‘Support’ for the Long-term Unemployed: The Costs.
The government intends to sentence the ‘long-term unemployed’ to unpaid community payback, or “support for the long-term unemployed“.
There are major problems with this – apart from the fact that the out-or-work are not going to be overjoyed at working for nothing.
Or that those who could be paid to do these jobs will not be delighted to be undercut by those on the Dole.
Indus Delta notes,
The problem though, as ever, is around cost and impact. Organising full-time activity, even when the participant is only paid benefit rather than a wage, tends to be expensive. Someone needs to source the placement; there’ll be costs for the host employer (materials, training, supervision, etc) and there’ll be costs from providing jobsearch support, personal adviser support and reporting to DWP. In the UK, the old Community Task Force paid providers up to £1,300 for a 13 week placement, while New Deal voluntary or environmental options cost £750-1,000 for 13 weeks (see here). The current “Mandatory Work Activity”, which DWP began rolling out this summer, may be even more expensive – with a maximum cost of £800 for a four-week placement.
Let’s put this clearly: a reluctant workforce is going to need a lot of supervision, apart from all the other ‘costs’ (that is pay off to companies arranging the scheme).
On top of this we can expect the usual attempts to cream off extra cash and fiddles we’ve already seen from companies like A4E.
Of course, upfront costs aren’t a problem if the “workfare” programme recoups that through lower benefit spending. By piloting first, DWP should be able to test this. But it’s fair to say that the evidence is pretty mixed. DWP’s own comparative review of workfare, published in 2008, concludes that while there is a strong deterrent effect (people leave benefit before starting the workfare), “there is little evidence that workfare increases the likelihood of finding work”, it is less effective in weak labour markets, less effective for those with multiple barriers, and can reduce the likelihood of entering work – because it can limit the time available to look for work. (So taking Australia as an example, some studies find strong positive impacts from participation – for example these two impact assessments from 2006 and in 2010 – while another found “quite large significant adverse effects.”).
We have not seen any Government test “pilot” scheme “fail”.
Even ATOS is given all the leeway it needs,despite mounting evidence that it has indeed failed.
The central criterion is not the effect Welfare Reform has in improving people’s lives, helping the unemployed into jobs,
It is to reduce the size of the welfare state, and hand large chunks over to private companies and charities.
The Government and the enthusiasts for giving private companies large amounts of tax payers’ money will make sure this will ‘work’.
We await confirmation of how this army of unpaid labour will be used to plug the cuts in public service spending.
We could well end up with those on Workfare working alongside the paid, a sub-class of employees, without real rights and with barely enough money to live on.