Work Programme now yielding better results than doing nothing (just!)

The DWP published its latest statistics for the Work Programme just before Christmas, and the good news is, it’s now better than doing nothing – but only just.

Click the image to enlarge. The dotted lines show the minimum expected levels. These are based on what would be expected if the long term unemployed were just left to their own devices. The second graph shows the proportion of people who stayed on the Work Programme for 2 years, but who had a spell of employment during that time lasting for 6 months or more (or 3 months for certain groups). Of the almost 1 million people who spent 2 years on the Work Programme, just 28% fall into this category, while almost 70% were sent back to the Job Centre having been failed to be helped into sustainable work. This 28% is a mere smidgeon above the figure DWP thought the long term unemployed would achieve on their own devices. Better than nothing then!

This is a programme that has cost billions, but achieved astonishingly little. When the Work Programme started, the job market was in the toilet, so job outcomes were incredibly low. As the economy started to recover, it became easier to find unemployment people poor quality temporary and/or part time work, so the job outcome figures have picked up (while still remaining poor). In effect all it has done has transferred public resources into the hands of private outsourcing companies like Serco and A4E, who do little more than cherry pick the easy cases, while ignoring the rest. The job outcome figures for those who have come to the Work Programme via sickness/disability type benefits has been particularly poor, achieving barely half the job outcome rate deemed achievable without any intervention at all. A lot of these people are probably not well enough to be actively seeking work, but the Work Programme is failing badly for those who may be ready to return to the workplace.

Instead of wasting resources on pretending people can be got back into employment through improving their ‘soft skills’ or CV writing abilities, why not actually create some jobs?

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Is IDS about to be given his marching orders?

There is a rumour going round this morning that David Cameron is planning a reshuffle next week and that Iain Duncan Smith will be removed as Secretary of State for Work and Pensions and replaced with Esther McVey. Is it true? Who knows. It seems to have come from an overheard conversation on a train, so could be bollocks, but I guess we’ll find out next week…

@CllrSutton @CllrPaul4Cowick My update for those who can't see it… pic.twitter.com/ARHuRMeeBq

— Sarah Quinney (@ninjalampie) July 11, 2014

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.

 

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:

Self employment, money and post-crash economics

My weekly list of links returns. This week, blogs on economics, food banks housing and self-employment. First up, here’s Flipchart Rick with a blog on the remarkable increase in self-employment over the last 12 months:

Self-employed – the nouveau pauvre

On food banks now, and following the Mail on Sunday’s ‘expose’ of food banks, a couple of weeks ago, here, the manager of a food bank responds:

“We will always err on the side of compassion”

There’s been a real trend over the past year of TV docs focusing on poverty and aspects of the social security system. The latest is called “How to Get a Council House” as Jules Birch explains here:

Adjust your set

Here’s a couple of blogs on the DWP. The first details problems surrounding the new Help to Work scheme which aims to bully people into work, and the second is an interview with a Jobcentre Plus advisor:

Chaos at the DWP as bungled Help to Work scheme attempts to launch

Jobcentre Plus advisor: “The reforms have been designed to hide the numbers of unemployed”

Economics now, and there’s a couple of interesting (to me) debates going on in economics at the moment that are getting a bit of attention in the blogosphere. The first is over the nature of money and the role of banks in our society. This blog at Positive Money is quite a good summary of the debate (although I take the other side to them):

The debate on money reform goes mainstream

Another debate in economics has been kicked off following the publishing of a book called Capital in the Twenty-First Century by French economist Thomas Picketty. Larry Elliot in the Guardian explains the hype here, and this book does seem to have single handedly put the issue of inequality back on the table. This could potentially be quite significant as it gives academic respectability to any politician wishing to do something about inequality.

Finally, a third significant event in economics was the publishing of a report by some students at Manchester University into the state of economics teaching at their university. A lot of it chimes with my experience of studying economics (although reading the report, I think my course was probably a lot better). The response from academics has been interesting, mostly denying there is a problem, or playing down the issue. Here’s a good blog suggesting an alternative approach and discusses the response from mainstream economists:

Post-crash economics clashes with ‘econ tribe’

 

Michael Meacher’s Speech on Benefit Sanctions

There was a backbench debate in the House of Commons today on the DWP’s use of benefit sanctions. The official line is that claimants are only ever sanctioned if they are not doing what is required of them to either find work or prepare for work. The strong suspicion however is that sanctions are being used primarily to get people off benefits. Labour MP Michael Meacher opened the debate with a speech in which he gave numerous examples of where claimants have been sanctioned through no fault of their own, and highlighted the impact this can have on people’s lives. Here is the text of the first part of his speech (from Hansard):

“I beg to move,

That this House notes that there have been many cases of sanctions being wrongfully applied to benefit recipients; and call on the Government to review the targeting, severity and impact of such sanctions…

…From the evidence that I have collected from my constituency surgery, Citizens Advice, YMCA, the excellent Work and Pensions Committee report on this issue and the Library, it is abundantly clear that the standards that the DWP likes to claim always apply in sanctioning cases far too often certainly do not. I wish to cite a number of cases drawn directly from those sources.

A security guard at a jobcentre turned away a man with learning disabilities who had arrived 20 minutes early to sign on. The man then returned two minutes late to sign on and had his JSA sanctioned for 4 weeks.

A man was sanctioned for four weeks because he had not known about an appointment as the letter had been sent to an address that he had left a year ago, even though Jobcentre Plus was aware of his current address.

A woman claiming employment and support allowance had been diagnosed with cervical cancer and had given the back-to-work scheme provider a list of her hospital appointments. She was sanctioned for failing to attend an appointment on the middle day of her three-day hospital stay. The woman had two daughters but her ESA was reduced to £28 a week. She asked for reconsideration, but had heard nothing five weeks later.

A woman was sanctioned for failing to attend provider-led training when the receptionist had rung to tell her not to come in because the trainer was ill. She was subsequently told that she should have attended to sign the attendance register.

A woman whose ESA was sanctioned had her benefit reduced from £195 to less than £50 per fortnight because she missed a back-to-work scheme appointment owing to illness. Her sister had rung two days beforehand to say that she could not attend and arranged another date, when she did attend.

An epileptic man had his JSA sanctioned for four weeks because he did not attend a back-to-work scheme meeting as his two-year old daughter was taken ill and he was her sole carer that day. He rang the provider in advance, but was told this would still have to be noted as “did not attend”. During the four-week sanction he suffered hunger, hardship, stress and an increase in epileptic attacks, but he was not told about hardship payments or food banks or how to appeal the sanction decision.

Lastly, a man in Yorkshire and Humber was sanctioned for allegedly failing to attend back-to-work scheme events. He had in fact attended, and the provider had no record of any failures. His hardship request was not processed, his housing benefit was stopped, and he fell into rent arrears and had no money for food, gas or electricity.

These are not isolated or exceptional cases.”

There seems to be the beginnings of a bit of cross-party opposition to the DWP’s behavior with regards to sanctions, and I believe an independent review into their use is under way. While I don’t expect it to result in huge change, if it ultimately means fewer sanctions, then some good will have been done.

 

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?

Farmers, floods, and fraud

A good mixture of links this week in this, my 100th blog post. We start with the floods, and a reminder from George Monbiot that ‘cutting red tape’ can have unintended consequences:

How we ended up paying farmers to flood our homes

The Scottish Independence Referendum has been in the news this week and the debate is hotting up. Alex Salmond wants to keep the pound, but the three main UK parties have all (rightly) said no. Salmond has accused them of trying to scare people into voting no, but here’s why, for an independent Scotland, keeping the pound would be a very bad idea:

Scotland under Sterling is not truly independent

News now of the conviction of 4 A4e staff who claimed money fraudulently on one of A4e’s welfare to work contracts. This is what happens when ‘performance by results’ comes up against the reality of not enough jobs – cheating:

Guilty: The four A4e staff who fiddled the books helping lone parents get back to work

Another story on the bedroom tax now, and news that landlords are beginning to actually help tenants to appeal:

Bedroom tax is appealing: cc all social landlords

This is a nice post looking at what it’s actually like to be out of work and being required to sign on at the job centre. Not nice:

More #JSA stories from jobcentres: “It’s impossible. You’re trapped.”

Related to this, it’s becoming increasingly clear that Jobcentre Plus is no longer concerned with finding people jobs, focusing much of it’s attention instead on simply finding grounds to kick people off JSA. There are stories of staff there being disciplined for not sanctioning enough claimants, and over 800,000 people were sanctioned last year. The number of appeals is high though and over half of these are successful. Now it looks like DWP want to address this not by making better decisions, but by limiting the ability of people to appeal. Are they losing their grip?:

People stripped of benefits could be charged for challenging decision

Bankster news now and another reminder that the increasing power of the banks is incompatible with either democracy or the public good:

Predator Banks Enter Brave New World of Epic Scams and Public Hasn’t Got a Clue

Finally, we end with more ‘disappointing Labour news’, as it’s revealed their flagship policy to help the long term unemployed will only be funded for one year. I have a number of issues with this policy idea, but at least it would put back on the map the idea that governments can (and should) get involved in job creation. It seems though this is another big policy that’s in the end just more PR:

Labour ‘jobs guarantee’ promise limited to a year

Last 7 Days Reading List 30/11/13

I’ve decided to do a regular Saturday post linking to some of my favourite articles or blog posts from the last 7 days. Here’s the first list:

The DWP has been in the news this week for various reasons. First up, universal credit and the IT system that is a ticking timebomb. Computer Weekly interviewed a former DWP consultant who explained the departments inability to ensure IT services are procured well:

Disaster at DWP

The DWP’s Work Capability Assessments came back under the microscope, with a number of suicides linked to the loss of benefits being highlighted in the media and on the blogosphere:

Second Suicide Linked To Welfare Reform Reported This Week: RIP Victor Cuff

Information Commissioner rules on the cover up of DWP-related deaths

Also on the DWP, disability rights campaigner Sue Marsh sets out the refusal of DWP to engage with disabled people about cuts to welfare and on the WOW petition campaign which has nearly reached 100,000 signatures:

WOW Petition – Nearly There

Moving on now from welfare reforms and on to the economy in general, which is the stated reason for welfare cuts. Lord Skidelsky wrote a very clear and accessible rebuttal against the arguments for austerity:

Four Fallacies of the Second Great Depression

In a post on ‘debt overhangs’, Bill Mitchell pours a fresh dose of scorn over Excel spreadsheet wizards Rheinhart and Rogoff:

Been searching for a public debt overhang – didn’t get far

More politics now, and I liked this post from Puffles about the difficulties political parties continue to face with how they use social media:

Do Labour party chiefs know how to use ‘priceless’ social media?

Boris Johnson made a widely criticised this week in which he informed us of his views on inequality and IQ. Hopefully a few people will have seen this and realised that maybe voting for someone because they make them laugh might not be the best idea. Two blogs from Chris Dillow on Johnson’s speech are well worth reading:

Inequality and Growth

IQ and Equality

Employment now, and this Buzzfeed article was quite good, highlighting the 9 worst unpaid internships in Britain. I think my favourite is the one at Reading Football club:

9 Of The Worst Unpaid Internships In Britain

Finally, and not related to what I normally blog about, a couple more links that caught my eye this week. First up, a nice interview with Charlie Brooke, talking about his new documentary on video games being shown tonight on Channel 4:

Charlie Brooker on why video game television is so hard to make

Lastly, footballer Ryan Giggs turned 40 this week. I’m not much of a football fan any more, but as an 8 year old boy, the year Giggs made his debut, I was a mad keen Man Utd fan. That he’s still playing at the top level (and for the same club) is an amazing achievement, and I thought this was a nice little interview with the man who first discovered Giggs:

Ryan Giggs, by the milkman who discovered him

DWP offers intensive support for any dog failing to find a bone after 2 years

The title above refers to this press release today from the DWP:

Work Programme leavers targeted by specialist advisers as part of a tough approach to get them into a job.

A more honest title would end with “… a tough approach to get them off Jobseeker’s Allowance”, as getting someone a job seems to come a distant second to those at the DWP.

Anyway, the press release is about what action will be taken once the private sector Work Programme provider has failed to find work for someone (or bullied them into being chucked off JSA) after 2 years (!!!). Apparently, those poor souls are going to be “targeted by a hit squad of specialist advisors”, which doesn’t sound too pleasant, but also begs the question of what the hell the Work Programme provider has being doing for the previous two years.

It all comes down to the same idiotic idea that the unemployed don’t have work because of personal deficiencies rather than a systemic lack of jobs, and if only the right attitude can be instilled into the individual, then a job will instantly appear. The problem with this is that it’s a fairy story. At the moment, there’s about half a million vacancies, but 2.5 million unemployed, another 2.5 million classed as inactive but want a job, and 1.4 million who are underemployed. If we send out 100 dogs to find 10 bones, most are going to come back without one, and no matter how much ‘intensive support’ we give give those dogs, unless we increase the number of bones, the same amount will come back without one next time (although maybe not the same dogs).

So rather than wasting £30m on this intensive support package (or the £5bn on the Work Programme for that matter), why not just create some jobs? What, more public sector non-jobs I hear you say? When there is spare capacity, a non-job is always better than no job at all, but with a bit of imagination we could think of much more productive things for people to do. This should be a statement of the bleeding obvious, but apparently it’s still quite a minority view. Politicians seem to much prefer to compete to see who can sound the toughest, rather than who can actually solve problems which doesn’t inspire hopes of a quick recovery any time soon.