How has welfare-to-work become big business?

Today, JobCentre staff who are members of PCS are on strike “over oppressive working conditions and unrealistic targets.”

“Some customers may say they intend to self-harm or kill themselves as a threat or a tactic to ‘persuade’, others will mean it. It is very hard to distinguish between the two … For this reason, all declarations must be taken seriously.” (DWP guidance, April 2011)

April, 2011: a whistleblower at the Department of Works and Pensions admits:

“Suddenly you’re not helping somebody into sustainable employment, which is what you’re employed to do,” he said. “You’re looking for ways to trick your customers into ‘not looking for work’. You come up with many ways. I’ve seen dyslexic customers given written job searches, and when they don’t produce them – what a surprise – they’re sanctioned. The only target that anyone seems to care about is stopping people’s money.

“‘Saving the public purse’ is the catchphrase that is used in our office … It is drummed home all the time – you’re saving the public purse. Feel good about stopping someone’s money, you’ve just saved your own pocket. It’s a joke.”

I got pulled up for saying Good Luck to a customer - it's not in the script

Video: A Jobcentre Plus whistleblower has revealed to the Guardian how pressure to cut costs is leading to vulnerable claimants being ‘set up’ so their benefits get stopped

A few days later, Iain Duncan Smith made a public statement claiming it was “claptrap” that anyone would “hand out edicts to staff to sanction three people”, and said the story was a “conspiracy”. Unfortunately for IDS, further email evidence showed that

individual or group targets are being imposed to stop people’s benefits at offices across the country. In some cases staff have claimed they have been threatened with sanctions themselves if they do not reach the targets.

May 2011: a senior jobcentre employee who has worked for the DWP for more than 20 years sends a new guidance document on dealing with threats of suicide or self-harm:

“Absolutely nobody has ever seen this guidance before, leading staff to believe it has been put together ahead of the incapacity benefit and disability living allowance cuts.”

The employee, who asked to remain anonymous, said: “We were a bit shocked. Are we preparing ourselves to be like the Samaritans? The fact that we’ve dealt with the public for so many years without such guidance has made people feel a bit fearful about what’s coming.”

The team leader said in May 2011 that the guidance had alarmed the team:

“We’ve suddenly got this new aspect to our job. The bigger picture is people here are wondering how savage these cuts are going to be. And we’re the frontline staff having to deal with the fallout from these changes. “

On 1st July 2012, CorporateWatch reports:

139,000 sanctions were handed out to Jobseeker’s Allowance* claimants in 2009 but this more than tripled to 508,000 in 2011, the coalition’s first full calendar year in government.** There was little change in the number of people signing on in this period, meaning a much higher proportion of people have had their benefits cut.*** In February 2011 for example, 1.44 million people were claiming JSA compared to 1.42 million in 2009. 51,000 sanctions were imposed in the former month, compared to 9,000 in the latter.

In January 2012, a Guardian reporter visited one of the G4S work programme centres, subcontracted to Pertemps:

One yellow-faced, grey-stubbled man says nothing until the instructor asks if he is all right, and he replies that he is on morphine because he is recovering from an operation to remove two-thirds of his pancreas and bits of his spleen. “I’m a bit drowsy, from my medication. That’s why I don’t think I will get a job.”

He is 53, and before this illness has been working without break since he was 16.

Sitting opposite him, a 57-year-old ex-British Aerospace employee, who was made redundant two and a half years ago, decides he won’t be signing up, not least because he is suffering from prostate cancer, has just finished a course of radiation and is undergoing hormone therapy “I feel shocking,” he says.

“These personal development courses … I can understand the point of them if you’re 18, but if you’ve worked for 40 years … I don’t need a computer course – I could run one myself.”

David Cameron made a speech on 25th June 2012:

The truth is we can’t just throw money at the problem and paper over the cracks.

The time has come to go back to first principles; to have a real national debate and ask some fundamental, searching questions about working-age welfare.

What it is actually for.

Who should receive it.

What the limits of state provision should be and what kind of contribution we should expect from those receiving benefits.

Let me take each in turn.

As I do so I want to stress now that these are not policy prescriptions; they are questions that we as a country need to ask in a sensible national debate.

FareShare, which uses food donated by supermarkets to provide free meals to food banks, breakfast clubs, and other charities, says it can’t keep pace with demand and doesn’t expect it to stop for five years. Lindsay Boswell, chief executive of FareShare, said:

“We are experiencing ridiculous growth. The only brake is how much food we can get out of the industry. We have the operational capacity to deliver more food and the charities that want to take that food.

FareShare said the food it distributed in 2011-12 contributed to more than 8.6m meals, benefiting an average 36,500 people a day via 720 organisations that deal with people in food poverty. Its long-term plans are to triple the numbers of people and charities it supplies. Along with charity shops and payday loans companies, food banks have become one of recession Britain’s high growth sectors. Originally set up to support homeless individuals, food banks report they increasingly serve families hit by benefit cuts or unemployment, and low-income working households who can’t make ends meet.
FareShare said that in 2001 nearly 42% of the charities it supplied had reported a “substantial increase” in demand for food, and that four out of 10 said their budgets had been reduced by public spending cuts. It had seen a 40% increase in demand for food from breakfast clubs, which supply free early-morning meals to underprivileged children.

In April 2011, one personal adviser at a Job Centre confirmed:

“On the question of tricking customers – it’s quite true. You box them in so that they go wrong themselves. The whole system is now orientated to stopping rather than enabling.”

He said people with poor English skills were often targeted in his office. “For example, an African man who had managed to get part-time work and was studying English. His jobsearch was far more adequate than most, but managers specifically spent time going through it and comparing it to his agreement to see where they could trip him up. It was deemed inadequate and he was sanctioned. It’s easy to sanction these people because he didn’t know what was going on.”

Another jobcentre employee with several years’ experience said: “If staff are chasing targets, they will themselves target the easiest [claimants], for example people with learning disabilities, or people with English as a second language. It’s the easiest way to meet those targets under pressure.”

In April 2012, the Mirror found that between January and August 2011,

1,100 claimants died after they were put in the “work-related activity group”.

This group – which accounted for 21% of all claimants at the last count – get a lower rate of benefit for one year and are expected to go out and find work.

This compares to 5,300 deaths of people who were put in the “support group” – which accounts for 22% of claimants – for the most unwell, who get the full, no-strings benefit of up to £99.85 a week.

Iain Duncan Smith, who thinks it’s “snooty” to ask for a day’s pay for a day’s work, is praised by David Cameron as having

driven forward welfare reform on a scale and with a determination not seen since World War Two.

He is a great, reforming Minister, with a passion and commitment that shine through.

And he is delivering remarkable results:

Over 400,000 more people in work than in 2010.

  • In August 2009, unemployment in Britain had gone up by 220,000 to 2.435 million, 7.8% of the population, the highest level since 1995.
  • In October 2010, unemployment in Britain had gone up by 35,000 to 2.502 million, 7.9% of the population, the highest level since April 2010
  • In May 2012, unemployment was falling from a high at the end of 2011: the total number of jobless was 2.63 million, its lowest level since summer 2011, 8.2% of the population.

In the first eight months of Iain Duncan Smith’s “Work Programme”, so highly praised by David Cameron, jobcentres agreed to cut benefits in about 40,000 cases. But the private firms running the Work Programme, who are making millions from the fees paid by the DWP for each benefit claimant, actually refer nearly three times as many (110,000) for sanctions. Richard Whittell from Corporate Watch said:

“These figures give the lie to the government’s claims its welfare reforms are about helping people into work,” he said.

“By the time it’s finished, more people will have been sanctioned by the Work Programme than properly employed through it. Every month thousands of people are having their only source of income stopped and being pushed into hardship. Companies like Serco, Working Links and G4S may not be very good at finding people suitable work, but they’re dab hands at punishing them.”

In the most-publicised example, G4S – a major contractor for Iain Duncan Smith’s Work Programme – agreed to find and train staff for Olympics security. In December 2011, G4S agreed

to provide 10,000 guards for the venues, rather than the 2,000 originally asked for, increasing the value of the contract by almost £200m to £284m. This included £83m to cover labour, and a 12-fold increase in management costs, from £10m to £125m.

G4S also secured a 22-fold increase to cover uniforms – from £3m to £65m.

In a country with over two million unemployed, with six months to prepare, when they were tasked with getting unemployed people back into work, G4S were unable to deliver the 10,400 trained security personnel they had contracted for.

They were paid £284 million. They have donated £2.5M as a bonus to the armed forces personnel who were deployed in London during the Olympics to provide security instead of the civilian employees G4S had failed to locate and train.

During the Olympics, one of the G4S employees reported on 6th August 2012:

Over the last few days I’ve seen lots of people without x-ray training operating the machines. It’s a way of giving the screeners a break.

Some of the team leaders are stricter, and won’t allow this to happen.

But that means some screeners, including me, can spend most of the day in front of the screen – and you definitely start to miss things.

Even the screeners who have been trained aren’t always that good. I saw a row break out over a knife being missed. Luckily the bag searcher went running after the visitor as he headed towards the park.

G4S are clearly paranoid about being seen to do a good job. Every day we are visited by teams from Locog or the military who stand around with clipboards. The machines test us too, throwing out Threat Image Projections (TIPs). It makes running the Rapiscans like playing a computer game. I feel a real sense of achievement when I spot a TIP showing a gun or a packet of Semtex – although I notice a drop in success whenever I haven’t had a proper break.

Besides the £2.5M tip that G4S are giving the military for their 3,500 personnel who stepped in at the last moment, G4S are refunding £30m-50m of the £284 million we paid them “because of the failure to meet targets”. But they still intend to claim their £57 million “management fee”. Apparently the CEO of G4S tips at 4.38%.

Welfare-to-work is big business. (Literally, as far as the DWP are concerned: small-scale charities don’t get a look-in.) Sean Williams, appointed Managing Director of G4S Welfare to Work division in August 2010, came to G4S from the Serco Welfare to Work division (and had spent the six months “gardening leave” after leaving Serco playing backgammon).

John Harris notes that Serco, G4S, the infamous A4E, and Working Links, all operate in much the same way:

Similar statistics for other companies abound: Working Links referred nearly 12,000 cases for sanctions, Serco managed just over 9,000, and G4s came in at 7,780. Such is the upshot of the stock warning that appears on most of the correspondence sent to Work Programme participants: “If you do not attend this appointment, your benefits could be affected.” And how.

Of all of these hugely-profitable private companies, the only one so far to have welfare-to-work stopped was A4e, and not because it was doing better at sanctioning people than finding jobs – because it was having too many people indicted for fraud. They are still getting money from DWP to run training courses, though.

John Harris goes on to ask:

This is yet another one of those stories that come with a head-spinning sense of how much Britain has changed, under this government and its predecessor. Rewind 15 years, and imagine the spectacle of hugely profitable private firms pushing for thousands of people to be propelled into borderline destitution: the result would have been acres of coverage, and molten anger. And now? Even backbench Lib Dems are predictably silent, and Labour restricts its criticisms of a system it invented to technocratic hand-wringing, focused not on any kind of moral outrage, but whether everything’s working, and how much it all might cost.

In 2010, the Commons public accounts committee reported on Labour’s Pathways to Work scheme for getting incapacity benefit (IB) claimants back to work. This was effectively Iain Duncan Smith’s Work Programme under a different name: pay big corporations lots of money to find people jobs. Polly Toynbee points out:

Not only did contracted companies miss their targets by miles – but the DWP’s own Jobcentre Plus outscored them easily. The committee summoned two leading companies – A4E and Reed in Partnership – to give evidence. Sadly its findings seem to have been ignored as the government ploughs ahead with its near-identical scheme, only stopping to re-tweak the contracts.

The committee’s report is remarkably trenchant: ” The performance by the mainly private-sector providers was universally poor … £94m was spent on employment support that did not deliver additional jobs … Private providers have seriously underperformed against their contracts and their success rates are worse than Jobcentre Plus even though private contractors work in easier areas.” Despite that, the clamour has begun for jobcentres to be outsourced to private companies. That would put a stop to embarrassing comparisons between the two sectors.

But still, David Cameron is determined to pay big companies more to deliver less.

PCS general secretary Mark Serwotka said:

“With unemployment remaining high and our economy in the grip of recession, it is shameful that jobcentre bosses are still refusing to let their staff provide the kind of help and advice that people need.

“These call centres provide a vital lifeline. Enquiries are often complicated, and people struggling to find their way around the benefits system are often understandably desperate and upset, but staff are being forced to end calls as quickly as possible just to meet an artificial target.

“Our members care about the services they provide and they want to be able to help people properly, not have to fob them off.”

You can email to let them know you support their strike.

Rick Sullivan, PCS member:

We had a few chats with members of the public who now understand the job we WANT to do for them as opposed to the one we HAVE to do. I got the impression they liked the ‘want’ better!

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Filed under Benefits, Economics

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