40% of payments to Work Programme providers have nothing to do with results

The DWP published this ad-hoc release last week. It very briefly details how much money has been paid to Work Programme providers from when it began up to 31st March this year. Providers are the (mainly) private sector organisations contracted by the DWP to help the long-term unemployed find work. In the DWP release it says:

“The Work Programme is predominantly a ‘Payment by Results’ model”

The Government have been keen to trumpet this feature, claiming that providers only get paid if they are successful. In fact though, since the Work Programme began, 39% of the money paid to providers has come from the ‘attachment’ fee. That’s a payment paid when an unemployed person starts the Work Programme with a provider. For the first year of the programme, the attachment fee was £400, the second year it was £300 and for the year just gone, £200. From July, the attachment fee will no longer be paid. To date then, on this “paid by results progamme”, the Government has paid providers £538m (out of a total of £1.372bn) just for taking people on their books and before they have helped a single person into work.

With this payment for doing nothing now ended, will we see Work Programme providers start to walk away?

On this 2nd DWP release, it says that over the same period, there have been 296,000 job outcomes. The DWP defines a job outcome as a job that is sustained for at least 6 months (or three months for certain groups). Doing a quick calculation based on the attachment fees paid, it looks as though around 1.72 million people have been attached to the Work Programme since it began, so that means only about 17% (1 in 7) have found work lasting at least 6 months. Not a great return for a spend of £1.4bn, particularly when you think that a lot of these people would have found work anyway.

 

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Glenda Jackson goes to town on the incompetent IDS

There was a debate in the HoC yesterday on the performance of the DWP, an government department which, if it were a school would have been placed in special measures long ago. Ministers were keen to play down any suggestions that they might be getting anything wrong, while Labour MPs were keen to raise individual cases where pretty awful errors had been made. Glenda Jackson in particular made a decent stab at calling IDS out for the attitude of his department. Here is her speech taken from Hansard:

The hon. Gentleman will in future regret taking such pride in his Secretary of State. We have all become used to the way in which the Secretary of State avoids answering any kind of direct question or actively engaging in any of the serious issues about the destruction of the welfare state and his Department’s total and utter incompetence by opting for a self-serving, sanctimonious sermon as opposed to any direct speech. I seem to recall, to go back a very long way, that he stood at the Dispatch Box and avowedly took exclusive responsibility for the delivery of everything from IT systems to universal credit in order to take people out of poverty, when what he has in fact done is to plunge thousands and thousands of our fellow citizens into the most abject penury.

Today, the Secretary of State still managed to avoid any kind of reference to the realities of the situation for all those people affected when Atos had its contract for the work capability assessment renewed many months ago. I distinctly remember that the Select Committee was quite forensic in examining how Atos would prioritise, as the Secretary of State and the Government told us it would, the needs of disabled and vulnerable people, particularly those with mental health difficulties. Atos confirmed that that would be an absolute target. There would be champions for people with mental health difficulties and detailed examination of every single individual who came forward for a work capability assessment. Despite the Harrington recommendations, to which the Secretary of State referred, there have been no marked improvements for people who are waiting for ESA—we have already heard those figures.

I will give a precise example of just how chaotic the system is. One of my constituents, who is paraplegic, was placed on ESA. Another constituent is 26 years old and has the mental capacity of a six-year-old, and is consistently having to go for work capability assessments. I find it absolutely impossible to believe that Government Members have no constituents coming to them in similar or even worse situations; yet they find the points made by my hon. Friend the Member for Leeds West (Rachel Reeves) hilarious. They find it really funny that we have seen an explosion in food banks being used by people who are working.

I point out to the Secretary of State that he furnished absolutely no evidence—no Government Member did—that the jobs that all Government Members are trumpeting have been created during his sovereignty of the Department for Work and Pensions are actually being created by his policies. Other Government Members trumpet that the new jobs are being created by the private sector.

One certain thing in an uncertain world is that 48% of appeals—I am talking about ESA; I do not want there to be any confusion—are upheld, yet people on ESA are waiting for months before their appeals are heard. During that period they are told to apply for jobseeker’s allowance, but they cannot do so because they are told that they are unfit for work. They are therefore without any financial support at all. As my hon. Friend the Member for North East Derbyshire (Natascha Engel) said, the welfare state was created to protect people from falling through the cracks. But this particular Secretary of State, along with his Department, is pushing people through those cracks and hoping that the rest of the country will not notice that they have disappeared. I believe that the rest of the country is noticing that—that it is the most vulnerable in our society who are being punished.

That is a shame and an utter disgrace for the Secretary of State. At some point I am pretty certain that he will claim that he can walk on water, but he cannot. His Department is not delivering any of the promises that were made, not to the Opposition but to the people of this country. People are being maligned and bad-mouthed. It is being presented to the country as though there are plenty of jobs out there for those people but they are too idle ever to take them. That is not the case, as Government Members know, and as the Secretary of State should know. Perhaps he is floating so high in his self-appointed sanctity that he has forgotten what is actually happening out there in this country as a direct result of his incompetence and failure to accept his responsibilities.

UPDATE. Here’s a video of the speech:

Backlog of assessments for ESA. Double the passport backlog, but none of the coverage

Via the Vox Political blog, I learn that it was admitted yesterday by the DWP that there was a backlog of 700,000 assessments for ESA claims. ESA is Employment and Support Allowance, a sickness benefit for those unable to work. 400,000 of the 700,000 backlog are new claims – that is people who feel they are too sick to work have lodged a claim for ESA, but have not had their claim assessed. While they wait, they have to make do with a lower level of benefit. The longer they have to wait to be assessed, the more anxious they are likely to become, risking exacerbating their health problems. The risk of falling into serious hardship also increases the longer they have to wait. The remaining 300,000 will be existing ESA claimants awaiting re-assessment of their claims. Any delay there brings with it the stress and worry of not knowing whether the outcome of this reassessment may mean their ESA is removed altogether.

I raise this now because at the same time, this week there has been wall to wall coverage of the Passport Offices backlog of about 300,000 passport applications. I don’t want to diminish the seriousness of this issue. Delays in processing applications could cause people to miss holidays they had saved up for, to miss weddings, funerals, or job interviews. It needs sorting out. At the same time though, it doesn’t seem in the same league as the ESA backlog, and yet a search for “Passport Office backlog” on Google News yields 13,400 results, while “ESA claims backlog” shows only 7 results.

The Labour Party have been jumping up and down about the passport issue (even though they had the same problems while in office), but on ESA (with a couple of exceptions), they have been silent. I suppose it isn’t surprising they go for the easy option, but it is rather sad.

The failure of the Youth Contract should be a lesson for Labour

I just noticed today (because there was no publicity), that the DWP have published some data and research on the Government’s ‘Youth Contract’. This was the Government’s response to youth unemployment, launched to huge fanfare by Nick Clegg in early 2012. The program has been running for nearly two years now, so this latest from DWP gives us a good idea how it’s been working – not well.

The idea was to offer up to 160,000 wage incentives of up to £2,275 for employers taking on an 18-24 year old unemployed person. In addition, the Youth Contract was to provide for an additional 250,000 unpaid work experience places. The program runs until 2015. So what has been achieved to date?

This document gives the outputs for the first 18 months (up to Dec 2013). It says that there have been 65,000 ‘wage incentive job starts’ (remember the target was 160,000) since April 2012, but actual full subsidy payments made (i.e. a young person has worked for an employer for 6 months) only total 4,140 so far. That is horrendously bad. Why the 65,000 starts hasn’t been converted into more final payments isn’t clear.

They did a little better at getting people into unpaid work experience. 100,000 young people have been subjected to that since April 2012.

So those are the raw numbers, but how effective has the program been in terms of creating jobs and getting young people into work? The DWP published two pieces of research at the same time as the data above, one surveying employers involved in the wage incentive scheme, and one surveying participants on the work experience element of the Youth Contact.

The employers survey showed that just 19% of job vacancies were extra vacancies that wouldn’t have existed without the subsidy and another 15% were influenced in their choice of candidate (i.e. they hired a young unemployed person so they could claim the subsidy). This represents a huge ‘deadweight loss’. 81% of the job vacancies would have existed anyway without the Youth Contract, and employers probably would have hired a young unemployed person regardless in 85% of cases.

So we have a program that (on the wage subsidy element) has only paid full subsidy for 4,000 jobs (against a target of 160,000) and of those 4,000 jobs, only about 800 were brand new jobs that wouldn’t have existed but for the Youth Contract. Not very impressive Mr Clegg.

But why has the program been so unsuccessful? In contrast, the last Labour Government’s ‘Future Jobs Fund’ managed to create over 100,000 temporary jobs in about 18 months. These were overwhelmingly in the public and third sectors and the subsidy was over double the Youth Contract subsidy (about £6,000 from memory). So why hasn’t the Youth Contract achieved the same results? Is is because the subsidy wasn’t high enough to cover all the costs of employing a young person? Is it because the subsidy isn’t paid until the person has been working with an employer for 6 months? Is it just that employers won’t take someone on unless they really need someone, even at a reduced cost? I think the fact the Government have tried to do this on the cheap goes some way to explaining it, but why it’s failed so spectacularly, I’m not quite sure though.

These results should give the Labour Party pause for thought though. Their idea is for a compulsory job guarantee which would place long term unemployed people in paid employment in the private sector. The private sector hasn’t responded that positively to the Youth Contract, so why would it to Labour’s scheme? And most of the jobs created under the Youth Contract can not be called ‘new’ so is it really a good idea to subsidise private sector employers to do what they were already going to do anyway? At best you would get a small pack-shuffling effect, when what’s needed is an increase in the total number of jobs. Time for a rethink?

“The moral case for welfare reform”

A few days ago the country’s most senior Catholic, Archbishop of Westminster Vincent Nichols raised some objections about the Government’s welfare reforms in comments to the Daily Telegraph. I don’t think we should pay attention particularly to what religious leaders say (about anything), but in this case, the Archbishop was merely stating the obvious. Basically, he said that the reforms were leaving some people destitute (they are), that the reforms are primarily about saving money (yes), and that the reforms are not working (depends on how you define ‘working’).

This seems to have upset David Cameron enough for him to ask the Telegraph for a right of reply. Here’s his article and he tries to answer the Archbishop with a moral argument. His argument is a textbook example of the conservative ‘strict father figure’ framing I’ve been banging on about recently. Here’s some extracts:

“First, our long-term economic plan for Britain is not just about doing what we can afford, it is also about doing what is right. Nowhere is that more true than in welfare. For me the moral case for welfare reform is every bit as important as making the numbers add up: building a country where people aren’t trapped in a cycle of dependency but are able to get on, stand on their own two feet and build a better life for themselves and their family.”

“Those who can’t work will be always supported, but those who can work have the responsibility to do so. “

“I believe very firmly that it is wrong to penalise those who work hard and do the right thing while rewarding those who can work, but don’t.”

In this version of reality (which Cameron may actually believe), it’s not necessarily the people that are to blame, but the evil system which makes people ‘dependent’, even rewarding them for “not making the right choices”.

So the system is immoral and must be ‘reformed’ to ‘make work pay’ and create the right incentives to ‘work hard and get on’. This is classic conservative moral framing, but what Cameron doesn’t mention is the enormous elephant in the room – jobs (or lack of them).

I might have some sympathy with Cameron’s position if there were more job vacancies than people looking for work, and those people were turning down work left, right and centre, but the maths just isn’t in Cameron’s favour. We’ve got around 4.5 million people without a job who want on and over a million more in part time work who’d like a full time job. At the same time, there are just half a million vacancies. Against those numbers, if you cut the amount of money people receive in social security benefits they will just get poorer. They can’t find jobs that don’t exist no matter how hard they try.

So to re-state Cameron’s case: when people stand on their own two feet, work hard and do the right thing, they will succeed, but the evil welfare system makes people lazy and dependent so must be weakened.

So how could we frame this differently? I always think Owen Jones is on to something when I hearing him talk about housing benefit. When is a discussion about how we need to get the housing benefit bill down, he just agrees strongly, but says it should be done by tackling private sector rents and building more houses. Housing benefit should be reframed therefore as landlord benefit. People don’t like feeling like they are being screwed, but anyone who is renting privately strongly suspects they are being. Jones hasn’t quite got his delivery down though I don’t think. It’s a bit machine gun with too much spraying of facts and figures, which probably won’t change anyone’s mind. I think his overall strategy is sound though.

On the welfare system as a whole I think the reframing might go something like this.

“The welfare system needs updating for the 21st Century, but to do so we need to understand the problems. The welfare state we know today was established under the assumption of full employment. That assumption no longer holds. There are simply not enough jobs. We need to rediscover what full employment means and government has a big role to play in that. Young people need paid work experience. People who’ve been out of work for a long time need a chance to get back into the workplace and update their skills. The private sector has consistently failed to perform in this regard, so where the private sector can’t or won’t offer these opportunities, government can and should. As Keynes said:

“The Conservative belief that there is some law of nature which prevents men from being employed, that it is “rash” to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable – the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years…

It’s time to unfuddle our heads. When we talk about people having a responsibility to work if they can, so government has a responsibility to ensure that work is available and that it pays well enough to sustain people in a lifestyle appropriate for a rich country.”

I’ll finish this with a quote from a recent Jack Monroe article which is a pretty good antidote to this ‘work hard and get on’ nonsense:

“Poverty can happen to anyone. That’s why I unsettle some of the stalwarts of the Tory party. Because their rhetoric of “work hard and get on” can fall apart in the blink of an eye. I worked hard. I got on. And I still spent a year and a half scrabbling around in a festering pit of depression, joblessness, benefit delays and suspensions, hunger, and the entrenched, gut-wrenching fear that I was failing as a parent.”

 

Are cuts to social security moral?

A lot of people would answer no straight away to this question, but stay with me. I’ve just started reading George Lakoff’s “Don’t think of an Elephant!” which is about how people view the world through different ‘frames’ and how political parties seek to exploit these frames in their political messaging. Lakoff’s central thesis is that those with a conservative world view frame things from the point of view of a strict father figure, while those of a more liberal persuasion frame the world from the point of view of a ‘nurturant parent family’.

So what is meant by the strict father figure frame? Lakoff explains:

“In this model there is also a definition of what it means to become a good person. A good person – a moral person – is someone who is disciplined enough to be obedient, to learn what is right, do what is right and not do what is wrong, and to pursue her self-interest to prosper and become self-reliant. A good child grows up to be like that. A bad child is one who does not learn discipline, does not function morally, does not do what is right, and therefore is not disciplined enough to become prosperous.She cannot take care of herself, and thus becomes dependent.”

To bring it back to the title of the blog then, for those who view the world though the strict father frame (a conservative viewpoint), cutting social security is a moral position, because a Lakoff also writes:

“Consider what this all means for social programs. It is immoral to give people things they have not earned, because then they will not develop discipline and will become both dependent and immoral. This theory says that social programs are immoral because they make people dependent. Promoting social programs is immoral.”

This strikes me a quite a good description of the language Tories like IDS use when discussing social security. They talk about ‘welfare dependency’ as though it’s a great societal evil, and separate people into those who are deserving of help and those who aren’t. They talk about people who ‘want to work hard and get on’. The Tories are for these people. This all implies that if people have the discipline and drive to succeed, then succeed they will. Any failure to do so must be down to the personal failings of the individual. I think this last point was quite eloquently dismissed in a blog by Jack Monroe today, but it is an idea that many people undoubtedly subscribe to, and the right are extremely proficient in pushing these kinds of messages, while the left are poor at pushing their own. Witness Labour’s almost total inability to defend the welfare state and it’s acceptance of this strict father framing.

I suppose my point then is that a lot of people seem to assume the cuts to social security are because the Tories are evil, or because they want to shift resources from poor to rich. Maybe there are elements of that, but I think for politicians like IDS, they genuinely do believe what they are doing is morally right. The left need to accept that a lot of people agree with him and come up with strategies to reframe the debate.

A lack of jobs not aspiration is the cause of youth unemployment

FACT: Youth unemployment is so high because there aren’t enough jobs.

This seems to be so obvious, you might be wondering why I feel the need to write a blog about it, but a large proportion of the Tory Party don’t seem to accept this. David Cameron announced at his conference this week his (unworkable) plans to deny all social security benefits to those under 25. Instead they must ‘learn or earn’. Implicit in this idea is that most young unemployed young people are out of work by choice, and removing the option of social security to these people will solve the problem. I don’t know whether they really believe this or not, but it’s a total myth.

When the economy is weak and unemployment is high, employers can afford to be more picky in their hiring. There are often numerous highly skilled or experienced people applying for the same vacancies as young unemployed people. Taking on the young person becomes a risk for the employer. Young people are moved to the back of the queue, and move further back the longer they are out of work. Even as the economy recovers, the young, the old and the long term unemployed still struggle to find work. It has nothing to do with aspiration or the choice to live a life on benefits.

The current stats bear this out. Including ‘inactive wants a job’, there are around 5 million people wanting a job but can’t find one and a further 1.4 million who are working part time but the ONS says there are just over 500,000 vacancies available currently.

So this latest idea from the Tories is ridiculous. To repeat, there just aren’t enough jobs.

Benefit Cap Bullshit

Iain Duncan Smith got himself into bother a while back when he claimed DWP research showed that as a result of the benefit cap being announced, 8,000 people who would be affected by it have found work. The UK Statistics Authority disagreed however saying the claim “is unsupported by the official statistics…“. When finally challenged about this on the Today programme this morning, this exchange followed (JH is John Humphrys):

JH: “The problem is that you made claims about how things were changing on the basis of the trials that were being carried out and all the rest of it, and they turned out not to be well-founded. You said we’ve seen already, already you said, this is a statement you made in May, already we’ve seen 8,000 people who would have been affected by the cap move into jobs. But when the National Statistics Authority looked at that, they said ‘not true’.”

IDS: “No, what they said was that you can’t absolutely prove that those two things are connected.”

JH: “Your statement is unsupported by the official statistics published by your own department.”

IDS: “Yes but by the way, you can’t disprove what I said either. The reality is [interruption] no, no, no, let me finish. There’s an answer.”

JH: “You can make any claim on that basis.”

IDS: “I am, I believe that this to be right. I believe that we are already seeing people go back to work, who were not going to go back to work until they were assured of the cap. Look we just published some polling today, John, on this very group.”

JH: “Polling isn’t statistics.”

IDS: “Hold on let me just give you this. We polled and we found that something like 72% of those who report have been very infrequently in work in the past since being notified by the cap have gone back to work. I believe that this will show, as we go forward, that people who were not seeking work are now seeking work because that’s the way to avoid the cap.”

So first IDS says don’t worry about the evidence, because he believes it’s true, but then cites new research which he claims also supports his assertions. Does it though? Here is the report IDS cited this morning. Ipsos Mori undertook telephone interviews with 500 of the 8,000 people who had found work since the announcement of the benefit cap to try to show that people had been motivated by the cap to find work.

The problem is that they did not find that. Remember, IDS originally tried to claim that all 8,000 had moved into work because of the benefit cap. The survey found though that 15% of them hadn’t even heard of the benefit cap, and another 31% only knew a little about it. Only 57% remembered being informed that the cap would affect them, and of these, 71% were already looking for work.

About half of those who remembered getting a letter about the cap took action afterwards. For 31%, this meant looking for work (although half of these were already looking). This means of the 500 surveyed, only around 45 people started looking for work because of the cap that weren’t doing so before. 45!!

Looking at the results then, and if we assume the survey was representative of all 8,000 people, far from being able to say all 8,000 found work as a direct result of the cap, the best that can be said in reality is that about 720 people started looking for work and found it after hearing of the cap that weren’t looking before. Not a particularly impressive behavioral change. On IDS once again, we must call BULLSHIT!

‘There is no credible theory that relates starvation with an increased capacity to gain employment’

In the US a number of states have started to cut unemployment benefit even while unemployment remains high, and here in the UK, George Osborne thinks it is a good idea to lengthen the time newly unemployed people must wait before claiming benefits. At the same time, Jobcentre Plus will start hauling in about 50% of job seekers for weekly interviews. Many people suspect this is designed to find more excuses to sanction claimants and strip them of their benefits. This seems to rest on the theory that if the unemployed cannot rely on the state for subsistence levels of support, they will be more motivated to find work. As an antidote to that viewpoint, here’s an extract from a blog by Professor Bill Mitchell discussing the situation in the US. It equally applies here:

“…there is no credible theory that relates starvation with an increased capacity to gain employment when the economy is some millions of jobs short of the level necessary to provide work for all those who desire it.

Forget the smallest margin of unemployed who do not want to work. They are of a second-order of smallness that doesn’t warrant attention. The overwhelming majority (comprising millions of citizens) want to work but cannot find work because it is not to be found.

Why not? Because there is a lack of spending in the economy. Firms create employment in response to demand for their products. They might be confronted by millions of desperately hungry workers who have just had their benefits cut but they still won’t put them on because there is insufficient demand to justify expanding production.”

Government spin can’t hide the fact the the Work Programme is still not working

I remembered today that the latest Work Programme figures were being published and did my usual thing of looking for the story on the BBC News website. Its article on the figures is entitled “More find jobs on the Work Programme, DWP figures suggest“. I then looked for the DWP press release which was titled “Work Programme transforming lives as number finding lasting work soars to 132,000“. So after the complete failure of the first year, things now seem to be going well. Better than expected even?

But having then found the official statistical release, I  look ed for the Minimum Performance Levels, which I think is the main information that should be highlighted to judge success or failure of the programme. The Minimum Performance Levels are based on what proportion of people would get jobs on their own if the Work Programme didn’t exist. The minimum levels are set 10% above this non-intervention estimate. For the first year, they were set at 5.5% for the three target groups (JSA 18-24; JSA 25+ and ESA new customers).

There is some discussion in the statistical release about how media reporting of the performance failure last year was inaccurate, with it being reported variously that performance was either 3.5% or 2.4% (I did so myself here). So that makes you think Minimum Performance Levels were actually better than reported. In actual fact though, they were much, much worse!

MPLs are calculated over the financial year apparently, so the first year only covered June 11 to March 12. This meant the official performance levels (which I didn’t hear the Government state once) for the first year were:

JSA 18-24: 1%

JSA 25+: 1%

ESA new customers: 0.6%

In total, only 9,000 job outcome payments were made in year 1 out of 687,000 referrals.

Remember, DWP expected 5.5%, and 5% if there was no Work Programme at all!

The 2nd year’s (the first full year) targets were much higher (reflecting that the providers would be well established and would have had much more time to work with clients), but again providers have failed. Here were the performance levels they achieved (with the minimum performance targets in brackets):

JSA 18-24: 31.9% (33%)

JSA 25+: 27.3% (27.5%)

ESA new customers: 5.3% (16.5%)

So the best that can be said is that for JSA claimants at least, the Work Programme is marginally better than nothing, but for ESA new customers, it’s still worse than nothing. Just under half of providers (18 out of 40) are meeting their targets for JSA clients (only just). None met their targets for ESA clients.

You’ll hear a lot of spin about how the Working Programme is ‘transforming lives’, but against the DWP’s own benchmark, it is still failing to meet even the minimum levels expected. So DWP are lauding the success of the Work Programme, but all providers are in breach of their contracts. Time to rethink the whole thing?