Newly released emails show pressure on JCP staff to sanction ever more claimants

There has been a long-running argument about whether the management of Jobcentre Plus (JCP) set targets for benefit sanctions. Ministers are adamant there are no targets for sanctioning people off benefits, while nearly everyone else laughs incredulously and say there quite obviously are. The Work and Pensions Select Committee are currently conducting an enquiry into the issue of sanctions, and recently spoke to the PCS union which represents thousands of JCP staff. Late last week, the select committee published some supplementary evidence supplied by the PCS union, that provides email evidence to show the pressure Jobcentre staff are being put under to increase the number of claimants they are referring for sanctions.

If you read the document linked to above, you’ll be left in little doubt that targets for sanctions exist, and that the management ethos has little to do with getting people into work, and everything to do with chucking as many people off benefits as possible. Rank and file staff are facing disciplinaries for failing to meet targets. This is not based on whether the actual decisions advisors make are the correct ones, but simply how many claimants they refer for sanctions. They are being told that if jobseekers are meeting their Jobseeker’s agreements consistently, they should be made tougher, to increase the chance they will do something wrong so they can be sanctioned.

Here are a couple of quotes from the emails documented by the PCS:

On toughening up jobseeker’s agreements if they are being met by claimants:

“If all your customers are meeting their commitment easily, then challenge them further to undertake more jobsearch activity.”

The targets seem to be for off-flows, rather than off-flows into work (get people off benefits at all cost). JCP workers are singled out for praise if they sanction an unusually high number of claimants:

“The team has achieved 39 off-flows for May 2014 cohort with [name redacted] having a whopping 11. Well done.”

The PCS evidence also reveals unacceptable pressure being placed on claimants of ESA (those judged too sick to work). They note misleading and potentially intimidating letters being sent to people in the support group (who have no prospect of being able to work in the near future), asking them to attend meetings they are under no obligation to go too.

There are also reports of targets to get sick people to undertake work experience, and that businesses are reluctant to take people on these placements, so Jobcentres are resorting to make the claimants do work experience in the Job Centre!

I’d urge you to read the whole document. It’s quite a damning indictment on the management culture within Jobcentre Plus (no doubt in the face of ministerial pressure), the stress that places on frontline staff, and in turn leading to the shameful treatment of the claimants themselves, all so some faceless management bods can tick a box somewhere and get a pat on the head from their boss. Shit always rolls down hill as they say.

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’

 

Poverty porn, appealing the Bedroom Tax and how to rob a bank

The BBC aired another documentary from the ‘poverty porn’ genre this week, where Boris Johnson’s sister, someone off Eastenders, a posh bloke and Theo Paphitis dropped in on people struggling in today’s ‘cost of living crisis’. Here’s two blog posts on issues raised by this show (and others like it):

The Rationale behind Poverty Street Media?

When political issues are reduced to acts of charity

Joe Halewood has been blogging tirelessly on the bedroom tax for months now, and in this post he demonstrates how easy it could be to appeal the bedroom tax:

How to appeal and strangle the bedroom tax – 5 minutes (and you’re almost there!)

For a long time now, it’s been very clear that Jobcentre Plus is no longer worthy of the name. It’s whole operation is now about sanctioning as many people as possible. This blog describes how they may be going beyond what the law allows in their zeal to get people of benefits:

Most jobseeker agreements ruled unlawful – and the DWP doesn’t care

This is a good lay man’s guide to the Ukraine situation:

What Is Going On In Ukraine? An Explanation For the Confused

And here, Neil Wilson blogs on what should happen with the national debt should Scotland vote for independence:

Scottish Independence Myths – The National Debt

In this post, Peter Martin, explains why talk of the need for austerity for years to come is based on ‘muddled thinking’:

Muddled Thinking Watch #1 “We will need decades of austerity not years” writes Philip Booth

Here’s a nice video of a talk by the great Bill Black, explaining “How to rob a bank”.

Finally, yesterday we got the sad news that Tony Benn had passed away at the age of 88. I was excited to go and see him speak a couple of years ago. He was getting frail then, but still in fine form. This 10 minute video is a great reminder that on most things, he was right:

JCP PR fail, Labour MP facepalm and the economics of the 1%

This week’s news has been dominated by the flooding in Somerset and in Surrey. Cameron got his wellies on and sprung into action, promising that “money was no object”. Cynics pointed out that it took until the flood waters threatened the playing fields of Eton before he gave a shit. Here’s some non-flood related stories from the last week.

More on the bedroom tax now, and week by week, this is a policy that seems to be on life-support. Labour have promised to scrap it if they win next year, but it the whole thing may have imploded before we get that far. Joe Halewood explains why here:

Councils cant administer an unlawful policy – The bedroom tax is dead!

Jobcentre Plus news now, and David Henke summarises a big PR failure playing out on social media:

Tweet Wars: How humourless Jobcentre Plus was humiliated by bolshie bloggers

Here’s a nice vid of an interview with economist John Weeks in defense of government:

The Economics of the 1%: Neoliberal Lies About Government

News now of a prominent Labour MP doing something entirely in character for the modern Labour Party, but nevertheless a bit shocking. Lecturers at Queen Mary University in London were part of a national strike over pay, but Tristram Hunt decided to cross the picket line in order to deliver a lecture about socialism! Should he not be standing side by side with workers trying to secure better pay and conditions? Hunt strikes me as the sort of politician who would be comfortable in any party. He doesn’t seem to hold any core beliefs. A pretty typical career politician in other words. Here’s the full story:

Tristram Hunt defends crossing picket line for socialism lecture

Finally, here’s Chris Dillow’s recipe for succeeding in business:

How to succeed

‘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.”

The Youth Contract – Giving public money to private firms in return for?

The Youth Contract is the Coalition’s response to youth unemployment. A key element of the Youth Contract is the offer of a wage subsidy of up to £2,275 to businesses who take on an eligible unemployed 18-24 year old for 6 months. The plan was to provide 160,000 of these subsidies over a three year period. The programme began in April last year, but details about how it’s doing have been thin on the ground. Finally, and without fanfare, the DWP published an “Early Evaluation of the Youth Contract wage incentive scheme” (a summary of the findings can be read here). Some of its findings are quite interesting and tell a slightly different story to the one the Government spun at the programme’s launch.

The researchers surveyed 279 employers who had recruited somebody eligible for a wage subsidy and had been sent a claim form. They also interviewed Work Programme providers and Jobcentre Plus staff. Here are some of the findings:

  • Only 56% of employers had actually heard of the wage subsidy scheme before they began recruiting;
  • 63% of employers had recruited the person on a permanent basis, while 31% were temporary or fixed term contracts;
  • The main reason for taking on someone eligible for subsidy (given by 30% of employers) was to gain some extra money. 22% said it was to give an unemployed person a chance;
  • Jobcentre Plus staff did not believe the wage incentives were creating new jobs, nor encouraging employers to retain staff;
  • Only 9% of employers had created new jobs as a result of the wage incentive scheme;
  • Only 7% of employers would not have hired a young unemployed person but for the wage incentive;
  • There was some evidence that some employers were taking on a person for 6 months, then letting them go before hiring another person and claiming another wage subsidy, even though this is against the rules.
  • Only 20% of employers said they have difficulties with recruiting young people.

What can we conclude from all this then?

New jobs are not being created as a result of this scheme. Employers with vacancies are just using the scheme as an extra revenue stream. At best we are talking about a young person being taken on where otherwise the employer might have hired someone over 25. At worst, the employer would have hired a young person anyway, so the wage incentive just represents a transfer of money from public to private sectors with no additional benefit whatsoever accruing to the Government (or the young person). 

So on the one hand you have a jobs scheme that creates no jobs, being talked up because it costs less than Labour’s previous scheme, and on the other, you have Labour’s Future Jobs Fund which actually created over 100,000 additional jobs (albeit for only a 6 month duration). Cheaper is not always better. The Youth Contract demonstrates one area of welfare spending that is not being cut – corporate welfare. Lets not forget as well that for every young person from the Work Programme completing 6 months work with an employer, the Work Programme provider gets a nice juicy outcome payment, so there’s a double helping of corporate welfare. As Private Eye is fond of saying “Trebles all round!”

There is an alternative to this kind of nonsense. Its called a Job Guarantee.

 

The Work Programme Part 3 – Payment by Results and Unpaid Work Experience

“Payment by results”. It sounds good. Firms only get paid if they do well, so there is a powerful incentive for them to act in the best interests of the individual. Something is going very wrong though. About £4 in every £5 paid out to Work Programme providers is not being paid because a ‘result’ has been achieved. It is being paid for an ‘attachment’ to the Work Programme i.e. when an unemployed person starts the programme. Only £1 in £5 constitutes ‘payment by results’, and even then as we have seen, the value of these results is somewhat dubious.

The Government has actually taken these poor results and tried to spin it into a story about value for money for the taxpayer. Responding to the dire figures published in November, Work and Pensions Secretary Iain Duncan Smith said:

“I think we are on track. Payment by results is about saying the taxpayers need not foot the risk.”

In other words, he’s saying that even if the Work Programme providers performance is abysmal, it’s OK because the taxpayer only pays for results. Leaving aside the fact that that is just not true, as we’ve already seen, the idea that all that matters is value for money for the taxpayer is frankly bonkers.

We have an unemployment crisis in this country and every day we are forgoing millions of pounds in lost income because we have millions of people unable to find work. We are not making use of all these people’s skills and experience while they languish on benefits through no fault of their own. The idea that it’s OK that we are not finding work for these people because the taxpayer is not on the hook is crazy.

The Future Jobs Fund was scrapped by the Government because it cost too much. A cost of over £7,000 per job is widely cited, but a recently completed evaluation of the programme came up with somewhat different numbers. The programme was found to have a net cost to the Exchequer of £3,100, but provided a net benefit to society of £7,800 per participant.

The idea that the only thing government’s should be concerned about is value for money, that cheaper means better is just illogical. It’s what society gains from spending by the government that really matters. The Work Programme may be cheaper than previous schemes (debatable I think), but the return on the government’s investment in the Work Programme looks like being very low (and maybe even negative) at this point. That makes no sense at all. Far better to spend more on a programme that will generate a greater return for society.

Payment by results is supposed to incentivise excellence, but achieving excellence is hard, even more so in an economy where there is a shortage of jobs. So instead of promoting excellence among Work Programme providers, payment by results seems to be promoting cheating or corner cutting (read part 2 for more on this). The result of this is that, far from creating an effective, unemployment reducing programme, it has created one which is barely (if at all) better than nothing.

Knock-on effects

Going hand-in-hand with the Work Programme appears to be the beginnings of a worrying trend in the labour market –  a growing casualisation of the workforce and – even more worrying – the rise of the unpaid work placement.

Casualisation

Casualisation, manifesting itself in the form of temporary, zero-hour or self-employment has exploded to such an extent that 3 million people now say they are underemployed, up by 1 million since the economic downturn began in 2008. So while Coalition ministers crow about falling unemployment, and 1 million new private sector jobs, it’s right to question just what sort of jobs they are, and what sort of precedent does this set for the future?

That’s not to say there is no place for zero hour contracts and temporary work. The key though is that there is a strong backstop in place to catch those who fall out of the system. Temporary work or zero-hour contracts are not so bad if there is a strong welfare state to fall back on (or a guaranteed state-funded job as I would like to see), but at the same time as the labour market remains weak, the Government are also weakening the welfare state at the same time by cutting working age benefits in real terms. Done in the name of deficit reduction, it’s the ultimate false economy. Cutting the incomes of those who spend most of their incomes mean less sales for businesses and less income overall. As Paul Krugman says:

“Your spending is my income, and my spending is your income. So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.”

Unpaid Work Experience (Or Workfare)

Wrapped up with the Work Programme has been the rise of mandatory unpaid work experience. Work experience has gained a lot of negative coverage in the media in recent years. A lot of this has focused on schemes outside of the Work Programme, but it is less known that it is very common for Work Programme participants to be mandated to do unpaid work experience.

The Work Programme uses the ethos of the ‘black box’ approach. This means providers have the freedom to do whatever they feel necessary to help a Work Programme participant get back to work. Often, it seems, this takes the form of unpaid work experience. This is mandatory. If participants refuse to take part, they can have their benefits sanctioned.

This practise of sending benefit claimants is growing in scope. It was recently announced that ESA claimants (those deemed unfit for work, but placed in the work-related activity group) can be mandated to do unpaid work experience for a time period without limit.

This phenomenon of unpaid work experience has now become so prevalent that private firms, with the collaboration of Jobcentre Plus and the DWP are now advertising ‘job vacancies’ that are actually unpaid placements. Here’s 2 examples:

There is a real danger I feel that this can become so normalised, that it becomes standard practise for certain employers to only hire on a ‘try before you buy basis’. This is just wrong in my view, but it just seems to have almost passed unnoticed in the press. It just shows how bad things have got when things most people would usually balk at just become the new normal. All decent people should oppose this in the strongest terms.

This post has strayed somewhat from its original theme, but just to try to draw the 3 parts of this series together. Here are the key points:

  • The Work Programme is an expensive failure. If we didn’t have a Work Programme, we would have expected more long term unemployed to have found work.
  • Work Programme providers are providing very little of value for the millions they are being paid. Instead, they are using a number of techniques to extract additional cash from the public purse.
  • Payment by results just doesn’t work
  • The Work Programme is giving rise to all sorts worrying trends, notably unpaid work experience.
  • It seems to be becoming normal for employers to expect jobseekers to work for them for free for a period before offering them a paid role. This can only displace paid employees. It needs to stop.
  • Real terms benefit cut and benefit sanctions are pure false economies. They will ensure unemployment rises, not falls and will bequeath a smaller economy than would otherwise be the case. It will end up costing us all more.