Workfare is a catch-all term that refers to a range of state sponsored wage-less work schemes. Recent withdrawals by high-street firms that had been involved in the Jobcentre’s nominally voluntary ‘work experience’ scheme has put politicians on the defensive forcing them to emphasise the (dubious) voluntary nature of the scheme. However the same defence cannot be made of the coalition’s flagship Work Programme, a compulsory scheme with a ‘mandatory work related activity’ component. But aside from the recent controversies surrounding workfare provider A4E relatively little has been said with regard to the Work Programme, which forces jobseekers as well as many sick and disabled Employment Support Allowance claimants into mandatory unpaid work through a number of private companies.
The Work Programme was introduced by the coalition government in June 2011, it was designed to replace the previous government’s Flexible New Deal, which Employment Minister Chris Grayling claimed had cost £31,284 per job (significantly more than anybody who passed through the scheme could have hoped to earn). The new programme, while mostly identical to the previous one, was intended to save money by paying the programme’s providers ‘according to results’. What this means is that, aside from an ‘attachment fee’ of £400-£600 per referral, Work Programme providers will only receive money from the government if the jobseeker finds a job; recieving a lump sum after six month and additional monthly payments if the claimant stays off benefits for up to 18 months. That, at least sounds fair enough, doesn’t it?
How does a programme that doesn’t create jobs help people into work?
The answer to the question can be summed up by quoting the government’s own report: “There is little evidence that workfare increases the likelihood of finding work.” The Work Programme doesn’t create new jobs, it simply takes them out of the ‘job market’ and channels them through providers that effectively operate as state-subsidised job agencies with the ability to offer significant incentives to employers.
Work Programme providers spend their time searching job listings and contacting employers trying to persuade those that are hiring do so through them.
The benefit to the recruiter is that they get the staff they need without paying for ads, agencies or going through a long-winded recruitment process; they also get a worker whose wages they don’t have to pay for a set period of time, as well as the opportunity to see whether the worker is up to the job. At the end of the trial the employer is under no obligation to hire the worker, indeed they are perfectly entitled to go back to the Work Programme provider and ask for another person to trial for free.
Therefore, as a result of the Work Programme, vacancies that would have been advertised in newspapers, through the jobcentre, on websites or through employment agencies and filled by jobseekers at their own volition are now filled through workfare providers. On the whole the existence of the Work Programme means that there are fewer jobs for jobseekers to apply for.
How receptive the companies are to these offers depends. Recently Sainsbury’s (who had been taking wage-less staff through the Jobcentre’s voluntary ‘work experience’ scheme) described ‘persistent’ efforts by A4E to persuade store managers to recruit through them, in spite of repeatedly asking them to stop. The benefit to the workfare provider comes, of course, from the state handout that they will receive if the jobseeker does manage to find a job.
How can we fight the Work Programme?
Unlike the jobcentre scheme which tends to rely on national organisations for its work experience scheme, workfare providers have the resources to target smaller, local firms. So while big companies are always sensitive to having their brand-name tarnished through being associated with employment practices that exceed the socially acceptable level exploitation; smaller, local companies are perhaps less so, not to mention less likely to be named-and-shamed in the press.
As such, strategy of targeting companies taking wage-less workers and pressuring them to withdraw is much more problematic when it comes to the Work Programme. However there are serious flaws in the system that may make it possible to attack the providers themselves. The Work Programme’s funding model has serious weaknesses that are heightened at a time when there are few jobs available into which they put people. Workfare providers have been arguing for a revision of targets and funding in order to prevent the programme’s possible collapse, with some smaller providers complaining that the funding model will force them into bankruptcy.
Chris Grayling has stated that within the next year he “will be very surprised if we do not see a significant number of [work programme providers] fall away.” If smaller providers start go out of business the scheme could become the remit of number of large companies; furthermore if providers continue to struggle to fulfil the targets set for them they risk having their contracts terminated. Even prime contractors like A4E, Avanta and security giant G4S are not free of risk. All the while the declining state of the labour market is likely to mean ever diminishing scope for profit-making so anything that makes the jobs of Work Programme provider more difficult adds a further disincentive for them to continue in their current contracts.
The government is unlikely to allow its flagship workfare scheme to collapse, so reform may be inevitable but if pressure on the government continues over workfare it will be difficult for them to announce a reduction in performance targets that and/or an increase in funding that is necessary to keep it afloat.
Workfare has been running in one form or other since Labour introduced it the late 90s. In spite of cost and evidence all three of the major parties remain committed to it so the only way to combat workfare is a sustained campaign of direct action that costs the companies seeking to profit from the scheme more than it’s worth.