The controversial Work Programme, dubbed ‘workfare’ by opponents to the scheme, is still failing to help large numbers of unemployed people into permanent work, figures show.
Figures released today by the Department for Work and Pensions (DWP) show that less than one in ten (9.5%) Employment and Support Allowance (ESA) claimants, completing a year on the scheme, find work lasting at least three months. The DWP admits that outcomes are well below expected levels but standards appear to be improving from a low of 3.9% in June 2011.
For Jobseekers Allowance (JSA) claimants on the programme the short to mid-term prognosis is little better. Around 20% of 18 to 24 year-olds find work lasting six months or more. The figure falls to one in six for those aged over 25 and other JSA groups. Minimum accepted levels set by the DWP are around 1 in 7 and 1 in 9 respectively.
In total 13.8% of Work Programme participants find work lasting six (JSA) or three (ESA) months upon completing the scheme.
The long-term prognosis for all those who take part on the Work Programme is extremely poor and shows that the scheme is failing to help unemployment people stay in work. Of those completing the programme (both ESA and JSA claimants) less than a quarter were still in work after two years. Around 70% returned to Jobcentres to rejoin the unemployment merry-go-round.
Only 29% of the most recent participants to complete two-years on the Work Programme had a minimum of three/six months in work.
Earlier this year a report from the IPPR said the Work Programme is ‘failing those most in need and should be broken up’.
It’s clear that the Work Programme is still failing to help the majority of unemployed people secure long-term permanent employment.
The low bar the DWP sets itself would appear to show that the government is prepared to accept a less than successful programme.
Source – Welfare News Service, 18 Sept 2014
A rise in employment and sharp drop in the number of people out of work has had little effect on the scandal of low wages, the latest figures show.
Figures released by the Office for National Statistics (ONS) on Wednesday show that the UK unemployment rate has fallen sharply by 132,000 between April and June to 6.4%, the lowest since 2008, with a total of 2.08 million unemployed people in the UK. The figure does not include the 8.68 million people who are regarded as being ‘economically inactive’, or unavailable/unable to work. The economic inactivity rate now stands at 21.9% and is unchanged compared with January to March 2014.
The lower than expected wage growth figures come at the same time as other figures show that the UK is now the self employment capital of western Europe. Figures from the think tank IPPR show that the number of self-employed people in the UK has grown by more than 1.5 million over the last thirteen years, growing at its fastest rate during the first quarters of 2013 and 2014. Self employed people now represent more than 15% of the workforce. Around two-fifths of all jobs created since 2010 have been in self-employment.
Unions have expressed concerns that self-employment can often be insecure and low-paid, and may not always include the employment rights other workers are accustomed to.
Unite general secretary Len McCluskey said: “The British economy is in a Jekyll and Hyde situation.
“While the fall in the jobless total of 132,000 is welcome, we have to ask what sort of jobs have those people entered? The situation is compounded by the fact that more and more people are being driven into so-called self-employment in a desperate bid to get off benefits and find work.
“Self-employment is not the economic panacea that ministers crow about; it forces workers into a state without rights and with wage insecurity, and we are increasingly encountering people forced into `self-employment’ by employers who want to swerve their responsibilities.
“At the same time, the wage siege continues. If you strip out bonuses, wage rises are struggling along the bottom at a record low of 0.6 per cent which is hobbling the recovery in the UK economy. If self-employment earnings figures were included it would look even worse as the Resolution Foundation has shown.
“With George Osborne borrowing way beyond what he promised the nation, his mindless austerity policies are costing this nation and its people dear. This is no longer about reducing the deficit; it is about the systematic lowering of the living standards of ordinary people.
“Millions of people feel insecure in their jobs. Hundreds of thousands of our young people are languishing on the dole or press-ganged into workfare.
“Inflation is still running at 1.9 per cent – more than three times the rate of earnings. The case is clear that Britain’s workers need a pay rise – and this can be well-afforded by the companies which are sitting on a cash mountain of reserves.
“This government’s claims of economic competency are laughable. A government serious about job creation would not be borrowing to keep people in benefits, but would be investing to create work and skilled, decent jobs, through a mass house-building programme, rebalancing the economy away from its increasing dependency on the low-wages service sector, and tackling the chronic housing need in this country.”
TUC General Secretary Frances O’Grady said:
“The combination of rising employment and falling pay growth suggests the economy is very good at creating low-paid jobs, but struggling to create the better-paid work we need for a fair and sustainable recovery.
“Self-employment has been responsible for almost half of the rise in employment over the last year. The fact that self-employed workers generally earn less than employees means our pay crisis is even deeper than previously thought, as their pay is not recorded in official figures.
“Falling unemployment is always welcome – particularly for young people who are finally starting to find work – but unless the quality of job creation increases Britain’s living standards crisis will continue and people will be locked out of the benefits of recovery.”
Unison general secretary Dave Prentis said: “Any fall in unemployment is welcome but the rise of the number self-employed is a worrying trend. They are likely to earn less than those in full time jobs as well as being less secure.
“Underemployment is now a bitter reality for millions of struggling families across the UK. And many have no option but to work part-time because they cannot find a full-time job.
“Too many people are stuck in minimum wage jobs, on zero hours contracts and part time work when they are desperate to go full time. Desperate because they need regular, secure employment to feed their families without having to resort to foodbanks, pay their bills without falling into the grip of pay day lenders and decent pay to rebuild consumer confidence and grow the economy.”
The Citizens Advice Bureau (CAB) has described today’s unemployment figures as a “double-edged sword”. The charity says that falling unemployment coupled with low wages and an increase in self employment ‘will lead to instability for working households’.
Citizens Advice Chief Executive, Gillian Guy, said:
“With employment up but wages down, today’s economic figures are a mixed blessing for working families. The rising number of people in work is extremely welcome, but emerging trends in the economy bring a double-edged sword of more jobs but more instability and lower wages.
“The Government has undoubtedly made good progress on jobs and growth but increased self-employment, flexible-hour jobs and Zero Hour Contracts mean insecurity for many working people. Those people who work for themselves are just as likely to seek debt advice as any other working group. Self-employed people in debt helped by Citizens Advice are more likely to face bankruptcy than people in debt who are employed or out of work.
“On Zero Hour Contracts, we’ve had welcome announcements from the Coalition about banning exclusivity clauses but with this type of job a growing part of our economy, people with such a contract should also be guaranteed basic rights like maternity pay and annual leave.”
The Bank of England has responded to today’s news about poor wage growth by cutting its forecast in half. Bank of England governor Mark Carney said that he now expects salaries to rise by 1.25% this year. The figure represents the slowest pace in wage growth since 2001.
Responding to the announcement from the Bank of England, TUC General Secretary Frances O’Grady said:
“It is hugely concerning to hear that the Bank has cut its forecast for wage growth in half. The economy’s getting bigger but not better with Britain’s pay squeeze now set to continue even longer.
“It’s not just wage stagnation that’s pushing down incomes, living standards are falling because so many of the new jobs being created are low-skilled, don’t have enough hours, or are in low paid self-employment.
“It deeply worrying that the Bank says ‘average household real incomes have yet to stage a meaningful recovery’. If people don’t have money in their pay packets to spend on goods and services it’s hard to see how we can return to sustainable growth. Consumer spending is holding up for now despite people’s real pay falling, but the danger here is people running down savings or increasing their debts.
“That’s why Britain needs a pay rise, because a recovery built on stronger household incomes will be a recovery built to last.”
Citizens Advice Chief Executive, Gillian Guy, said: “As the economy continues to grow, ministers must not lose sight of the more than two million people stuck in the shadow of growth, and out of work. The legacy of recession is wages which remain far lower than prices, and with the Bank of England halving its wage growth forecast, many families will find that meeting household bills is even harder.
“Ministers need to make sure good policies, like financial support for childcare, reflect the new realities in the labour market. People taking up the growing number of flexible-hour and low income jobs are likely to struggle to get decent childcare, whilst 41 per cent of Citizens Advice clients say that finding a childminder or babysitter is a barrier to them taking on work.”
Source – Welfare News Service, 13 Aug 2014
This article was written by Patrick Wintour, political editor, for The Guardian on Wednesday 18th June 2014 21.00 UTC
Ed Miliband will set out Labour’s first plans for cuts to the welfare system, ending out-of-work benefits for roughly 100,000 18-to-21-year-olds and replacing them with a less costly means-tested payment dependent on training.
The move is designed to symbolise Labour’s determination to reform welfare, making it more closely linked to what people pay in, as well as cutting the benefits bill.
> More closely linked to Tory policy more like. What odds on a Con-Lab coalition after the next election ? They might as well – the differences between the parties seem to have now completely vanished.
“Britain’s young people who do not have the skills they need for work should be in training, not on benefits,” the Labour leader will say. It is essential to reform welfare to bring down a “wall of scepticism” among voters who don’t believe that politicians will make the system fairer, he will argue.
> So does “reform” always have to mean “make life more difficult for those worst off” ?
Miliband’s move reflects a recognition of anger among some voters that some people are getting “something for nothing” out of the welfare system. A YouGov poll for the Institute for Public Policy Research (IPPR), the leading centre-left thinktank, published on Thursday, finds that 78% believe that the welfare system is failing to reward people who have worked and contributed to it.
> Really ? Is it supposed to be a reward ? Are these people confusing benefits with investing money in stocks and shares or something ?
The removal of jobseeker’s allowance (JSA) for those with skills below level 3 would affect seven out of 10 of the 18-to-21-year-olds currently claiming JSA, and initially save £65m.
Miliband will reveal further plans to make welfare more conditional by linking benefit payments to national insurance contributions.
Under his plans, people would only be able to claim the higher rate JSA of £71 a week after they have paid National Insurance for five years, instead of the current two. The contributory element of the welfare system has been eroded in Britain and is much smaller than in most European economies.
Labour officials said the switch in spending by abolishing JSA for young people was not designed to be punitive, but to incentivise them to train. The longer qualifying period for higher-rate JSA will mean those who qualify will be able to receive additional help worth as much as £20 to £30 a week, they added.
The Labour leader, struggling with poor personal poll ratings, will be responding to a major report by the IPPR setting out as many as 30 radical measures to rebuild public faith in politics and public institutions in an era of austerity.
Two separate polls sent further dire messages about Miliband’s personal standing, with one poll by Ipsos MORI showing a small majority of voters wanting him replaced as party leader, and another by YouGov claiming voters would be more likely to back Labour if it was led by his brother, the former foreign secretary David Miliband.
Miliband will argue that any reforming politician must deal with doubts about the ability of politics “to address the long-standing pressures on work, family and people’s sense of fair play that has been piling up for decades”.
He will admit one reason for such scepticism is that “people think the problems are huge, but they don’t believe they can be solved because of the financial problems the country faces. Many people think that in hard times, politicians’ promises are all hot air.”
But big reforms need not require big spending, he will argue. “Our country continues to confront a fiscal situation the like of which we have not seen for generations, the result of a financial crash the like of which none of us has ever seen,” he will say.
“We cannot just hope to make do and mend, and we cannot borrow and spend money to paper over the cracks.”
Writing in today’s Guardian, the IPPR’s director, Nick Pearce, goes further, saying: “Gone are the days when economic growth could generate enough resources to redistribute income without making painful choices. Even with a different economic agenda, there is little prospect of any government elected in 2015 spending its way to greater equality.”
Pearce urges Labour to reject a business as usual path in which the government “would tax a little more and cut a little less, leaving the architecture of the state untouched and the current framework of services and social security in place”.
Miliband will also back proposals for local councils to be given more control of the ballooning housing benefit budget. The report suggests the housing benefit bill will reach £25.4bn, with real terms rises expected for the next five years.
Miliband argues the IPPR report shows that even when there is no money to spend radical reform can be started in the fields of health, child care, welfare, social care and housing. But he is going to be cautious about embracing some of its specific plans drawn up over the past 18 months, including a £2bn child care package, funded through scrapping plans for a marriage tax allowance, freezing child benefit and reducing pension tax reliefs.
The report also argues that there needs to be a switch of government resources from tax transfers and credits to delivering services, something that might require abandoning the expensive target to eliminate child poverty.
It will also propose a radical devolution of power to local councils, including over housing benefit and welfare to work for the disabled. In probably the biggest proposal, the IPPR will argue that the left has to restore the contributory principle in the welfare system. Pearce argues social security for the unemployed has become a liability for social democrats. Turning the issue into a source of strategic strength will require rebuilding the reciprocity that underpins it, restoring the contributory principle and giving new life to the idea of national insurance. “Fiscal constraints should lead us away from means-tested residualisation of welfare, not further towards it”.
There is frustration among some Labour policy leaders at Miliband’s reluctance to embrace more of the report, designed to show how the left set out a redistributionist agenda in the post-crash world. It has had the support of Jon Cruddas, head of the Labour policy review.
> Well, that’s it then. Labour continue to piss all over the very people who were originally their electorate. If anyone still had any belief that they were the People’s Friend, this should finally disabuse them.
Source – Welfare News Service, 18 June 2014
This article was written by Patrick Wintour, political editor, for The Guardian on Sunday 15th June 2014
The proposal is one of a series from the Institute for Public Policy Research in its Condition of Britain report, to be published on Thursday, including a proposal for a “daddy month” – four weeks’ paternity leave on the minimum wage, a plan that would cost the taxpayer £150m. More than 400,000 working fathers a year would benefit.
The thinktank’s report, the product of two years’ research, is due to be launched by Ed Miliband. It will look at the social and economic problems facing the country and cover areas such as welfare, housing, childcare and improvements to social care, as well as handing more power to local councils.
The current legal entitlement for working fathers is paid at a flat rate of £138.18 a week – equivalent to just £3.45 an hour for a 40-hour working week, little more than half the minimum wage. The IPPR proposes that the statutory paternity leave entitlement should not only be extended but should be paid at least the national minimum wage, with employers also encouraged to bridge the gap between the statutory rate and the father’s actual pay.
Only 55% of fathers take the full two weeks off work when their child is born and a third do not take any of their statutory leave. Most say this is because they cannot afford to.
On the Work Programme, the report concludes that the scheme is especially failing mentally ill people, and the task of helping those on employment support allowance – the main disability benefit – to find work should be devolved to local authorities, with councils recouping some of the possible savings from the Department for Work and Pensions.
However, the report says private contractors should be left to find jobs for the mainstream long-term unemployed using a modified version of the current system of payments by results.
> So… get rid of the Work Programme, and replace it with something like the Work Programme ? And we all know how good private companies are at milking the system despite poor results… which brings us back to the Work Programme !
It says: “The Work Programme, while delivering acceptable results for the mainstream job seekers, is letting down those furthest from the labour market. Whilst one in five mainstream job seekers will find work through the Work Programme as few as one in 20 of those furthest from the labour market will.”
> 20% is delivering acceptable results ?
It also says those in areas of highest unemployment are receiving the least effective help.
It adds the “DWP has carved up the country between providers without any accountability to citizens or regard to local labour market conditions. Therefore for those out of work the system represents a postcode lottery in which success is determined not by individual effort but by geography.”
The report also says the government should offer a guaranteed six month minimum job paid at the minimum wage or above to anyone who has been unemployed and claiming job seekers allowance for more than 12 consecutive months.
> Or another work scheme, in other words. And after 6 months ?
The report will also set out plans to freeze child benefit to help fund a new network of children’s centres and extra free childcare, although it is understood that Miliband will reject this proposal.
Source – Welfare News Service, 15 June 2014
This article was written by Toby Helm, political editor, for The Observer on Saturday 14th June 2014
The Condition of Britain study by the IPPR thinktank, to be launched by Ed Miliband on Thursday, will also contain proposals to devolve large amounts of power and funding out of Whitehall, including the control of housing benefit to councils, in order to stimulate innovative housing policies and more housebuilding.
The project was set up in February 2013 as part of Labour’s policy review to consider how institutions and policies need to respond to today’s needs – including more childcare and better care for the elderly – within the confines of tight budgets and inevitable further cuts.
A key theme is expected to be that early intervention at every stage of life can prevent society having to continue “paying for the costs of failure”.
> “early intervention at every stage of life” – now isn’t that an ominous phrase ?
The report will argue that a stronger society can be built on the three “pillars” of shared power, contribution (through changes to the national insurance system) and strong institutions. While some proposals, such as a plan to freeze child benefit to fund a network of children’s centres, are likely to be rejected by Miliband, many of its central ideas will be considered by the party’s national policy forum in July.
The report is expected to look at whether benefit payments can be linked more closely to levels of contributions through changes to the national insurance system.
Senior figures believe that Labour must counter the impression that it supports a “something for nothing” benefits system by looking at radical change.
> Oh great – so it’s all about image and trying to appeal to those sectors of the electorate who wouldn’t vote Labour anyway. And once again those at the bottom of the pile will get a kicking… just so Labour look tough, just like the Tories.
Not a single original thought among them, is there ?
Writing on theguardian.com, the chair of the policy review, Jon Cruddas, suggests that such ideas could form a major part of Labour’s manifesto at the 2015 general election.
Looking ahead to the report’s publication, Cruddas says: “It sets out three broad strategies for social renewal: spread power and responsibility to build democracy and strengthen society; foster contribution and reciprocity to re-establish a sense of fairness and justice; and strengthen our shared institutions to help tackle social problems for good. These establish the foundations on which we can build a competitive wealth-creating economy.”
The report will contain proposals for a one-off levy of £450m on Britain’s £180bn consumer credit industry which the IPPR says could create enough affordable lenders to take on Britain’s legal loan sharks.
It says that, as well as a new legal cap on the total cost of credit, Britain needs a new generation of not-for-profit lenders with enough capital to compete with firms like Wonga, Quick Quid and Payday Express.
The IPPR launch will be followed later in the summer by Andrew Adonis’s growth review, which will focus on developing the economic potential of cities. Richard Leese, the leader of Manchester city council, will then publish work by his local government innovation taskforce setting out plans to redistribute power across England and reform public services so that they can be tailored better to meet local needs.
Source – Welfare News Service, 15 June 2014
Regional economic policy must be revamped if the North East is to get a fair deal in the wake of the Scottish independence vote, a national research director has said.
Dr Angus Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research, said the Treasury does not prioritise the North East and politicians must form a strong and unified voice to correct the imbalance.
At a debate on how September’s vote will impact on the region, regional leaders also heard of a “growing realisation” Scotland may not lower corporation tax, allaying fears the country would suck business from its neighbours.
It comes as all seven North East councils, from Durham to Northumberland, agree a Combined Authority which will allow it to bid for more Government funding.
Dr Armstrong said regional policy is not a priority for the Treasury when it calculates how to spend Government cash and the North should look to reconsider a regional assembly to be heard above its southern counterparts and in Europe.
He said: “I used to work for the Treasury during the crisis and regional policy does not register. I hate that that is the case, but I really don’t think it is part of Treasury policy. I think the whole concept of regional policy needs to be re-thought.”
He added: “People in the South East underestimate the extent to which power is centralised, so, although they have a feeling there is something of an imbalance, that imbalance is greater than that feeling would suggest.
“The reason I say that is because of the financial crisis. The only reason they could support the City of London is because of the taxpayers of the rest of England.
“When it goes wrong we pay, it is quite remarkable and I find it amazing that places outside of the South East don’t have more to say about that. I do think the degree of imbalance is extremely significant.”
Pat Ritchie, chief executive of Newcastle City Council, said the region’s airports and universities could lose out due to a possible relaxation in border controls which might see students flock to Scottish universities.
She added there were fears changes to the Air Passenger Duty tax could see carriers opt to begin routes from Scottish airports.
Ms Ritchie, however, said there was an opportunity for the region to export goods to the country and, with Edinburgh closer to the region than London, collaborate with Scottish national leaders.
She said: “We should and can be confident in our strengths. This is a region which exports more than any other region and it is already used to working with different markets.
“Whilst not wanting to marginalise what is an important debate, we should not get too hung up on what Scotland might or might not do.
“We need to really develop the strongest possible economic offer that we can for the North East and collaborate as local authorities and businesses and be confident.”
Professor David Bell, professor of economics at the University of Stirling, also spoke at the debate, organised by the Institute for Public Policy Research (IPPR), and said Scots are keenly aware of the need to collaborate with the North.
“I don’t think that the North East is particularly disadvantaged because for Scotland to get anywhere with these negotiations there would have to be a cluster of compromises, and it would make no sense to have poor relations with its near neighbours.”
He added the North East faced being drowned out by the South East but there was a “growing realisation” that Scotland could not drive down corporation tax as it risked becoming a tax haven for businesses.
He said: “I go to talk about independence on a regional basis and the elephant in the room is the lack of political impetus, particularly in the North East.
“It is just not there and it isn’t part of the issue.
“If Scotland votes yes or if it votes no and gets more powers, you will have a heavily asymmetrical system in England which cannot continue to be stable.”
Source – Newcastle Journal, 28 March 2014