of the lowest rates in the OECD, and much lower than the average 1776 in other EU countries. This averages out at just under 30 hours a week.

Despite this, Germans are still more productive per head, per hour compared to the UK who work much longer hours (an average of 43 per week).

Germans also have an average of 40 days holiday a year including bank holidays. This is much higher than the European average of 27, and accounts for an extra 2.5 weeks worth of time off.

There are still some problems with the gender pay gap in Germany with women taking home 25% less in many cases. Still, the % of women in German government is 35% compared to the UK’s 22%.

The UK has long been recognised as one of the most overworked countries in Europe, but searching for work/life balance, even with the prospect of healthier productivity, doesn’t seem high on the government’s agenda. Maybe this is why we rarely see discussion of these comparisons or debates on the UK working week, despite us being more prone to work-related illnesses. In fact, politicians and media go as far as to trivialise and ignite suspicion about these illnesses to ensure, once again, we are working at any cost to our bank balance and our health.

Again, it doesn’t seem to fit with the current agenda of government’s attitude towards work. In a country hellbent on workfare programmes and low pay/no pay -talk of the work/life balance can only disrupt things.

Attitudes towards civil liberties

Germany and it’s government maintain respect and fierce protection of their civil liberties. This is largely linked to the Second World War, which has meant the country is careful with the power it provides it’s government. But it should serve as a lesson for the rest of us too, because the protection of their civil liberties is a systematic and logical culture born out of understanding of what can happen when governments hold too much power.

Take for instance the recent revelations about GCHQ and NSA and American surveillance of “allies.” German chancellor, Angela Merkel spoke out about the effects and infringement of American tactics on both her and her public.

“Mass surveillance sends the wrong signal to “billions of people living in undemocratic states,” Merkel claimed.

“Actions in which the ends justify the means, in which everything that is technically possible is done, violate trust, they sow distrust. The end result is not more security but less,” she added.”

PolicyMic

On a BBC report I witnessed, the attitudes towards spying were discussed from the point of view of several different nations. In this reporter’s package, it mentioned that the Germans didn’t like the idea of spying because it had been used to control and manipulate the population during Nazi Germany. However, when the report moved onto the UK’s attitude towards spying, it was shown as a glamorous business and suggested that Brits thought of James Bond when they thought of spying, and thus it’s aspirational, cool and nothing to worry about.

Image:  The Guardian

Image: The Guardian

In some cruel, post ironic twist, that BBC report talked briefly about how one country had learned to resist the infringement of government on human rights through history, and yet in the next breath provided the propaganda to ease through our own surveillance.

Why aren’t we learning from the huge tragedies of Nazi Germany too? Why aren’t we taking lessons from the place where spying and the seizure of civil liberties forewarns us of a dark world?

What money cannot buy…

The focus of our government on work and profit is an attempt to erode the worth of all our other liberties, and to keep us too busy and demoralised to get them back. Whilst at the same time dismantling and hollowing industries of the presence of much else but cold, soul-less, profit decisions. Last year, the respected journal, The Lancet published a report attacking the government for treating our NHS in very much this way:

“Reading headlines last week, such as ‘Struggling A&E units to get £500m bailout’ and ‘NHS managers to get price comparison website’, one might be forgiven for thinking that the current coalition government views the NHS as a failing bank or business,”

This stance is one of the most cynical, and at the same time cunning, ways by which the government abdicates all responsibilities for running a healthcare system that has patient care and safety at its heart.”

The journal, which has been publishing on medical matters for almost 200 years, said the coalition’s NHS reforms meant the health secretary “no longer has a duty to provide comprehensive health services”, having handed over responsibility to a “complex system of organisations”.

We can’t provide care in an environment where the only language is money, profit and work. Workers’ rights, healthcare and education are just some of things that stand to suffer (some already are), with this sort of strategy.

Further, this ‘economic plan’ is not working. Threats, punishment and public shaming have still seen work programmes fail for over 90% of people – who have not found work after 12 months of being enrolled. This is neither efficient, cost-effective or dignified.

Do we need a tragedy to remind us how important our freedoms, protections and liberties are? Because it would much easier to learn from another’s history, and their actions and attitudes towards freedoms now. And with a government so enthused to do away with our human rights, now would be the time to take ownership of what is immeasurably important to our lives.

by Kam Sandhu @KamBass

Advertisements

Despite an outward stress on the necessity of work, the coalition government have helped to garner an employment landscape of insecurity, poverty and low worth. Welfare policy and employment laws changed over the last two years have been crucial in creating a power imbalance in favour of employers, ultimately damaging employee worth, status and work life.

At the beginning of this year, David Cameron announced plans to make it easier for employers to fire workers. By increasing the length of service from one year to two before a hearing can be called following dismissal, and by reducing the sick pay, redundancy pay and compensation amounts employees can claim for, Cameron said that these relaxations in employment laws would make companies see less risk in hiring more people, and this would also ‘get rid of the bad’ to let in the skilled employees.

David-Cameron1

However, allowing employers to fire employees more easily by cutting red tape does not solve the problem of a lack of jobs. Further, the report that David Cameron commissioned from Adrian Beecroft in support of law relaxation was admittedly based on a ‘hunch’ rather than economic proof or explanation:

“Quantifying the loss of jobs arising from the burden of regulation, and the economic value of those jobs, is an impossible task…How many more businesses would there be, how many people would they employ, how many more people would existing businesses employ, how profitable would all these businesses be? Who knows?”

Yet, Cameron pressed to apply these measures, insisting that America had relaxed it’s laws and seen a drop in unemployment. But, while the US remained relatively stagnant in it’s position, Germany halved it’s unemployment figures whilst maintaining much stronger laws and regulations for employers.

Whilst Cameron was forced to retreat on these plans by deputy Prime Minister Nick Clegg, the subject has surfaced again a few times, with support from Vince Cable and some Tory Ministers. Still, changes to laws like this during a fragile recovery will only cause anxiety for workers who feel the threat of losing their jobs on top of the hardship of the current climate. It also assumes the employer acts in employee interests which has been disproven time and time again, says lawyer Edward Cooper:

“An underlying assumption in these proposals is that employers all act reasonably. We see day in and day out that employers do not always act reasonably, especially when there is money to be saved.”

Edward Cooper, Channel 4, 2012

Despite these proposals being put on the back burner, changes to employment tribunal fees were passed in July this year, meaning that employees seeking justice, investigation, hearing or tribunal would now have to pay to have their case heard. Again, at a time of fragility for the market, this put employees on the back foot should they be treated unfairly by their employer.

Under the new rules, it would cost £160-250 to lodge a claim and a further £230-950 if the claim goes to court, which is usually the case with claims such as unfair dismissal or discrimination. The Ministry of Justice also charge £1200 for a full hearing if people want to challenge the decision of an employment tribunal.

Government have said that these fees were brought in to encourage ‘mediation’ and negotiation without the Courts, in the hope more cases could be settled outside the legal system.

However, these fees are attacks on the employee’s rights alone, and only make it harder for employees to fight companies who often already have the upper hand. The fees give companies more leeway to treat employees unfairly, in the hope they cannot afford to bring them to justice. For some grievances, the cost is more than the money an employee feels they are owed, but could count highly as a case for morality or discrimination and be important in ensuring a company is reprimanded for treating someone unfairly.

Despite the fees now existing, trade union Unison has won the right to take the case to judicial review, in the hope the fees will be lifted. Unison, with the support of the Human Rights Commission, argue that the fees make it impossible for workers to exercise their rights. The Ministry of Justice have vowed to refund all fees should Unison win the case.

Dave Prentis, Unison General Secretary said the fees “give the green light to unscrupulous employers to ride roughshod over already basic workers’ rights.”

The hearing continues.

As well as these changes to laws, the government have implemented their own damaging schemes, which are currently taking their toll on the employment market. Welfare-to-work schemes which incorporate workfare policies are forcibly sending unemployed people to work for 30-60 hours a week for their unemployment benefit or they risk sanctions or withdrawal of benefits.

Minster for Work and Pensions, Iain Duncan Smith insisted these policies were designed to allow people to gain work experience to secure future employment. However, the schemes have just widened the already burgeoning ‘work experience’ and ‘intern’ industry which already operates cruelly in the fashion, media and music world and employs an entire workforce of free labour for the same, often unlikely, chance of employment at the end.

Whilst gaining months of free work experience was once expected if you wanted to get into a much sought after industry, now workfare policies insist they are required for minimum wage jobs stacking shelves. As the interns of the music and media industries are trying to gather to gain some rights and protection against being exploited by companies and employers, the welfare-to-work programmes are normalising work experience for the low paid.  Entry level jobs are beginning to carry work experience criteria, and the free workforce donated by the government rotates to feed a steady supply of workers to companies. This sort of policy replaces paid jobs with free labour. It devalues work and treats workers as commodities. It creates higher barriers to work by insisting on months of free work for minimum wage jobs.

Image: legal-aware.org

Image: legal-aware.org

Thus workers are desperate, and employers are often only happy to exploit this, as we have seen in the prevalence of the zero hour contract. Sports direct used these contracts for over 90% of staff. They offered no holiday or sick pay, and did not have to guarantee any hours. To ensure employees would take home money, they would have to take any hours the employer asked of them, at whatever short notice. Giselle Cory of the Resolution Foundation said in an interview with RealFare earlier this year, that these contracts were also found to be used as management tools, to punish employees if they did not take on work when and as the employer demanded:

“But what we see actually, is that these contracts are being used to disempower the employee. We’ve seen evidence of really bad management practice where someone is on a zero hour contract, their boss says ‘I want you to work Saturday.’ They might say ‘I can’t’ or ‘I can’t get childcare’ for example, or ‘I would simply rather not’, and they are zeroed down, which is effectively where they’re pushed to very few or no hours in the medium or longer term. So that’s in effect, using these contracts as a management tool, when that’s not what they’re intended for and that’s a great imbalance of power between the employer and the employee.”

Giselle Cory, Resolution Foundation

And with the rise of these contracts we also see the worst rates of underemployment on record, with 1.46m people in part time work in need of more hours. Thousands of people are desperate for work and so many take on any contract and terms they can. This is at the expense of their rights and their home life as work may demand availability at any time. Many are at the mercy of employers to work at short notice and so sacrifice plans, commitments, family time for minimum wage jobs that offer them no security or help should they fall ill or need time off. The imbalance is clear.

And the government’s moves have made it easier to exploit employees, and treat them as disposable. The priorities have not been to make a secure employment landscape for people in the recovery but to allow employers to use and abuse at will. Whilst the government and media rhetoric has made it shameful not to work, employers are made to feel no shame for making workers poor on time, worth and money.

by Kam Sandhu @KamBass

1) ‘No more Neets’ – IPPR release new report for Labour plan to tackle 1m unemployed youth

The IPPR released a report entitled ‘No More Neets’ aimed at tackling the ‘lost generation’ of 1m unemployed 16-24 year olds not in employment, education or training.

The report has been attacked for removing benefits from young people and replacing it with a new ‘Youth Allowance’ which would require young people to take on training or work experience for up to six months, before being offered a taxpayer subsidised minimum wage or traineeship role, should they not find any other employment.

The plan takes on some of the welfare-to-work programmes and ideas, but these have failed to solve employment problems time and time again. As Johnny Void explains “you can’t fix unemployment by fixing unemployed people, a lesson which has sadly still not been learned by politicians today.”

Rachel Reeves, Labour welfare minister supports the IPPR report Image: BBC

Rachel Reeves, Labour welfare minister supports the IPPR report Image: BBC

Read the report here.

Read Johnny Void’s post on the report here.

2) Training people to use Universal Credit could cost hundreds of millions

Training claimants to use the new Universal Credit system could cost hundreds of millions, according to an unpublished report commissioned by the Department for Work and Pensions. The study, carried out by 3 London councils, found that each would have to spend £6m over two years on training and support for claimants, to equip them with digital and financial skills required to use the system.

The report suggests that millions of hours of support, face-to-face training and telephone help from charities, private companies and government will be required to ensure claimants can use the online system, or failure to do so could risk debt, eviction and homelessness. Around one in ten claimants will need intensive support.

Image: gov.uk

Image: gov.uk

Iain Duncan Smith, Minister for Work and Pensions, insisted the system would give claimants a chance “to get back into the 21st Century,” by reaching the digitally tame and socially excluded households. However, the Universal Credit system has already been blighted with overspending and budget problems, with £34m already written off earlier this year due to IT problems.

Read more about this story here. 

3) ATOS launches YouTube channel for Benefit claimants

ATOS, the French healthcare company which administers the controversial fit-to-work tests has launched a new YouTube channel for benefit claimants. The channel has some short videos providing information for disabled claimants applying for the new Personal Independence Payment, fit-to-work testing and Employment Support Allowance.

See more videos here.

4) Petition success will see Iain Duncan Smith questioned over flagship policies

Following a petition that gained over 100,000 signatures, Minister for Work and Pensions, Iain Duncan Smith will have to face questioning over the flagship Universal Credit policy and other DWP statistics and spending on 9th December at 4:30pm. Numerous revelations, problems (like the above) and lies have shrouded policy implemented by IDS, in the biggest reforms to happen to welfare policy ever. Yet, the Minister has been regularly absent or unavailable to comment on the problems.

Paula Peters, a disability campaigner posted the following photo and comment after handing in the petition:

“Petition with 105,000+ to call Iain Duncan Smith to account for his lies and corruption. It was taken to Westminister by Jane Linney, Kate Green (Labour Shadow Minister for Disabled People), Liz Kendall (Labour shadow minister for Care and Older People), Paula Peters and Debbie Sayers. The group along with the MPs signed the covering letter that went with the box and then it was handed over. Because of the petition Iain Duncan Smith will appear in front of a select committee on 9th December. So far he has arrogantly evaded attempts to question him, this time he will have to appear. Well done to all the brave and beautiful disabled people who fought long and hard despite facing incredible hardship to make this petition happen.”

1422595_715567895139015_565248047_nRead more about this story here. 

by Kam Sandhu @KamBass

Corporate benefits is a feature which aims to cast light on how big businesses and companies receive benefits and gain profit from welfare policy. Whilst the media have been quick to name and shame the benefit cheats that make up 0.7% of all claimants, they have been quiet on the ways in which corporations profit handsomely from our ‘bloated’ welfare system.

In the last article, we spoke about Workfare – a series of schemes set up by government which hand companies a free workforce, paid unfairly (and unlawfully when referring to laws on the minimum wage) at a cost to the taxpayer and other workers.

This time, we look at Working Tax Credits.

Image: taxcredits.net

Image: taxcredits.net

Working Tax Credits are a means tested benefit for those on low incomes. Essentially, they top up low pay. Working Tax Credits were introduced in the UK in 2003, as a way of encouraging people to take on low paid work. Last year, £14bn was spent on such credits, and as the government pull back welfare spending in all other areas, the solution to saving money here is rarely tackled.

Despite the Working Tax Credit being a huge help to those on low income, it does not address the subject of low pay. And far from the credit being used to help top up the pay of employees of small companies and start up businesses, it now subsidises the pay of employees from huge corporate conglomerates who’s profits are in the billions.

Huge supermarket chains, clothes stores and other companies now have thousands of employees who claim Working Tax Credits. This calls into question the helpfulness of the policy, as what seems to be materialising is a culture of low pay amongst large companies who are aware that the state will pick up the bill.

Whilst the introduction of the minimum wage was meant to protect against the low pay issue, the wage has not increased in line with inflation for years and is running behind at a rate of 10-12%. Thus, the minimum wage is not performing the action of a minimum standard of living. This is why we have recently seen the Living Wage being pressed for in news and media.

Image: citizensuk.org

Image: citizensuk.org

The Living Wage is a rate set according to the basic cost of living in the UK and it recently rose to £7.65 per hour in the UK and £8.80 in London. Companies may take on the Living Wage on a voluntary basis, but as the gap between the minimum wage, inflation and the cost of living increases, the need for the Living Wage is becoming ever more important to those on low pay.

Ed Miliband recently promised a temporary tax break to companies who begin using the Living Wage, if Labour are elected in 2015, and while the momentum for this pay is increasing and positive, legislation is the real power that can change the conditions of all on low pay.

Working Tax Credits, whilst seemingly helping out the low paid worker, is allowing companies – who can afford to pay a living wage – the ability to underpay employees with the knowledge that the welfare system is at hand, and for these companies the tax credit is subsidising profit and avoiding the issue of low pay. Working Tax Credits should only be awarded to those working for small businesses who are trying to grow, as a support to both the worker and the business, if used at all.

Around 20% of welfare spending goes to in-work tax credits, and if the government are serious about cutting welfare spending then it is about time they asked large companies to pay fairly for staff, and put an end to a culture where companies reap the benefits and profits from low paid employees and our welfare system.

by Kam Sandhu @KamBass

Both the left and right in British politics are obsessed with economic outcomes.  The impact of a policy – whether it is a tax cut, tax rise, welfare reform or a free school meal – is almost exclusively evaluated and argued over in terms of its economic effect.  Will it make people better off? Who are the winners and losers?

We often seem to forget that policies have other effects too.  Extending free school meals, for example, will not just give parents more income, but more time.  In schools, it might give a stronger sense of togetherness amongst pupils (less us versus them).  For policy-makers, it will make it easier to improve children’s nutrition.

The same is true of welfare reform.  The research that more or often than not makes the headlines is that which prices up the impact of a new policy.  The IFS are masters at this.  A policy is judged as a success if it happens to put an extra fiver in someone’s wallet.

Yet we cannot understand the true impact of a policy without considering a broader range of outcomes.  And this is the case most poignantly in the area of welfare, where the most disadvantaged and vulnerable people in society have been subjected the most powerful policy changes.  Welfare reforms have made many people poorer, that’s true.  But the wider costs go way beyond tightened purse strings.

We got a sense of these costs this week, with new research in the BMJ showing a rise in suicide associated with the global recession.  My own research focuses on the health and well-being impact of unemployment and the ways in which welfare reforms alter the nature of experienced worklessness.

My findings are somewhat complex to untangle.  In some instances, moving people to welfare-to-work schemes appears to improve well-being.  But there are many caveats here: this only appears to hold for younger people and for people on specific types of programmes.  Unsurprisingly, there is no well-being benefit to the Work Programme.

However, there is one solid finding I encounter time and time again: people who are put on welfare-to-work schemes have significantly higher anxiety than other unemployed people.  The graph below (using data from the Annual Population Survey) shows that unemployed people have an anxiety score of 6.42 (the higher the score, the lower anxiety).  This, as we would expect, is lower than those in work, students or the retired.  However, people on welfare-to-work schemes have much higher anxiety than the unemployed (6.25).

AnxietyDS

Further, this relationship holds even when we look at different types of welfare-to-work participants.  The evidence shows that the kind of welfare-to-work participant who benefits most from these schemes tend to be young, male, poorly educated and enrolled on a scheme that gives demonstrable training or work experience, as opposed to the Work Programme.  However, even these types of participants have similar levels of anxiety to the unemployed.

This evidence leads to a worrying conclusion – welfare-to-work (and potentially welfare reform in general) – leads to an increase in anxiety amongst the unemployed.  Why this might be is an avenue for future research.  The evidence on welfare-to-work is mixed – for certain types of people, and for certain types of wellbeing, some kinds of welfare-to-work programmes appear to be positive.

However, for most participants – regardless of age, qualification level and gender – welfare-to-work appears to increase anxiety.  This is a potent reminder that the costs of welfare reform cannot – and should not – be measured in economic terms.  They go way beyond what can be counted in pounds sterling.

 Daniel Sage

@djsage86

1) Workfare Week of action sees thousands respond and take action
Image; Welfare News Service

Image; Welfare News Service

The Workfare week of action (6-14th July) saw thousands of people from around the country voice their opinion on the controversial Workfare scheme, which forces benefit claimants to work up to 30 hours a week unpaid, or risk losing their benefits.

As well as the demonstration outside the Hilton, where the network dinner was held for the welfare to work convention, there were thousands of tweets, comments and e-mails sent to companies taking part in the scheme and the DWP.

Stay tuned for our interview with Jo from Boycott Workfare up on the site soon.

Read more about this story here.

2) Sick and disabled will be forced to address their ‘barriers to work’ or lose benefits say DWP 
                     Image: http://www.ftadvisor.com

In a press release on Monday 8th July, the DWP announced a new 2 year pilot scheme which would force claimants on sickness benefit to have regular meetings with doctors and therapists in a bid to get them back to work, or they would lose their benefits.

The scheme will target 3,000 claimants on Employment Support Allowance, who have been assessed as able to work in the future. The regular meetings will focus on getting them back into work.

The scheme will run alongside two other pilot schemes to see which works best. This one involves higher healthcare involvement, another will involve enhanced Jobcentre Plus support, and the third has enhanced Work Programme advisor support.

Read the press release here.

3) Carers face eviction and debt due to bedroom tax

Carers are not receiving sufficient help and support as the bedroom tax forces some into debt and possible eviction, despite promises from government to help vulnerable carers.

The Carers UK charity found that one in six carers interviewed in the first 100 days after the bedroom tax was introduced, had fallen behind on rent or were in debt.

Around one in ten carers will continue to qualify for support from the £25m discretionary payment fund created by government specifically to help carers who need support.

Read more about this story here. 

4) £1bn benefit cut will hit Scotland’s most vulnerable

Citizens Advice Scotland has warned that disabled and ill scottish people will lose out on £1bn due to the “quadruple whammy” of the coalition cuts.

Citizens Advice Scotland

Citizens Advice Scotland

With 170,000 people facing the ‘fit to work’ test under the new reforms, Citizens Advice are worried that around 115,000 ill and disabled people will lose out on their benefits unfairly, given the track record of the tests. Around 40% of “fit to work” decisions are overturned at appeal.

On top of this, the benefit replacing the Disability Living Allowance, has new criteria. Personal Independence Payments are given under much stricter circumstances, for example – being unable to walk 50m without assistance.

Disabled people also face being hit by the bedroom tax and housing benefit caps.

Chief Executive of Citizen’s Advice Scotland, Margaret Lynch said the “quadruple whammy [was] making life a misery for sick and disabled people in our communities. The people who have suffered most from the welfare reforms are those who were already the most vulnerable.”

The DWP retains that it is “absolutely committed” to helping disabled people.

Read more about this story here.

by Kam Sandhu @KamBass
Like us on Facebook / Follow us on Twitter

Workfare – The Facts

kamsandhu —  July 9, 2013 — 3 Comments

Due to some media reluctance to cover the subject and confusing and changing terminology used by government, it is still not clear to some what workfare is and what it is doing for employment. So as it’s the Workfare Week of Action and tonight there is a demonstration outside the Hilton, we thought we’d share some facts to fill in the gaps.

Workfare Protest 9th July

Workfare Protest 9th July

  • What is Workfare?

Workfare is a scheme introduced in 2011 by the coalition government under the Community Action Programme, to supposedly help people get off of benefits and into work. It requires claimants to work 30 hours a week for between 4 weeks – 6 months for their benefits, including placements at profit making businesses.

  • Is it Voluntary?

Last year, the scheme was exposed for ‘tricking’ people into enrolment, by not informing claimants of their rights, letting them know they didn’t have to do it, and not telling them that they would lose their benefits should they change their mind during the scheme. After lobbying and pressure from campaigners and companies, the government lifted some of the unjust sanctions and said they would ensure the scheme was only undertaken by claimants who wanted to do it.

However, if claimants decide to not take part in the scheme, they may be referred to Mandatory Work Activity (MWA) whereby they are forced to undertake a workfare placement. So the scheme is indeed, voluntary, ‘until you refuse’, say the Boycott Workfare organisation.

  • Who does it affect?

Initially the government said that the scheme would only affect those who were long term unemployed. It also did target young people, who were perhaps looking for their first full time job after university or college. However, this has widened to many people, including the short term unemployed and the disabled.

In fact, it was revealed that over 12,000 disabled people were put on the MWA programme since it began and it is feared that some placements have been damaging to health:

“Claimants can be sent on unpaid work with no real assessment of their health or circumstances.  Jobcentre staff may not even know that a claimant has a health condition which makes a placement unsuitable.  With many claimants too terrified about DWP bullying and sanctions to complain, it is almost certain people have been sent to do work which has damaged their health.”

Johnny Void

  • Who does it benefit? 

Government bravado – as the scheme massages the employment figures. Yes, that’s right, the number of people on workfare schemes are classed as employed in government statistics.

Big business profits – They do not have to pay for staff. Instead, ironically, the taxpayer pays for benefits that are used as the wages for big business – adding to the profits of companies. There have been instances where paid staff have been sent home, and workfare staff are used to finish shifts – saving places like Tesco a few more minimum wage hours. Every little helps.

  • Does it work?

No.

The DWP’s own statistics and evidence released last month, revealed that the workfare scheme had ‘no impact on the likelihood of being employed.’ In fact, the scheme is detrimental by giving claimants less time to look for paid work.

No impact on the likelihood of being employed.’

We must stop this scheme.

Make your voice heard during the Workfare Week of Action 6-14th July. 

by Kam Sandhu @KamBass
Like us on Facebook / Follow us on Twitter

In another blow to the coalition’s efforts to streamline welfare spending and increase employment, figures released on Thursday suggest that the Work Programme, brought in during 2011, isn’t working.

Image: Parliament Uk

Image: Parliament Uk

The Work Programme, now two years into practice, was a coalition initiative which aimed to get 1.2 million long-term unemployed people living in the UK, back into a job.

The programme runs by using private contractors such as A4E and G4S, to help lift the long-term unemployed, those who have been out of a job for more than a year, into employment. These contractors operate on payment-by-result basis, meaning that the more people they move into employment lasting 6 months or more, the more money they are awarded by the government.

However, the latest figures released by the Department for Work and Pensions show that just 1 in 10 people have been helped back to work by the £5 billion scheme in the last two years, meaning that so far, each job has cost the taxpayer around £40,000 to secure.

Despite the seemingly obvious shortfalls of the scheme, on Thursday after the release of the government’s latest figures, Employment Minister Mark Hoban said: “The improvement in performance over the past year has been profound and the scheme is getting better and better. And because providers are rewarded for success, the Work Programme is designed to give taxpayers a far better deal than previous schemes.”

Crisis Homeless Charity accuses government of spin on Work Programme figures.

Crisis Homeless Charity accuses government of spin on Work Programme figures.

Although the figures do suggest that the scheme is improving, many have still accused the government of “spin”, with homelessness charity Crisis pointing out that statistics also showed just 1 in 20 sick and disabled people on the scheme have managed to find lasting employment.Despite improvements in its overall employment numbers since last year, which saw just 9,000 people finding a job lasting 6 months or more, the programme has missed government targets across the board. The most alarming of these missed targets is the Work Programmes effectiveness to get those who receive Employment Support Allowance (ESA) back in to work.

ESA is the benefit for those who are ill or disabled and therefore find it hard to find a job – the very people that the programme was supposed to be helping the most, as invariably, those who receive ESA have been unemployed for the longest terms. From March 2012 to March 2013, just 5.3 per cent of those who received ESA found a job that lasted 6 months or more – well below the governments own minimum target of 16.5%.

When asked about the effectiveness of the Work Programme, Crisis Chief executive Leslie Morphy said: “The Work Programme was set up to help those furthest from work back into employment. On that measure, it has been a miserable failure. The Government’s own statistics, our research, charities and thinktanks are unanimous: homeless people and others who need more support have been left parked without meaningful help.”

The DWP has issued ‘improvement notices’ for 12 contractors who are “lagging behind” their contracted levels for helping claimants in to jobs, in an effort to try and boost numbers by the end of this year, with the threat of termination of the contracts if the companies do not show “significant” changes with their job success figures.

Shadow work and pensions secretary Liam Byrne has also waded in to the debate over government spin, saying: “The Work Programme is still failing and failing badly.

“The government missed every single one of its minimum targets and in nearly half the country, the Work Programme is literally worse than doing nothing.”

Careers Development Group in East London, Pertemps in Solihull, Newcastle College Group in Solihull, Rehab Job Fit in Wales and Newcastle College Group in Yorkshire have the worst conversion rates for getting those who receive ESA into work, managing to help just 2% of those who are on the Work Programme as – opposed to the minimum set target of 16.5%.

According to the Independent, the Government was warned by the private contractors that the cost of helping those on ESA could not be met by the scheme.

Kirsty McHugh, chief executive of the Employment Related Services Association, said: “It will inevitably take longer to help those on ESA into sustained jobs as many are a long way from the labour market. Over 25 per cent of people on ESA have been out of work for at least 11 years and therefore we’re going to need to pool skills and local health budgets with Work Programme cash to help more of this group into work.”

If this is indeed the case then why have the government not already started looking into other ways in which they can help those on ESA? Well, the answer, as always, seems to be money.

George Osborne delivering the Spending Review Image: The Telegrapg

George Osborne delivering the Spending Review Image: The Telegrapg

In his budget speech this week Chancellor George Osborne announced that as part of a bid to save £11.5bn in 2015, the DWP will have to find a further 9.5% of savings in the department’s running costs.

He warned that this will require a “difficult drive for efficiency” and a “hard-headed assessment of under-performing programmes”.

Richard Hawkes, chief executive of the disability charity Scope, agrees: “These figures will confirm what many disabled already know about the Work Programme – it’s not working for them. A one-size-fits-all approach means disabled people aren’t getting the individual, tailored support they need.”

Head of the Commons Work and Pensions Select Committee, Dame Anne Begg has also warned that change is needed if the government want to get the Work Programme working: “We remain deeply concerned that the Work Programme, as currently designed, is insufficient to tackle the problems faced by more disadvantaged jobseekers. Doing nothing and hoping things improve is no longer an option.”

Let’s hope that this means there will now be a re-assessment of how contractors can help those who are furthest away from securing jobs, such as recipients of ESA, as opposed to just focusing on those that will yield the contractors the easiest and fastest payment securements.

Like us on Facebook / Follow us on Twitter

Welfare To Work Words

The image above illustrates the large network of what policy academics call ‘active labour market policies’ (ALMPs); or what politicians refer to, in the increasingly Americanised language of social security, ‘welfare-to-work’.

ALMPs are big business.  They are in large part carried out by huge private sector providers, such as A4E and G4S, as well as a ‘supply chain’ that consists of hundreds, if not thousands, of smaller organisations and companies. According to the BBC, the Work Programme alone is expected to cost up to £5bn.

But as well as being big business, ALMPs are an integral component of the social security ‘contract’ that exists between the state, the public and benefit claimants.  The contract, so it goes, is that unemployed people agree to a wide range of – often stringent – work-related conditions: this in return for (a) benefits and (b) the provision of back-to-work ALMPs.

The state then, like the unemployed, has rights and responsibilities: the right to expect benefit claimants to take certain steps to get back into the labour market, but also the responsibility to provide good services that enable a transition back to work.  So this raises an important question: how well do we actually provide for the unemployed in terms of labour market programmes?

A simple but effective way to answer this is to look at what other countries do.  The OECD is a useful resource here, as they collect statistics on how much countries spend on ALMPs.  The graph below shows how much other European countries spent in the most recent year of data collection, as a percentage of GDP.

Spending on ALMPs in the OECD (% GDP)

SpendingonALMPsintheOECD

As is obvious, we don’t do very well: spending on ALMPs is just 0.38% of our national income.  In fact, the only countries that spend less than us on ALMPs are the former communist states of Slovakia, the Czech Republic and Estonia.  What’s far more normal for countries like us, in terms of GDP, is for over 1 per cent on all spending to go on welfare-to-work, such as in the Netherlands (1.2%), France (1.1%) and Belgium (1.5%).  Denmark, meanwhile, spends a whopping five times more than the UK does on back-to-work schemes.

Our poor record on ALMPs is reflected even more intensely in what the EU calls ‘the activation rate’.  This is the number of unemployed people, per 100, who are enrolled onto welfare-to-work programmes.  The image below shows the pitiful coverage of UK provision: for every hundred unemployed people, just over one person is participating in activating schemes.  This compares to rates of over a fifth in other major West European economies, such as Italy, Sweden, Spain and Belgium.

The ‘activation rate’ in EU countries

Activation Rate in EU

In fact, the UK is bottom of this league table across the entire EU.  This means there are a higher proportion of unemployed people on ALMPs in countries like Bulgaria, Romania and Lithuania.  Even tiny Malta has a higher activation rate than the UK.

So, whilst the state asks a lot from the unemployed, it simultaneously fails to provide them with a relatively high standard of labour market programmes.  The key point here is not that it’s unfair to ask – or even compel – unemployed people to take steps back to work.  Rather, it’s unfair that we ask so much of the unemployed yet do so little, compared to other countries, to help them.

David Cameron and George Osborne like to talk about the ‘Global Race’ that the UK is in: a race where we must compete more effectively and efficiently against our economic competitors.  Yet if we really are in a ‘Global Race’, then surely a test of how where we stand is by how much our government invests in reskilling the unemployed.  And on this test, we are miserably failing.

Daniel Sage

Like us on Facebook / Follow us on Twitter