Welfare to work and the 'lobster' effect

Most readers are aware that if you place a lobster in boiling water it will jump out. Yet, if you place it in cold water and increase the heat slowly it will stay in the pot until it eventually dies. If ever there was a living example of how that applies to humanity it is in the current behaviour of welfare to work staff.

Several weeks ago the government announced the closure of Pathways to Work and NDDP contracts and this was soon followed by the awarding of new contracts for the Tory flagship Work Programme. Analysts have long argued that Pathways to work and NDDP were destined for the ‘chop’ so it came as no surprise – yet a sizable number of people working in the industry seemed astonished the axe had fallen.

In a similar vein, the new prime and subcontractors are starting to recruit their staff for the delivery of the new contract. This has already meant that considerable numbers of people have been given redundancy notices and others have been advised they will be subject to TUPE regulations.

I have long argued that the new programme will not require anything like the numbers needed for the previous Flexible New Deal contract. Sadly, my insights are now starting to come to fruition. A number of large organisations have already started the process of ridding themselves of surplus staff, whilst a number have already started the process of TUPE’ing staff over to the new provider.

Inevitably this will mean that sooner or later new providers will ‘fill their books’ and have all the staff they need, leaving many staff who currently work for providers who lost out on the provision out on a limb.

Information coming in already suggests that at least three providers are without any work whatsoever after September, 2011 and this will mean they will have no need for any operational staff after that time. Unfortunately none of these companies have contacted the new providers to begin TUPE negotiations so this will inevitably leave everyone out in the cold and could result in at least 1,000 redundancies.

Overall it is unclear how many people will lose their jobs throughout the sector. Information from companies is deliberately vague and their employees are being fed little to no information. In most instances staff are being advised not to worry because they will be ‘subject to TUPE@ - but existing evidence has already shown this does not automatically mean they will still remain unemployed. Indeed, the available evidence is very much that because the financial model required by DWP was so close to the edge, most providers were forced to produce delivery designs where less staff would be required to achieve more, for less money.

Had the industry stated at the beginning of February that within six months 2 – 3,000 people (and possibly more) would be booted from their jobs there would have been an outcry. Staff would have been writing to the papers and to their MP; Grayling would have faced a picket line when he spoke at the Welfare to Work conference; some organisations might have had to contend with industrial action to protect jobs; MPs would have been asking questions in the House of Commons.

Instead the bosses remained silent – and if they did say anything, they told and continue to tell half-truths., or downright lies. Typical of this is A4e, who recently put staff in areas where they did not win on redundancy notice. The hope is that following TUPE consultation all of these people will move over to new employers – but of course this depends if they have vacancies. Also, some are starting to realise that local delivery managers may not be subject to TUPE and could find themselves out on their ear.

Sadly the people in the sector are almost certainly not going to do anything about it. Like ducks in the pond they are all waiting for the hunter to come and shoot them. Whilst they wait for the slaughter to begin most of these good people are working like Trojans in the hope that above average performance will somehow give them the chance of a new job.

It is very, very sad and people’s lives will be decimated because Duncan Smith and Grayling wanted to make their mark on the industry. Well they have – and as the cull begins, the blood is dripping from their hands.

We are in this together

Following my call yesterday for attendees of the Welfare to Work conference in June to ‘Turn they Back on Grayling’ there has been a flurry of email response from readers.

The vast majority were completely in favour of action to force the government to rethink some of their ideas on welfare to work and many supported my call for action.

Before other readers start feeing sorry for Mr Grayling please remember this is a man with an estimated personal wealth of £500, 000 and who owns four London homes. Despite his personal wealth, he still had no qualms about charging the state £40, 000 for refurbishments to one of these houses.

Iain Duncan Smith is a fair bit better off with a personal wealth estimated at £1m and owns two homes. He owes his apparent wealth to his wife, Betsy and lives in a £1million house provided by her father, the 5th Baron Cottesloe, which appears to be tied up in a series of complex family trusts.

I am sure the fact these two ministers are so comfortably off will offer great solace to the hundreds of welfare to work staff now facing redundancy. As they look forward to a future sitting ‘the other side of the desk’ at Jobcentres, these hard-working professionals will no doubt sleep much better at night knowing Duncan Smith and Grayling are able to afford the life of Reilly. And the thanks the state will give them for helping so many people back into work? A measly £67.50 or £105.95 a week if they are a married couple or living with a partner.

The time has come to stand up and take action and following a significant response to earlier posting I am proposing that staff in the sector set up a Welfare to Work Action Group (WAG) with the aim of campaigning on a variety of levels – these to be decided ultimately by those who ‘sign up’ to the concept.

Amongst issues that could be raised are the following:

1. Opposition to the government’s ill-planned Work Programme that has already been shown to offer little for the Third Sector and is unlikely to provide any real benefit to the unemployed.
2. Greater levels of equality between frontline workers and senior management and directors (including CEOs). This is not to suggest they should not be well paid, but the difference between the lowest paid and the highest should be no more than 10 times the salary. Thus, if the lowest paid frontline worker earns £16, 000 per year then the Chief Executive can only earn £160, 000
3. Professionalisation of the industry – this should not be determined by an independent think tank and a group of providers as can be seen in the POWER group, it should be determined by the staff themselves.
4. A total rethink on the way the industry is funded. Currently all staff are only secure in their jobs for 5-years. After that time they are often under threat of redundancy and, if lucky, subject to TUPE transfer. It is a disgrace and I know of no other career that places professionals in such a position. Ask yourself the question – would nurses, doctors, teachers or social workers accept such treatment?

These are just a few ideas. They are not exclusive and the ones I have proposed are not set in stone. They are merely discussion points to drive the Group forward.

If you are interested in being part of a radical group dedicated to campaigning and promoting an alternative view of welfare to work, whilst supporting staff who work in the sector then please write to me. The email is at the top of this blog.

If you do not have time to become involved, but essentially support the notion of a group, still contact. Your name can be added to a mailing list and we can keep you informed of what is happening.

This will be a members’ organisation, with policies and campaigns determined by the membership – it will not be a mouthpiece for this blog.

Help start the fightback to preserve services for the unemployed and save jobs in the industry. The more people we have on board, the stronger will be our voice, so tell your friends and colleagues about this blog and encourage them to write in and lend their support.

The "no help for the poor" Budget

Despite the fact that yesterday’s budget offered little to ease the burden on thousands being made unemployed , the trade body that represents the majority of apprenticeship training providers in England (the Association of Learning Providers) has warmly welcomed the further expansion in the government’s apprenticeship programme which was announced in the Budget.

ALP said the challenge is to ensure a good proportion of the extra places go to young people as well as to converting members of the existing adult workforce into apprentices. Well whooppee-doo, but where do they hope to find these jobs, when companies are reluctant to take on new staff. Or are they going to market apprenticeships as an easy way for companies to acquire little more than slave labour?

Whatever their reason, ALP has been pressing ministers since this Tory-led government took office for adequate pre-apprenticeship provision to be in place to help school-leavers who aren’t eligible to start full apprenticeships. Reasonable, except they are setting up young people to fail – at the moment, the jobs aren’t there and with OBR growth forecasts looking bleak there is little reason to assume it will change.

So what are they key areas of the budget that might affect those less well off? Well, he has proposed a rise in the personal allowance for income tax (£3.3bn) and a rise in the child element of the child tax credit (£1.2bn). As for the rest – well Osborne and the Tories would have us believe his measures will help the world know “Britain is back in business”. But let’s look at some of these key proposals that will help industry so much.

First there is the decrease in corporation tax – well as companies are struggling to make profits this will hardly have a profound effect. In case he hasn’t read the news, many sectors are struggling to expand and some are actually in decline. Admittedly he did offer some tokens to the construction industry, but it was hardly a mass house rebuilding programme - which is something this country desperately needs if it is to adequately address housing problems and homelessness.

According to the FT last night, the winners were most companies and motorists, whilst the losers were banks, oil companies, tax avoiders and people in Lear Jets. In other words; no help for the 2.5m unemployed, no support for pensioners as they face nearly 5% inflation and watch their savings become meaningless; no support for the sick and disabled as they struggle to face daily living on a fixed income that is generally regarded as being below the poverty level; no concrete measures to combat global warming and encourage companies to adopt greener machinery and hybrid vehicles.

Noticeably, when Osborne down and listened to Ed Miliband deliver his response he looked singularly at the accusations being made against him. Admittedly Clegg tried to come to his aid by calling on Miliband to calm down – why Nick? Didn’t you like hearing the truth that you are mixing with a crowd that are creaming the wealth out of this country and sharing it amongst their capitalist cronies?

The sooner we can dump this government the better.

This morning, several thousand people working in the welfare to work sector will wake up realizing they are close to their last day in work as their redundancy notices finally expire. Thousands more in the same sector are waiting for the axe to fall on them. Osborne’s budget changes will have done nothing to save them and offer them little hope for finding alternative employment. Yet these are people that have given years of their lives to supporting and helping thousands of people out of joblessness. They never asked for huge salaries – indeed, many earned quite low incomes and nor did they want acclaim and fame. All they wanted was a little job security – but the Tories and the bosses took that away from them.

Some in this sector are in their late fifties and will probably never work again. They had never intended to retire and until recently had hoped for a few more years work to build up a small amount of savings to help them in their later years. They won’t have that now – and the finger of blame lies firmly on the likes of Osborne, Duncan Smith and Cameron.

On Saturday, hundreds of thousands of ordinary people will march against this government to show them we can take their type of politics no longer. We will show the Tories you can’t mess with the working class and get away with it. Some of my readers may not see themselves as political, others are perhaps less left-wing than myself. But I am convinced all of you care about the people in this country.

Whatever you are doing on Saturday, if it can be delayed them join with us – come to London and let your voice be heard. Let Citizen Dave, the people’s toff know we will not sit idly by and watch thousands of good people in the welfare to work sector get pushed aside for the sake of a Tory dream.

If you don’t tomorrow the bosses may well be calling you in and giving you a redundancy notice!

IDS - a very dangerous Tory

Next week, the Welfare Reform Bill will receive its second reading in the House of Commons. However, within its content there are significant problems. Already a number of charities and social care organisations have spoken against aspects of the Bill and, more recently, the Child Poverty Action Group has launched a legal challenge against the government’s plans to cap housing benefit from 1 April.

They told the Guardian newspaper it has "issued urgent proceedings for judicial review” on grounds that large areas of the south-east will no longer be affordable to the poor, with lone parents and ethnic minorities "disproportionately affected".

From April, weekly housing benefit payments cannot exceed £250 for a one bedroom flat, with a maximum £400 for a four bedroom house. Any excess in rent payments will have to be met by claimants via other means. The campaigners argue these changes will begin a forced migration of thousands of families – particularly in central London but soon after in the wider south. Only 7% of central London would be available for benefit tenants after the changes come in to force on 1 April – down from 52% the day before.

But these are far from the only problems in the Bill. Even the Church of England has voiced some concerns over its content. Speaking to the Guardian on the 22nd October, 2010, the Bishop of Blackburn said:

“The government has said that there will be personalised back-to-work support for those with the greatest barriers to employment. However, among this group are those people who are chronically sick and disabled. Sometimes it may seem that they have a remission of their illness sufficient to enable them to do some kind of work and at other times their illness makes this impossible. The prospects for this group are bleak under the new allowance arrangement. At the end of a year receiving the employment and support allowance, they will be "means tested" for future benefits or be faced with finding a job which they can fit around their unpredictable condition."

The Bishop is not alone in his fears. The charity, Family Action, which provides support to socially disadvantaged families, has argued:

“But perhaps most worryingly of all, the Universal Credit Impact Assessment admits that questions around childcare remain unresolved. Under some of the proposals for childcare costs hinted at in the white paper, some parents could end up paying ten times more towards their childcare costs from their own pockets than they do at present (a reduction from 97% to 70%). Parents who would otherwise be better off under the Universal Credit could end up considerably worse off as a result of these proposals if they have high childcare costs. In some circumstances they could pay to take on extra working hours, if this means that they have to pay for additional hours of childcare.”

So why are the Tories proceeding so heartlessly without taking into account the views of so many people? The answer is not so simple.

There are three key players moving the Bill through its stages in the House of Commons – Chris Grayling, Steve Bell and, of course the Secretary of State for Work and Pensions, Iain Duncan Smith,

Grayling is an old style Tory with traditional values. He is steeped in the traditions associated with Conservativism, including the ‘value and need to work’ and personal responsibility.
He has previously held high office, but after a rather unpleasant homophobic incident was pushed down a level in Citizen Dave’s selection of Government ministers. Make no mistake, he wants Iain Duncan Smith’s job and will do anything to get it. He lacks the intellectual capacity of IDS, but is nobody’s fool and whilst it suits him, he will campaign vociferously for the Bill.

Steve Webb is rather different. A Liberal democrat who has sat rather comfortably around Tory circles since last May. He was the Lib Dem spokesperson for Work and Pensions in the past, though tended to shine more as an expert on pensions, rather than welfare benefits.

Ideologically, Webb leans more to the left and as wants a fairer welfare system. It has long been his contention that Universal Credits will ’level the playing field’ and. He has yet to comment on the many arguments against aspects of the Bill and will want to be seen as being loyal to Clegg and the Cabinet – partly because he has some idea of seeking the leadership himself at some future stage in his career and does not want to do anything to blot his copy book..

Iain Duncan Smith is different. He was thrown out of office as leader of the Conservative Party and spent many years in the political wilderness He wasn’t wasting his time. At the bequest of Citizen Dave, he set up the Centre for Social Justice, a right-wing think-tank dedicated to offering a more traditional view on social issues. His position as Chair and Founder of the Centre allowed him to meet the charismatic figure of Debbie Scott, the Chief Executive of welfare to work charity, Tomorrow’s People. Here he discovered a whole arena of social problems relating to unemployment and his mission became to talk to large numbers of those affected by poverty.
It led Peter Watt, the past Secretary of the Labour Party to say of him:

“Take the example of welfare policy. Listen to Labour and the assumption is that IDS wants to punish the poor, somehow that he gets off on increasing vulnerable people's suffering. What we don't think is that he wants to improve the lives of the poor but just doesn't think that the current incarnation of the welfare state is the best way to achieve this.”

It is a realistic analysis. IDS is not ‘your typical Tory’ - he doesn’t want to smash the poor, or create a divided Britain. He genuinely believes the existing welfare system is broken and his reforms will bring about greater opportunity for all. He genuinely feels many people on incapacity benefit have been sidelined and need help back into work and he truly thinks Flexible New Deal was a disaster and his new Work Programme will be the solution.

Of course, the evidence says he is wrong and many readers of this blog will know I have outlined many of my concerns on previous pages. But we should not batch IDS into the same pot as Citizen Dave or any of his toff friends. Certainly IDS comes from a privileged background and has never experienced poverty, but do not fall into the mistaken assumption he doesn’t care – he does – unfortunately, his values and beliefs have directed him to conclusions that will continue to divide this country.

Make no mistake – Citizen Dave and his Tory cronies are a nasty smear on British politics, but their political naïveté will ultimately be their own downfall. Iain Duncan Smith is ideologically driven and has a very clear mind of the society he wants to bring about – and that makes him the most dangerous kind of Tory. We have yet to see the worst of IDS. Watch this space.

Unemployment and the Great British Fob Off!

News that 97 per cent of posts created since the economy came out of recession are of limited hours will come as no shock the welfare to work sector. The statistics mean only 6,000 of the 200,000 jobs to have come up in a year pay a full-time wage.

Of further concern to providers is the fact that evidence showed the top performing provider only achieved 8% sustained job outcomes. The average caseworker will be already aware of this, but it seems the Department of Work and Pensions have chosen to ignore current labour market trends.

There is an increasingly trend emerging amongst employers to offer part-time, or ‘zero-hour’ contracts because there is often no National Insurance to pay on behalf of the employees as usually their earnings are comparatively low.

In addition, firms often do not have to pay overtime or pension contributions, unless the part-timer has worked more hours than a full time colleague. Unscrupulous employers have historically used zero-hours contracts as a means by which employees are only paid for work actually done. For example, a restaurant might employ three staff and not know how busy a particular night was going to be. The employer would therefore have staff 'on call' and unpaid, until it became busy enough to bring them out to serve.

One of the reasons employers have opted for these contracts is because they are worried about low growth levels, increasing inflation and the reluctance of banks to finance projects. This point was emphasized by David Frost, the Director-General of the British Chamber of Commerce, who said:

“Clearly there's a lot of nervousness about the future and companies are hiring people on a short-term basis in case the economy doesn't grow as expected. When there's more confidence companies will convert part-time people into full-time employees.”

This kind of uncertainty will not disappear overnight and the National Institute of Economic and Social Research (NIESR) warned it will take at least two more years before the economy claws back output lost to the crisis of 2008. In the meantime, unemployment will soar this year to a 17-year high of 2.8m - 8.8% of the workforce.

Now, let me draw an analogy. Let us assume you had a car parked outside that you needed for work. Let us also assume that every time you needed the car, it only started and ran 3 times in every 100 – would you continue to run the car? Presumably not. Yet the government adhere to a belief that the Welfare to Work sector offers the unemployed some kind of future salvation.

Clearly this is not the case and evidence shows large numbers are being referred to independent providers (who are paid handsomely for their services), only to be fobbed off with low-grade part-time work. This is hardly a solution and one can only stand in total confusion at Iain Duncan Smith’s professed allegiance to the process. Is it that he sees our future as all being employed part-time? Perhaps he doesn’t care about the unemployed and only wants to massage the statistics? Possibly it is because he sees the vast profits the Welfare to Work sector makes and thinks he can fool us whilst making companies like Serco, A4e, Working Links and others pay low rates of corporation tax.

The system is ineffective, fails to address fundamental problems within our labour market and offers no solutions to the unemployed. Rather than encouraging large corporations to bid for the new Work Programme, the government should be reviewing the entire process of how we fail those who are workless.

Morally, it is what should be done – I won’t hold my breath!