We don't really have 'workfare' in the UK. But perhaps we should

Friday, 02 March 2012

We don't really have 'workfare' in the UK. But perhaps we should

Synopsis

“Workfare” has been in the news. Between hysteria from the Socialist Workers about "slave labour" and fervent protestations from the government, there’s not been a lot of clarity on what it is we’re actually talking about.

The root of this whole debate is the attempt to get back to the idea of ‘something for something’ – that the long term unemployed should be required to do some work in return for their benefits.

This is not a new idea. The founders of the welfare state intended it to be a contributory system and expected benefit claimants to take any work that was available. But over time the system drifted away from these principles, and a culture of dependency emerged.

More recent governments, both Tory and Labour, have been trying to reintroduce these principles. Fortnightly sign-ons were established for Jobseekers Allowance by the Major government in 1996. The last Labour government (rightly) introduced some compulsory “work for your benefit”-type schemes, building on a pilot project the Tories had initiated.

Gordon Brown made great play of this in 1998 when he promised that there would be "no fifth option" for the young unemployed. He promised that people would either be in subsidised work, work experience through a government scheme, the voluntary sector, or training.

Under Labour’s “Flexible New Deal”, this meant that those who had been unemployed for a period of time could be made to work, and could be sanctioned for non-compliance.

So this isn’t a new idea. Nor is it a particularly controversial principle. The polls show that 80 per cent of the public agree that those who have been out of work for a year should be required to work for their benefits.

Nor is it unique to the UK. Countries like Australia, the US, Germany and Canada have introduced much tougher schemes than the UK.

In fact, arguably none of the schemes currently operating in the UK amount to “workfare” in the sense that it is practiced in other countries. In some US states all claimants who claim welfare for more than a couple of weeks are made to do community work for their benefits – for example, a full working week cleaning streets, or clearing litter and graffiti. Likewise Australia’s “work for the dole” scheme does exactly what it says on the tin. Our so called workfare schemes don’t really work like this.

Is there any real 'workfare' in the UK?

Today, there are essentially five ways an unemployed person might be asked to do some work in return for their benefits:

The Mandatory Work Activity Scheme. This is an unpaid community placement programme, typically of four but up to eight weeks, made through referral from a Jobcentre Plus Adviser. The initial findings from the scheme suggest that 50 per cent of people asked to do this compulsory work stop claiming benefits. They either sign off or don’t turn up. Either way it suggests that they didn’t need the money. This is the closest thing to workfare in the UK – but it is really only used as an anti-fraud programme. Claimants do not get put on it because they have spent a particular amount of time on benefits, but because their job centre advisor thinks they are working on the side, or deliberately trying to avoid getting a job.

The Work Programme. This is the government’s flagship assistance scheme for the long-term unemployed, in which private companies are paid to get claimants into long-term work for up to two years. The companies are given flexibility on how their can help claimants. Despite the name, most of the activities are actually about helping people write CVs, prepare for interviews and fill in applications. However, the scheme can also involve mandating certain activities – things like turning up to interviews, training courses and applying for a certain number of jobs. It can involve mandating compulsory work experience, but most providers prefer to make this voluntary.

The Community Activity Programme. This is a 6 month programme of unpaid community work, targeted at very long-term unemployed people who have not found employment through the Work Programme and may have lost the habits of working routine. Actually, this has not begun properly yet – it will start in April 2013. At present there are some pilots for claimants who had ‘cycled’ through Jobcentre Plus and the old 'New Deal' schemes). These claimants will typically have been on the dole for more than two years, and for whom previous schemes have all failed to get them into work.

Sector-based work academies. A voluntary training and job experience scheme of up to six weeks with an employer, funded through the Skills Funding Agency, with a guaranteed job interview on completion.

Finally there is the Work Experience Scheme – a voluntary scheme for the under-25s who have been claiming for between three and nine months, with placements for eight weeks. It is targeted at young people with little experience who are furthest from the labour market, giving them experience and skills in the industry they want to work in.

It is ironic that the debate has focused around the work experience scheme, given that it was voluntary. It is probably the least like “workfare” of any of the schemes above. The prospect of a sanction was only there to protect (particularly small) employers. The government didn’t want them to get cheesed off if claimants turned up their work experienced and then bunked off. There was potential for a sanction of the withdrawal of some benefits for two weeks (which only applied after the first week). And it seems that only 0.067 per cent of claimants were sanctioned for dropping out. And now that has been removed, so claimants can just leave the voluntary placement if they don’t like it at any time.

Is workfare fair? Does it work, and if so, why?

Let’s get back to “real” workfare schemes. Some people will always object. But giving people a push to get the help they need – work experience, the habits of a working routine, doing training – isn’t something we should be ashamed of.

Evidence from other countries, and our limited experiments in the UK, suggests that asking for something for something can dramatically reduce the number of people on unemployment benefits.

Just before the 1997 election the Department for Work and Pensions published the results of workfare trials in Hull and Medway. These showed that claimants in the pilot areas were “more likely to get a job than similar clients in the comparison office.”

Work by the OECD looking at schemes around the world suggests workfare policies can help people move off benefits faster.

And in the US, there is a vast literature on the shift towards workfare in the 1990s, with the balance of the evidence being that “The policy changes of the 1990s were a significant factor in the increases in labour market involvement, reductions in poverty, and reductions in caseloads.”

Many opponents of workfare don’t argue that it is ineffective, but argue against it in principle. But if workfare can work, then I believe it is fair.

There is nothing compassionate about abandoning someone to life on benefits – with all the scarring effects on relationships, children, mental and physical health that it brings. The suicide rate is ten times higher among the unemployed.

Clearly, workfare is not the solution for everyone. Most people claim benefits for a period, then quickly find a job. The majority of the time there is no problem. Evidence from various schemes (including Germany) suggests that workfare can help move the long term unemployed back into jobs, but is counter productive for those who have recently been in work (an unsurprising conclusion).

The answer is to gain a much better understanding of each welfare claimant than we do now, and pilot a number of workfare schemes for those people who it might help to move into work.

There are lots of other unanswered questions about how workfare might work best. For example, putting people into placements with employers has advantages and disadvantages.

On the one hand it gives people experience and contacts in the real economy, in a way that sweeping the park might not. On the other hand we need to avoid displacing existing jobs. And it has been fascinating to see how the involvement of the private sector has coloured the debate. Hard left groups have been much more motivated by the involvement of Tesco (private sector baddies) than they have been by the principle of workfare – which governments have been experimenting with (largely unnoticed) for over 15 years.

Though there are many questions – and the government needs to experiment and gather evidence carefully – workfare seems to have real potential to reduce unemployment. And we've barely started to scratch the surface.

 

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