What to do about Britain’s ‘welfare culture’

There’s been a lot of talk this week by politicians and in the press of the problem of Britain’s welfare dependency, its something for nothing culture which is slowly but surely destroying the nation. Some even seem to think this ‘evil’ can drive people to kill their own children. So this is surely a national emergency that we must tackle without haste. The Government say this is exactly what they are doing. They are ‘making work pay’. George Osborne says:

“For too long, we’ve had a system where people who did the right thing – who get up in the morning and work hard – felt penalised for it, while people who did wrong thing got rewarded for it. That’s wrong.”

Quite right. Before now it was too easy to just sit back and rake it in on £71 a week Jobseeker’s Allowance. And who hasn’t thought about doing it themselves? I know I’ve often thought about jacking in my job and replacing it with a jet set lifestyle on benefits, thinking about the sports cars and holidays in the Caribbean that £71 pounds a week could buy me. What luxury!

Seriously though, we must make work pay. Thank god George Osborne knows what he’s doing then. To make work pay for those at the bottom he must be increasing the minimum wage right? Wrong! Increasing working tax credits then? Nope! But at least the Government have increased the income tax threshold. Surely that will benefit those at the bottom the most? You’d think so, but you’d be wrong again. When Universal Credit comes in people will be assessed based on their post-tax income so for every £1 they gain from the tax threshold increase, most or all of it will be clawed back through benefit reductions.

So instead of demonising those on welfare, or implementing policies that actually achieve the opposite of their stated aims, what would a real solution look like?

It seems blindingly obvious that there are at least three glaring issues to be dealt with:

1. There are not enough jobs. Even at the height of the boom this was still the case.

2. Many of the jobs that are out there are low-paid, temporary or part-time.

3 Housing is short in supply and damn expensive

Issues 1 and 2 can actually be fixed with one policy – a job guarantee. We need to accept that the private sector (efficient and awesome as it obviously is) will never be able to produce enough jobs for everyone that wants one. As productivity increases over time and more and more jobs become automated this problem will only increase.

If the private sector cannot create the jobs, the government must step in and be prepared to hire all those left behind. It should not be beyond the wit of man to design a jobs programme that provides great social benefit without going into direct competition with the private sector.

Job guarantee jobs should pay a living wage. This will tackle problem 2 by forcing the private sector to up its game by improving the wages and terms and conditions it offers.

And problem 3? Housing. We could try to hassle people into moving into smaller homes by charging them extra for a ‘spare’ room, or we could actually tackle the real issue – lack of supply of affordable housing. Government should directly fund local council on a per capita basis to build 100,000 council houses nationally per year. The Government wants to cut the housing benefit bill by £2bn (although they’ve actually increased it by more than £3bn). This should achieve that and then some. It might also create one of two jobs I would have thought. And as we would be building the damn things, lets make them environmentally sustainable homes as well. This will reduce incidence of fuel poverty amongst residents of social housing.

To conclude then, the hallmark of this Government has been a crushing timidity on the big issues, coupled with a nasty desire to reach into people’s live and moralise about their views on how people should behave in the fictional world they have built where jobs are plentiful and if people would just pull themselves together, the country would be back on its feet in a fortnight. With a little ambition and a willingness to take off the fiscal straight-jacket our politicians seem to have donned, it’s easy to envisage what at alternative path might look like. Anyway rant over.

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The Work Programme Part 2 – Having a laugh at the public’s expense

In part 1, I discussed the DWP’s recent release of performance data for the Work Programme. Despite quite modest targets for year 1, across the board, Work Programme providers are failing. In this second part, I want to  give a few examples of why I feel the already dire performance figures to date create a misleading picture of how much added-value is actually being generated by the firms contracted to help individuals on the Work Programme. I think the reality is actually much worse than is generally thought.

Before I start, I just want to make clear that I am not picking on a particular provider here. Although firms like A4E have been singled out in the media for a large amount of criticism, the performance of providers across the board is poor, and what follows seems to be taking place within a number of providers.

The following examples appear to be evidence (although anecdotal), that Work Programme providers are adopting a number of techniques to maximise their revenue without actually investing time and effort into individual jobseekers themselves. To me this constitutes a misappropriation of funds, but I don’t expect DWP to investigate any time soon. In one case as you will see, the transfer of funds from public to private without any value being added by the company is officially sanctioned.

Tricks of the Trade

One of the benefits of living in the age of the internet is that people who before found it almost impossible to get their voices heard can now do so. Through blogs and social media, stories are being told about the Work Programme from the people actually referred onto it. The same stories seem to come up again and again. Here are three of the most common ones.

1. Already found a job? Just sign these forms

This technique is actually officially sanctioned in certain instances by the DWP, and is written into the Work Programme guidance (chapter 4) which can be downloaded here. When someone is referred to the Work Programme, there may be a gap of a couple of weeks before that person is officially ‘attached’ to the Work Programme.

If you look at paragraphs 71 to 76 of the guidance it explains how if a claimant finds work between referral and attachment, the provider can try to attach the individual before they start the job. In practice, this means meeting with the individual and completing some paperwork. If they are able to do so (and perhaps provide them with some token help like a bus pass or vouchers for work clothing), then they are eligible to receive the outcome payments should that person remain in work. This could earn the provider several thousand pounds on top of their £400 or £600 attachment fee.* Kerching!

This ruse also applies to people who actually are on the Work Programme. The claimant may have found work themselves after finding the Work Programme support poor. Here’s and example of what I’m talking about from this blog:

“They rang me up today to check how I was doing,” he wrote, “and when I told him I had a job he seemed to perk up a bit. He said he’d give me £100 “petrol money” if I signed some paperwork to let him contact the DWP.”

To me, this sounds like a bribe, but DWP seems absolutely fine with it. I suppose they term it “in-work support”.

Now in cases like this, the provider may argue that it was the help and support they provider that helped the person find work, but how sure are we that this is the case? A lot of people’s experience of the Work Programme seems to be a monthly 20 minute face-to-face meeting with the provider, and maybe the odd phone call. Not the individually tailored, bespoke support we were promised. Which brings us onto the related trick 2.

2. Creaming and Parking

Creaming and parking is the phenomenon whereby providers identify job ready claimants (they may be graduates or other high skilled people), and focus all their attention on them, while ignoring, or providing very little support to those who are harder to help. They still receive their attachment payment for those they ‘park’, and if any of these people get jobs anyway (and the law of averages suggests some will), then all the better, they can apply trick number 1 and claim the outcome payment. Research commissioned by the DWP highlights that creaming and parking may be an issue (see here), saying:

“Some of the reported  experiences of participants and providers suggest, at face value, a degree of creaming and parking; for example, many providers openly reported seeing their most job-ready participants more frequently than those with more severe barriers to work.”

So it seems to be a case of help the ones who would probably find work easily anyway and ignore the rest until they (hopefully) find work on their own.

3. Working Tax Credits are a provider’s best friend

Hat tip to the Johnny Void blog for alerting me to this, but it seems that Work Programme providers seem to be encouraging claimants to declare themselves self-employed in order to trigger a job outcome payment. Apparently, if a person works self-employed for over 30 hours a week (although in reality much less), but earn under a certain threshold, they can claim working tax credits of up to £50 per week. This is only about £20 less than Jobseeker’s Allowance. A person doesn’t need to earn anything to receive WTC, but would only need to work a few hours a week to earn as much as JSA. I don’t know how prevalent this is, but it seems that one provider in particular may be making the most of this apparent loophole.

So these are a few of the wheezes Work Programme providers seem to be using to inflate their job outcome figures (which in part 1 we saw are still woeful). These practices and others like them seem to be widespread and not just used by one provider. Added together, they sum to a large amount of (admittedly anecdotal) evidence that Work Programme providers are delivering even worse value for money than people think. The whole programme seems to amount to nothing more than a giant rip-off, a transfer of huge sums of public money into a relatively small number of private companies and individuals, in return for very little of value. Some people it seems, are having a laugh at the public’s expense.

This was originally intended to be the 2nd of a two part post on the Work Programme, but I’ve now realised I need a 3rd part to explore why we persist with the payment by results model despite its seemingly obvious failings.

*H/T again to this blog post for drawing my attention to this practice

For more information on problems with the Work Programme, and the Government’s welfare policies in general, I recommend following @boycottworkfare and @johnnyvoid on Twitter.