End Workfare Now: Part 3

Workfare Is Unjust

Workfare unfairly penalises the unemployed. For example, in 2011 the ConDem government made the conditions imposed on benefit claimants and the penalties for avoidance under the Labour government’s New Deal even more stringent. Those performing workfare were required to work for up to thirty hours a week for 28 days. The work performed was to be that which benefited the community. Taken as wages, this meant that claimants were working at a rate of £2.50 an hour, well below the minimum wage. If they turned the job down, or didn’t complete the course of mandatory labour, they had their benefits sanctioned for three months. This was increased to six if they repeated the ‘transgression’. This is unjust, because no-one else in society is expected to work for the minimum wage except convicts in prison.

It’s also unjust in that it makes the economically insecure even more so, and takes away the way long-accepted social right to refuse to work. At the same time, it gives power over the unemployed to the state’s bureaucrats and the private outsourcing companies. Also, forced labour is offensive against human dignity and does not lead to increased personal development.

Workfare Stops People Looking for Jobs

Spending thirty hours a week on workfare actually cuts down on the available time the unemployed are able to spend looking for work. P.A. Gregg, in their book Job Guarantee: Evidence and Design (Bristol: Bristol University Centre for Market and Public Organisation 2009) actually found that because of this, workfare actually stopped people from getting jobs.

Lowering Incomes over Life

Workfare is also unjust, as instead of giving people the ability to acquire a career, or jobs leading to one, it may instead lower their long-term income by keeping them in a series of low-paid, temporary work. People should have the right to decide for themselves which jobs to take and what they should do when it affects their long term prospects. If the state instead forces them to take a certain course, then it should also be required to compensate them if the course demanded is the wrong one.

Workfare Keeps Wages Low

By forcing people to take low-paid jobs, and making this a threat to force other workers also to take jobs that pay less than they would otherwise take, workfare leads to lower wages. The Labour Party in the UK declared that it was in favour of a ‘national living wage’ above the minimum. However, it then contradicted this intention by stating that those performing workfare would do so at the minimum wage. The Labour party may have meant this to stop those on workfare competing with those in paid employment, though MPs like Liam Byrne have shown themselves to be every bit as spiteful and punitive in their treatment of the unemployed as the Tories. In any case, this policy still puts on pressure to force wages downwards.

For there to be a genuine living wage, politicians should increase and strengthen the ability of the unemployed to bargain for higher wages. It is only when workers really have an effective ability to bargain that employers are either forced to pay a living wage, or decide that the job is unnecessary and the potential productivity too low. Standing concludes from this that ‘The reality is that the utilitarian mindset does not care about the precariat’.

Workfare Labour Replaces Genuine Workers

If the jobs performed under workfare were genuine and productive, it would be unfair to workers in those jobs, and to the short-term unemployed, as the government-subsidized labourers supplied under workfare would replace existing workers, or stop them hiring other unemployed people. In 2011 Tesco collaborated with the Jobcentres to create 3,000 unpaid placements for those on workfare, who would work for the company for four weeks. Homebase and Asda were
also keen to use such unpaid labour. As was Poundland, which also announced that it was taking on benefit claimants, though it denied that this would affect their existing recruiting activity. Whatever those companies said, clearly their use of cheap workfare labour was replacing paid workers and stopping the unemployed from getting permanent jobs with those companies.

Workfare Extends State Power

When the High and Appeal Courts upheld the challenge to performing mandatory workfare by the geology graduate, who objected to having to work in Poundland, and a young chap, who had been sanctioned for refusing it, the Condem government responded by rushing through emergency legislation making the refusal to perform workfare punishable by sanctions. The procedure in which the legislation was rushed through parliament was supposed to be use only in national emergencies. The legislation further contravened accepted notions of justice, in that it acted retrospectively. That is, it punished actions committed before the laws against them had been passed, an idea that strikes at the very notion of justice enshrined across the world in human rights laws. The Labour party, which should have opposed this motion, didn’t. They abstained, and members of the Shadow Cabinet were told that if they voted against the motion, they would have to resign. This demonstrates just how deeply workfare had become embedded as the official ideology of the state and the main parties.

Welfare-to-Work as Corporate Scam

The private companies administering workfare, such as A4E and Ingeus, have profited immensely from this new, growth industry in unfree labour. They are paid £13,500 for every person they manage to put in a long term job. If the job is only short-term, then they receive only half that amount. There is thus considerable pressure for them to choose only those most likely to obtain long term employment, and thus discriminate against vulnerable minorities, including the disabled. The Employment Related Services Association, the trade body for the welfare-to-work industry, complained that more of the people being referred to these companies were those with disabilities, who had been judged ‘fit for work’ according to the tests imposed for the Employment and Support Allowance awarded to the disabled to help them maintain their independence.

The workfare companies also have wide powers in deciding which ‘work placements’ to put people on, and what counts as ‘community benefit’. The DWP permits them to place workers in private companies if this is considered to benefit those firms’ local communities. For a long time the DWP has refused to publish the information on the allocation of workfare labourers to private firms. The government flatly refused to reveal the identities of the participating firms on the grounds that if they did so, the scheme would fail due to public pressure forcing them to drop out. A list of the firms involved has recently been released after a series of Freedom Of Information Act requests. The two largest workfare contractors also refused to comment, when they were asked if they were forcing the workers contracted to them to work for private companies.

Additionally, many of the private companies administering the scheme are run by, or have links to, politicians, which is symptomatic of the general corporate corruption of parliament and the revolving door between corporations, MPs and senior civil servants. Tomorrow’s People, the charity that became notorious for stranding the workfare labourers it had employed for the Queen’s Diamond Jubilee under London Bridge, where they were forced to sleep, was run by a Conservative peer.

Conclusion: End Workfare Forced Labour

Workfare is thus highly exploitative, and should be banned. It is the thin edge of a wedge leading to the increasing use of force against the poor and unemployed. One staff member from the Citizens’ Advice Bureaux described the situation to Standing thus

The boundaries of the acceptable are being pushed further in the direction of unfree labour. We’ve been here before – breaking stones in return for food during the Irish famine, and similar schemes in 16th & 17th century England, the difference being that technology means peoples’ activity can be monitored more and informal economy lifelines are being pushed further underground. I was talking with a colleague who has picked up growth of prostitution as one means of survival. I don’t know what it would take to break us (society, whatever that means) out of apathy to make protests against what we’re doing to ourselves.

Standing also makes a very apt point, directed at those members of the Left, who refuse to take a stand on it, fearing that it would damage their parties’ chances of winning elections. He states

It is a moralistic policy that should be passionately opposed by every liberal and progressive. If doing so puts political success at risk, so be it. Values matter.

This looks like a dig at Blairite New Labour, which has consistently abstained on the workfare issue instead of firmly opposing it. The Blairites based New Labour’s electoral success on appealing to swing voters, and not challenging Tory policy, except on the grounds that they could administer it more efficiently and were more concerned with social justice. The latter view is particularly specious, as in many cases New Labour went much further in its austerity and privatisation programmes than the Tories. It’s a concern that still motivates the Blairites in their repeated campaigns against the Labour leader, Jeremy Corbyn. And it’s not an excuse for failing to tackle this new form of forced labour, a system that is slowly edging towards real slavery.

Bibliography

Alexander Berkman, ‘Lazy Men and Dirty Work’, in George Woodcock, ed., The Anarchist Reader (Fontana Press: 1986) 334-338.

Alex DeJonge, Stalin and the Shaping of the Soviet Union (Fontana/Collins 1986) 270-2.

‘Miss World and Mrs Mao’ in Clive James, The Crystal Bucket (Picador: 1982) 232-4.

Guy Standing, A Precariat Charter: From Denizens to Citizens (London: Bloomsbury 2014) 262-79.

‘Labour Service (Reicharbeitsdienst – RAD)’ in James Taylor and Warren Shaw, A Dictionary of the Third Reich (London: Grafton Books 1988) 213.

‘Unemployment’ in James Taylor and Warren Shaw, A Dictionary of the Third Reich (London

Guy Standing’s Arguments against Workfare: Part 4

Workfare Extends State Power

When the High and Appeal Courts upheld the challenge to performing mandatory workfare by the geology graduate, who objected to having to work in Poundland, and a young chap, who had been sanctioned for refusing it, the Condem government responded by rushing through emergency legislation making the refusal to perform workfare punishable by sanctions. The procedure in which the legislation was rushed through parliament was supposed to be use only in national emergencies. The legislation further contravened accepted notions of justice, in that it acted retrospectively. That is, it punished actions committed before the laws against them had been passed, an idea that strikes at the very notion of justice enshrined across the world in human rights laws. The Labour party, which should have opposed this motion, didn’t. They abstained, and members of the Shadow Cabinet were told that if they voted against the motion, they would have to resign. This demonstrates just how deeply workfare had become embedded as the official ideology of the state and the main parties.

Welfare-to-Work as Corporate Scam

The private companies administering workfare, such as A4E and Ingeus, have profited immensely from this new, growth industry in unfree labour. They are paid £13,500 for every person they manage to put in a long term job. If the job is only short-term, then they receive only half that amount. There is thus considerable pressure for them to choose only those most likely to obtain long term employment, and thus discriminate against vulnerable minorities, including the disabled. The Employment Related Services Association, the trade body for the welfare-to-work industry, complained that more of the people being referred to these companies were those with disabilities, who had been judged ‘fit for work’ according to the tests imposed for the Employment and Support Allowance awarded to the disabled to help them maintain their independence.

The workfare companies also have wide powers in deciding which ‘work placements’ to put people on, and what counts as ‘community benefit’. The DWP permits them to place workers in private companies if this is considered to benefit those firms’ local communities. For a long time the DWP has refused to publish the information on the allocation of workfare labourers to private firms. The government flatly refused to reveal the identities of the participating firms on the grounds that if they did so, the scheme would fail due to public pressure forcing them to drop out. A list of the firms involved has recently been released after a series of Freedom Of Information Act requests. The two largest workfare contractors also refused to comment, when they were asked if they were forcing the workers contracted to them to work for private companies.

Additionally, many of the private companies administering the scheme are run by, or have links to, politicians, which is symptomatic of the general corporate corruption of parliament and the revolving door between corporations, MPs and senior civil servants. Tomorrow’s People, the charity that became notorious for stranding the workfare labourers it had employed for the Queen’s Diamond Jubilee under London Bridge, where they were forced to sleep, was run by a Conservative peer.

Conclusion: End Workfare Forced Labour

Workfare is thus highly exploitative, and should be banned. It is the thin edge of a wedge leading to the increasing use of force against the poor and unemployed. One staff member from the Citizens’ Advice Bureaux described the situation to Standing thus

The boundaries of the acceptable are being pushed further in the direction of unfree labour. We’ve been here before – breaking stones in return for food during the Irish famine, and similar schemes in 16th & 17th century England, the difference being that technology means peoples’ activity can be monitored more and informal economy lifelines are being pushed further underground. I was talking with a colleague who has picked up growth of prostitution as one means of survival. I don’t know what it would take to break us (society, whatever that means) out of apathy to make protests against what we’re doing to ourselves.

Standing also makes a very apt point, directed at those members of the Left, who refuse to take a stand on it, fearing that it would damage their parties’ chances of winning elections. He states

It is a moralistic policy that should be passionately opposed by every liberal and progressive. If doing so puts political success at risk, so be it. Values matter.

This looks like a dig at Blairite New Labour, which has consistently abstained on the workfare issue instead of firmly opposing it. The Blairites based New Labour’s electoral success on appealing to swing voters, and not challenging Tory policy, except on the grounds that they could administer it more efficiently and were more concerned with social justice. The latter view is particularly specious, as in many cases New Labour went much further in its austerity and privatisation programmes than the Tories. It’s a concern that still motivates the Blairites in their repeated campaigns against the Labour leader, Jeremy Corbyn. And it’s not an excuse for failing to tackle this new form of forced labour, a system that is slowly edging towards real slavery.

Private Eye from 2011 on the Corporate Sponsors of Cameron’s Outsourcing Policy

Private Eye ran this article in their issue for 22nd July – 4th August 2011, on the outsourcing corporations sponsoring the conference at which David Cameron released his policies, and the massive layers of corporate bureaucracy involved, as well as the way the taxpayer is expected to pick up the pieces for commercial company’s failures.

Will It Workfare?

When David Cameron launched his “Open Public Services” white paper last week, he did so at a conference arranged by a think-tank funded by the very firms who will benefit from the privatisations his document proposes.

Cameron unveiled his plan at a Canary Wharf event hosted by “Reform”, a right-wing charity funded by business “partners”. Cameron and his ministers regularly appear at Reform events; and the PM proposed “releasing the grip of state control and putting power in people’s hands”.

The list of Reform’s backers suggests who those people will be. They include leading hospital privatiser General Healthcare, prisons and schools firm G4S, cleaning and catering outfit Sodexo and all-purpose giants Serco and Capita. Telereal Trillium, which already gets £284m a year for running government properties, also funds Reform, as does PA Consulting, which makes millions as an adviser on several privatisations.

But will the outsourcing plan actually work? given how existing arrangements are panning out, it seems unlikely.

Days before the white paper, the Department for Work and Pensions quietly published some research on the previous government’s “welfare-to-work” outsourcing scheme, which pensions secretary Iain Duncan Smith will soon expand with a new “work programme”. The model involves layers of bureaucracy that would be derided in the public sector; first “prime providers” creaming off the fees, then subcontractors doing the leg work. And it’s not going well.

The DWP report reveals that, so parlous is the economics, “60 per cent of subcontractors have sough financial assistance from their prime provider”. As for the notion of the private sector bearing the risk, the researchers record: “The 23 per cent of subcontractors receiving guaranteed referrals from prime contractors are much more likely to feel financially secure.” When the insecurity of any of the 77 per cent translates into failure, the taxpayer will pick up the pieces.

Perhaps more revealing than the research is the fact that it was conducted by PricewaterhouseCoopers. With the inside track, PwC last month withdrew its bid to act as a prime provider and subcontractor on IDS’ new work programme.

PS: The work scheme is at least providing jobs for former Labour ministers.

Jim Knight, given a life peerage after losing his South Dorset seat in the 2010 general election, is a former employment minister who last month became a non-executive director of Alderwood Education.

This company was launched specifically to cash in on the Duncan Smith initiative; its executives saying that “welfare to work is a huge growth opportunity”. Well, it has been for Lord Knight, who until recently was an opposition employment spokesman in the upper chamber and now joins a gaggle of other ex-Labour ministers in the work programme field. They include David Blunkett (A4E), Jacqui smith (Sarina Russo and Angela Smith (Vertex).

I’ve already written pieces about the malign influence of Reform on the government and its vile policies. I can also remember reblogging pieces from Johnny Void as well as posting bits from Private Eye about how these firms were indeed failing, and having to be bailed out by the taxpayer after aIDS’ wretched welfare-to-work programme spectacularly failed to get people into jobs. Of course, the whole point of these organisations is not to combat unemployment, but to give the illusion of doing so, while giving work to the Tories corporate donors.

Private Eye from 2012 on the Failure and Misgovernment at the DWP

In their edition for 1st – 14th June 2012, Private Eye devoted nearly a page to the disgusting actions, policies and general misgovernment in aIDS’ DWP. Here it is.

Not Working: A DWP Special

Freudian Slip
How serious does the Department for Work and Pensions (DWP) treat cases of alleged fraud in its multi-million-pound employment programmes, under which private companies are meant to help benefit claimants find work?

Last week pressure from ministers led Tory MPs on the Commons public accounts committee (PAC) to oblige their colleagues to listen in secret to whistleblowers describing potential fraud by welfare-to-work firms like Working Links and A4E.

This was just the DWP’s latest attempt to hide its dirty washing: it has been shifty about possible cheating by the “benefit-busting” firms for years. Take, for example, the mysterious “annual report” on employment programmes which was promised to MPs before disappearing from sight.

In 2010, MPs on the Work and Pensions Committee said that reports of the “Risk Assurance Division”, which investigates allegations of fraud by workfare companies, “must be published where wrongdoing is found”.

While the DWP argued that publishing the reports would be unfair on contractors, its “delivery director” Alan Cave instead promised some “regular reporting of trends and lessons learned” in an annual report.

This March, when the Eye asked to the report, the DWP press office responded with contradictory answers. The report was published, it said, and a copy would be sent. Then it announced that the report was about to be published. Finally it stopped returning the Eye’s calls altogether.

Unable to get any sense from the press office, the Eye made a freedom of information request. The DWP pointed to a March admission to MPs by Mr Cave that the report had not been delivered. Cave said because of the new government and new Work Programme, it “seemed sensible to put a pause on that while we got the new system up and running before returning to that.”

Really? The Eye made another freedom of information request to see any papers relating to the report-but the DWP says there are none. In other words, all the work in providing MPs and the public with information on workfare fraud apparently hasn’t generated a single email, minute, letter or note.

In fact, the entire proposed annual report appears to be a fob-off, as it seems the DWP didn’t put any work into it anyway.

Missing Links
The evidence of Eddie Hutchinson, former head of internal audit at “benefit-busting” firm Working Links, confirms what the Eye has been saying repeatedly: there is something seriously wrong with this company, which gets more than £100m a year from taxpayers (via the DWP) to help the unemployed.

Hutchinson told the Commons public accounts committee that fraud was “extensive” and “systemic” at Working Links, explaining: “All these frauds involved the falsification of job outcome evidence to illegally claim monies from the DWP, together with the false claiming of bonus payments by staff through the company’s incentive bonus system”.

In 2006, DWP research showed the firm failed to meet targets on benefit-busting schemes, whereas JobCentre staff did twice as well. The government responded by taking JobCentre staff of the job and handing more schemes to Working Links. In 2009 Ofsted found that Working Links was failing to meet targets – so the government stopped Ofsted inspecting benefit-busting programmes!

In 2011 the Eye saw a leaked report showing the DWP had caught Working Links claiming money for people it had not helped into work in Liverpool. Hutchinson’s evidence suggests that DWP clawed back cash for similar fiddles in South Wales (2007), Glasgow (2007 and 2008), Hackney (2008) and other areas. However, while the DWP asked for the money back, it does not appeared to have punished the firm.

* it may be generating bad headlines for its sloppy internal financial controls, but A4E still knows how to find work for people – if they happen to chums with the chancellor anyway.

A4E recently hired lobbyist George Bridges and his firm Quiller Consultants to help with its crisis management. Bridges, a personal friend of George Osborne, became head of Conservative Campaigns in 2006 and helped Osborne run the Tories’ election campaign in 2010.

Quiller Consultants itself is owned by Tory peer Lord Chadlington, who also happens to be Cameron’s constituency party chairman in Witney. His links with the prime minister caused embarrassment last year when it emerged that the lobbyist lord had sold Dave a strip of land used as a driveway and garage at the PMN’s Witney home. Chadlington bought the land and sold it to the prime minister, raising questions about lobbyists’ access to Cameron.

Downing Street meanwhile is considering hiring another Quiller Consultant, Stephen Parkinson, to pep up Number 10’s spin operation. Parkinson was also previously a Conservative Central Office apparatchik, underlining the close links between a4e’s new friend and the government.

Factory Fibs
Work and Pensions secretary Iain Duncan Smith refused to apologise for declaring that disabled people in Remploy’s supported factories were “not doing any work at all… just making cups of coffee”.

Perhaps he was bolstered by Remploy chairman Ian Russell’s own foreword to the recently published 2011 accounts claiming that workers “have little or no work on most days of the week”. The comments help the case for closing 36 of the remaining 54 Remploy factories, despite union figures showing that 85 per cent of disabled workers made redundant in the last round of Remploy cuts remain unemployed.

One problem – a recent congratulatory internal letter from Remploy Enterprise Businesses (EB) managing director Alan Hill paints a different picture of life in the factories. “I am delighted to say the overall performance of EB has been outstanding,” writes Hill, reporting that sales have grown 12.2 per cent in the last financial year, reaching £117m.

Indeed, after cutting costs as well, the Remploy factories’ overall operating result had improved by a whopping 27.9 per cent, according to Hill. A KMPG analysis produced in Mary found that some of the Remploy businesses – such as making car parts and monitoring CCTV – were viable and even profitable, while others could also be made sustainable.

NEST beg

Misleading advertising is nothing new when it comes to financial product mis-selling, but few would expect the government to exploit a loophole to produce its own dodgy sale pitch.

The DWP has been busy pushing “workplace pensions”, using adverts that feature toy people building a rising wall. “A simple step to a better future” is the unequivocal message.

The principle “workplace pension” being promoted is the government’s default scheme into which employees will soon be automatically enrolled, the National Employment Savings Trust (NEST). But tis is a stock-market based scheme in which there will be a large number of losers after fees, the loss of other means-related benefits and the fact that stock markets can go down as well as up. Go in at the wrong time and you’re effectively screwed.

The standard disclaimer to this effect is, however, missing from the government’s adverts because, the DWP tells an Eye reader, its lawyers agreed that the adverts’ purpose “is to promote the general concept of saving through workplace pensions, rather than saving through a specific product”. Never mind that almost all such schemes, including the reassuringly branded NEST, are now stock market-based.

The government is effectively saying that volatile investments will be a good bet for a safe pension, risk-free. The next big mis-selling scandal, in other words.

This catalogue of incompetence, lies, fraud and failure also puts the lie to another claim by the Right: that Socialism somehow punishes excellence. By redistributing wealth and putting checks on the rapacity of senior management, the argument goes, Socialism and the welfare state somehow punishes the superior skill and talents of private entrepreneurs. This shows the opposite: that it actively rewards failure and punishes excellence. How else can you explain the determination to stop JobCentres finding work for the unemployed and hand it over to fraudsters like Working Links, or close profitable and potentially profitable Remploy factories? Or promoting potentially underperforming ‘workplace pensions?’ This is all about supporting failing private industry, the Tories’ paymasters, and punishing excellence in the state sector. This even goes as far as the personnel selected to run the Department. Ian Duncan Smith stands out as a man of precious little talent, but somehow this massive failure of a man has been awarded an entire department to run, and run into the ground.

From 2013: Private Eye on the Government Doctoring Workfare Stats

As numerous left-wing bloggers have pointed out, the government’s welfare-to-work programme has been a disaster from the start. Johnny Void in particular has repeatedly pointed out how you are actually more likely to get a job using your own initiative, than if you are one of the hundreds of thousands of unfortunates pressganged into workfare. I’ve posted up several pieces from Private Eye supporting this, and showing that the workfare sector can only succeed and make a profit through continual bail-outs. In some cases, employees for the workfare companies have even been reduced to committing fraud by falsifying the names and details of claimants, who have found work through the system.

In their issue for the 19th April – 2nd May 2013, Private Eye carried this story reporting how the government itself was falsifying the statistics in order to present workfare not as an appalling shambles, but as a success. The story ran

Emails between employment minister Mark Hoban and lobbyists representing Work Programme contractors reveal how the coalition tried to massage the pisspoor results of its welfare-to-work initiative last year “for public consumption.”

The correspondence, released to Private Eye, under freedom of information rules, show that Hoban pushed for “simple” figures to be publicised instead of the grim official statistics – a pattern likely to be repeated when the Department for Work and Pensions (DWP) releases more Work Programme results next month.

The first figures, released in November, sowed that firms like A4e were not meeting minimum performance levels. The DWP had estimated that 5.5 percent of the unemployed would find jobs without the programme; and as no workfare firm has exceeded this, performance was thus worse than useless.

Hoban responded by meeting Kirsty McHugh, head of the Employment Related Services Association (ERSA), which lobbies for A4e, Working Links and others who are paid to get the jobless off benefits and into work. She told Hoban: “On performance overall, I think it is really important that both the industry and the department are robust in terms of defending the Work Programme as much as we can.”

Instead of castigating failing contractors, Hoban agreed and emailed McHugh to thank her for “discussion around the November publication and the simplicity of messages required for public consumption”. He told her he was keen on the ERSA figure of “200,000 Job entries” which, he said, would be “much more understandable to the media/public than discussion around Job Outcomes.”

This “simple figure” was misleading, however. Official “job outcomes” numbers show the proportion of the unemployed who find and keep jobs via the Work Programme. Baldly stating that 200,000 people started jobs means little without counting the far larger official number who did not start or hold on to a job.

Hoban preferred to push unofficial industry figures over official ones, however, and set up teleconferences and meetings between ERSA and the DWP press office. The emails also suggest he considered simply ignoring the contractors’ failure to meet minimum performance levels. But McHugh wasn’t so sure. She emailed Hoban to say: “On Minimum Performance Levels we absolutely take the points made by the department of these. However, our view is that the existence of Minimum Performance Levels are in the public arena and we need to prepare for questions around them.” In the event she was right. Hoban’s official DWP press release avoided all mention of minimum performance failure – but this damning statistic still grabbed the headlines.

It really isn’t surprising any more that Hoban should prefer to publish industry spin, rather than any kind of objective assessment. The Tories see themselves as the party of business, to the near absolute exclusion of any other concerns. Furthermore, all the parties have developed almost symbiotic links with the major government contractors. Private firms, like the big accountants, send staff to help the political parties formulate policy. They sponsor the party political conferences, and then afterwards offer politicians and senior civil servants well-paid seats on their boards. Hoban was probably thinking of this, when he went off to get McHugh’s advice.

And massaging statistics seems to be second nature to the Tories. Mike and the other left-wing bloggers have in vain tried to get the figures for the number of people, who have died after being assessed as fit for work under the Work Capability Assessment, from the DWP under the Freedom of Information Act. The DWP have repeatedly turned this down, often under the most spurious claims. They have also released completely different sets of figures on similar issues, but subtly different, in order to present the situation as being much better than it actually is.

This is a mendacious government, which has been lying almost since before Cameron was elected. It’s high time it was gone.

Private Eye on A4E Claiming for People Who Already Had Jobs

I’ve posted up a number of pieces recently on fraud and the welfare to work industry. Johnny Void has also blogged extensively on this subject, providing very detailed accounts of the way the workfare companies have overcharged the government for their services. This includes claiming for unemployed people, who had already found work.

Private Eye has also covered this topic. I found this article on the way A4E were also guilty of such fraud in their issue for the 27th July – 9 August 2012.

Welfare-to-work contractor A4E has found a new way to make money from the government’s struggling Work Programme: claim bonuses for people who already have jobs.

The programme supposedly pays by results, giving cash to firms like A4E only when they get people off the dole. The government considers claimants “attached” to A4E and co for such purposes only once they have had an interview. But internal A4E memos obtained by claimants groups Ipswich Unemployed Action earlier this year included the instruction that as long as they grab claimants for an interview up to the day before starting a job, “you will be eligible for the attachment fee and any subsequent outcome/ sustainment payments”.

The Department for Work and Pensions (DWP) pays £400 for each “attachment” followed by bonuses running from £4,000 to £13,000 if the attached person says in work for two years.

Margaret Hodge MP, chair of the Commons public accounts committee, was given evidence suggesting A4E had offered £50 vouchers to encourage unemployed people who had already found a job to sign up to A4E’s programme. The firm told the Eye: “A4e does not offer any form of voucher incentive for customers moving on to the Work Programme”. But it did say it could offer clients with existing job offers cash for workwear and travel to help them “sustain employment”.

The DWP seems happy with this state of affairs. In an instruction released in June, the DWP agreed that providers could attach claimants who already have a job offer as long as they have not actually started work. It hopes providers will offer claimants “any support they require to assist in them taking up the employment, for example, clothing, initial travel expenses etc”.

When Hodge confronted DWP permanent secretary Robert Devereaux about the money-for-attachment wheeze in a parliamentary hearing, he claimed to have “relatively tight rules about not putting people on the programme who already have a job”. However, Devereaux later appeared to justify the payments, saying that even where contractors do nothing to get a claimant into work, they might “assist him in staying in work over a long period, rather than coming back, at the taxpayer’s expense, on benefit”.

The DWP’s generosity may stem from a wider Work Programme crisis. Early results suggest the contractors are only finding work for 24 percent of referrals, and government calculations suggest that more than a quarter of these would have found jobs without help. Making these apparently un justified payments may be a way of bailing out a failing scheme.

It’s great that the Eye credits Ipswich Unemployed Action in this piece. Much of their material is extremely good, and linked to other groups supporting the disabled and unemployed up and down the country.

As for the payments being a way for the government to bail out a failing scheme, this seems to be exactly correct. I’ve published a later piece by the Eye, which argues that it is only through such fraud that the workfare firms can make a profit. And the good Mr Void in his posts has repeatedly made the point that you are far more likely to get a job on your own than on workfare, no matter what fantasies IDS may tell the public.

Workfare is exploitative, expensive and based on fraud and coercion. It should be axed. Now.

Private Eye: Economics of Outsourcing Demand Overcharging

This is another old story from Private Eye, this time from their edition for 26th July – 8th August 2013. This examines the scandal of the major government outsourcing companies overcharging the government for their services. The Eye concludes that the economics of outsourcing are such that the companies really have no chance of making a profit, except by overcharging.

Scandals such as overcharging by the taggers at G4S and Serco and dodgy job placements by A4E, not to mention appalling incidents like the death of deportee Jimmy Umbenga at the hands of G4S, raise the question of whether outsourcing is not simply a rip-off for taxpayers.

Governments repeatedly claim to make huge savings by awarding contracts to private firms on the strength of bids that come in way below existing public sector costs. Figures obtained by the Eye for the outsourcing of Birmingham prison to G4S in 2011 for example, show the Ministry of Justice expecting to shave £139m off what would have been the £610m cost of running the prison itself over 15 years, an expected 23 percent saving.

At the same time G4S’s accounts show that it only satisfies the stock market if it makes a gross profit margin, ie return on outsourcing contracts, of more than 20 percent. For such numbers to work, the actual cost of providing a once public service must fall by more than 40 percent when taken over by the private sector.

Even those who swallow the line about greater private sector efficiency (and not many who have dealt with the companies do) would recognise this as impossible. The result is that outsourcers simply must overcharge or under-deliver. Just as it is gradually dawning that the banking industry was – maybe still is -implicitly corrupt (relying on “mis-selling” and rate-rigging, etc, to hit its returns), so too looms into view the great outsourcing ramp.

This reinforces my opinion, and those of commenters like Jeff3, that outsourcing and public-private partnerships aren’t about saving the taxpayer money. They are about giving government money to subsidise their friends, partners and employers in business.

It’s intrinsically corrupt and economic. It should be discontinued immediately.

From 2012: Another Workfare Company Guilty of Fraud

I’ve posted up several pieces recently on fraud by the welfare-to-work companies, and the way the system is actually designed so that it is highly vulnerable to such crime. The National Audit Office was well aware that the system would almost certainly fail, and suggested ways in which it needed to be bailed out. An article from a previous issue of Private Eye that I posted up yesterday stated that five workfare companies had been reported to the police for fraud. The charges, however, were eventually dropped, either through sufficient evidence to secure a conviction, or because it was deemed ‘not in the public interest’. Private Eye in their issue for the 13th – 26th July 2012 published this article about fraud by yet another workfare company, the Real-Time Training Group.

Workfare
The Real Steal

Yet another company has been using the government’s lucrative skills, training and workfare contracts as an easy way to gain large amounts of taxpayers’ money in return for, er, not delivering.

The latest to join the dubious ranks occupied by A4E, Working Links et al in cashing in at the expense of those seeking to improve skills or find work is the Real-Time Training Group (RTT). It has just gone into administration amid allegations of fraud and wrongdoing, leaving staff unpaid and apprentices and those on skills courses in limbo.

The Skills Funding Agency (SFA) declined to respond to reports that an RTT audit had found irregularities and that the agency was seeking to claw back money wrongly claimed for “successful” work and training placements. A spokeswoman would only confirm that it had terminated the company’s contract, believed to be in the region of £3m.

Castle Donington-based RTT, which names various members of the Barton family (John, Jennifer, Michael and James) as directors and company secretary, claims to have been delivering “world-class training and learning” thanks to contracts with the Department for Work and Pensions and funding the European Social Fund as well as the SFA.

One insider told the Eye that course have been run by people who have no qualification to do so; “learners” have been signed up for courses on the basis that they would obtain qualifications and licences to work, for example in the security business, when RTT was not entitled to provide them; that others had been incorrectly assessed for basic numeracy and literacy qualifications so that they take more courses than necessary; and that people who did not meet the usual criteria had been signed up to qualify for hard-to-employ enhanced payments of up to £1,000 per person.

He said he was instructed to forge papers for the “Train to Gain” programmes aimed at improve the skills of those in work, when those recruited were all job-seekers.

The Eye tried to put these allegations to RTT by email and by phone. But reply came there none.

Private Eye also posted up a piece, which I’ve also blogged, pointing out how poor the standards of companies like Working Links and A4E were in the educational courses offered to job-seekers. These were actually far below the standards of the vast majority of this country’s schools, as assessed by Ofsted. This is another piece of evidence showing that private industry does not lead automatically lead to higher standards, as well as showing the massive potential for fraud in the welfare-to-work sector.

From 2014: Private Eye on Fraud by Workfare Companies

A little while ago I posted a piece about how a group of employees at one of the workfare companies were caught fiddling the figures in order to get taxpayers’ money for people for whom they had not actually found work. According to this article in Private Eye last year for the 24th January – 6th February, they weren’t alone by a long way.

Fraud Popular

The Department for Work and Pensions (DWP) has been trying to bury bad news about allegations of fraud on its various welfare-to-work schemes even though some were so serious it referred them to the police for investigation.

According to the department’s Report on Contracted Employment Provision, which was slipped out on the DWP website nearly a year late, and under cover of darkness, in 2012-13 the government received more allegations of fraud by workfare contractors than in previous years. Though the report named no names, it blamed the “substantial media and parliamentary scrutiny” of bad behaviour by firms like A4E and Working Links on the Work Programme and other job schemes.

The DWP believed there was a “case to answer” in five cases, three of which were referred to police. Prosecutions did not follow because “proceedings were considered by the police to be unlikely to result in a conviction or were not considered to be in the public interest”.

The alleged frauds followed the familiar pattern of false claims for fees and falsified documents about what service had (or had not) been provided; and the contractors were simply allowed to pay back the cash. The DWP said none of the dodgy cases related to the Work Programme, but did not say which employment scheme was involved.

According to the report, DWP inspectors also found scant concern among contractors for properly protecting public money from misuse. Of 49 contractors inspected, 29 had “weak” or “limited” assurance levels for handling government cash. Only 20 offered “reasonable” or “strong” protection.

Not surprisingly, the DWP seemed reluctant to trumpet these findings from the rooftop. Though permanent secretary Robert Devereux promised MPs he would produce the report in December 2012, it was actually slipped out on the DWP website with no press announcement last October.

The Eye submitted a freedom of information act request last July asking where it was. We finally received an answer this January – and an apology “for not responding earlier; no discourtesy was intended”. Of course if a benefits claimant took so long responding to the DWP, an apology might not suffice.

Again from 2011: Private Eye on the Failure of A4E

I’ve published a number of pieces from Private Eye over the last few days detailing the colossal failure one of the government’s workfare providers, A4E. They were massively incompetent from the start, and the National Audit Office was also very much aware that the welfare-to-work scheme was so flawed that it was bound to fail, and need bailing out. Here’s another piece from the Eye from four years ago providing more information on the company’s staggering ineptitude.

Yob Creation
Working Beef

With the riots highlighting the urgent need for job opportunities for Britain’s disaffected youth, who can solve Britain’s unemployment crisis? Recent inspections by Ofsted suggest that benefit-busting private firm A4E, one of the government’s favourite welfare-to-work outfits, is not the answer.

Since the Eye first exposed A4E’s shortcomings last autumn (Eyes 1271 & 1272), the firm has been awarded five multi-million-pound contracts to run pensions secretary Iain Duncan Smith’s Work Programme, covering East London, the East Midlands, South Yorkshire, the North West and South East. But three Ofsted inspection reports on A4E schemes are far from encouraging.

The reports rate performance on a scale of one to four; but A4E doesn’t score above a “3” or “satisfactory”. In other words, the company earning millions of pounds of taxpayers’ money to help the jobless was never found to be “good”, let alone “outstanding”. Even when an inspection report into A4E’s management of 8,795 apprenticeships and work-based trainees on the “Train to Gain” scheme was said to be “satisfactory” overall, the trainees still often failed. The inspectors said: “Too many learners still do not complete their programme within the agreed time. The overall apprenticeship success rates have improved slightly over the last three years but are still low. To many learners do not complete their apprenticeship on time. Advanced apprenticeship success rates have declined.”

A re-inspection last year of A4E’s “New Deal” job-finding scheme in Northumberland found it had improved from “unsatisfactory” to “satisfactory”, but this still left many of the unemployed in difficulty. “A4E’s job entry rate increased slightly in 2009/10 but at 26 percent remains below contractual targets,” said the inspectors.

A4E’s work on a “Pathways” scheme in Leeds designed to help 7,000 disabled people on incapacity benefit was also found to be “satisfactory” even though the unemployed were still let down. “Outcomes for participants are inadequate,” found the inspectors, who said A4E’s job-finding skills were “unsatisfactory”.

Given the underwhelming results, why does the government put so much faith in busted benefit-busters like A4E.

In other words, if A4E was a school, it would almost certainly be placed in special measures, along with much media hoo-ha about declining educational standards. It isn’t, but I suspect the Eye’s last question was rhetorical. My guess is that they’re getting the contracts, despite their record of what can only be described as abject failure, because they are Tory donors, sponsoring events and providing support to the particular politicians.