Bungling Employment Minister Chris Grayling was quick to tell us that last week’s appalling Work Programme performance figures were not to be taken too seriously as ‘revised’ figures will be released in Autumn.
This will give Welfare to Work companies more time to pick up some ‘job outcomes’ from people who have got jobs under their own steam. With claimants sentenced to two years on the Work Programme, the odds are that eventually many people will find work despite the scant help offered by welfare to work training companies.
This is just one of the perfectly legal ways that Welfare to Work companies can cook the books. Below is a handy guide to what these shysters are really up to behind the scenes.
The Australian Government recently announced an investigation into their own Welfare to Work sector after it was revealed that many companies were picking up lucrative Government fees for placing people in jobs that individuals had actually found themselves. This is known as ‘rorting’. In the UK this practice is entirely legal and even encouraged.
Recent leaked documents revealed how the fraud ridden A4e were instructing staff on how to claim a job outcome fee, which could be worth up to £13,000, even when someone has found themselves a job before formally joining the Work Programme. More often claimants are harassed, sometimes for months, into providing details of any employment they may have found during or after leaving welfare to work provision. Welfare to work companies have hoodwinked this and previous governments into believing that no-one is capable of getting a job without first attending a motivational training session or having an A4e advisor massacre their CV. The truth is that people find themselves jobs everyday with no help at all from welfare to work vultures. There is no obligation to tell Work Programme providers where you are working should you find a job.
Many Welfare to Work companies, and larger charities who may have Work Programme sub-contracts, often have other funding in place aimed at helping people find work or gain qualifications. These could be European Social Fund (ESF) contracts, lottery money or even sub-contracts to deliver training for local colleges. Despite the Tory lie that they invented payment by results, these contracts will usually be ‘output based’. This has been the standard arrangement across the sector for 20 years, and means payment is dependent on securing a certain number of job outcomes or qualifications.
As an example, a charity may have an ESF contract to work with long term unemployed people. They are paid depending on how many people they place into work. Should they also have a Work Programme sub-contract then they can sign participants up to the Work Programme as well, meaning they get paid twice when anyone finds a job.
It is not unheard of for providers to buy job outcomes from other providers who are operating different contracts. This can be done simply by using a combination of threats and bribes to encourage claimants to fill in paperwork to sign them up to the Work Programme. A4e are notorious for using vouchers to encourage certain behavior, such as forcing people to just sign the damn paperwork and then they can leave.
Another form of double fund is when a provider has a contract to carry out some form of public services, for example providing security for a major international sporting event. This leaves Welfare to Work companies like Serco and G4S with two lucrative opportunities. Firstly they can mandate people on welfare to work schemes to workfare to carry out the public service contract, saving a fortune in wages. Secondly they can cherry pick their Welfare to Work participants and employ them on the public service contract picking up fat job outcome fees in the process. A4e are notorious for staffing their own company with participants from their welfare to work provision and claiming job outcome payments. This is entirely legal.
Friends and Family
Like all of us,when in trouble the Welfare to Work industry calls on friends and family for support. Staff will be encouraged to hunt down unemployed acquaintances and family members. Participants in welfare to work schemes may well be asked to do the same, with promises of bribes in the form of bonus payments or vouchers if they can track down an elusive ‘job ready’ candidate. Job Ready candidates are the Holy Grail of the welfare to work industry – representing as they do free money. These are people quite capable of, and quite likely to find a job under their own steam. When they do the provider picks up a payment just as long as they’ve managed to convince them to sign the right paperwork.
A variation on this theme is using a form of mass outreach to gather multiple sign ups to welfare to work provision. This could involve a bunch of A4e spivs descending on an independent living centre, homelessness project or anywhere else they know they will find lots of benefit claimants. The company can then sign up claimants en masse, no doubt after giving some gushing presentation about how wonderful their provision is.
The company knows that some of these people will get jobs under their own steam. Even if they don’t they will still pick up between £400 and £500 pounds as an ‘attachment fee’ on the Work Programme. So should a welfare to work company manage to sign up five claimants on sickness benefits they will receive two and a half grand, just for an afternoons work. If just one of those people happens to find a long term job, then the company can claim up to a staggering £13,000.
The company doesn’t even have to do anything but sit back and watch the money roll in. This leads nicely onto …
Creaming and Parking
This is the practice under which the easiest to help are creamed off and given intensive support (or harassment, often in the form of pr0longued workfare) to get them off benefits and into a job – any job. These are people who would have got jobs themselves, often skilled workers or graduates. As to everyone else, well they can be left to rot, or parked as it is known.
Under the ‘black box’ style of provision on the Work Programme, welfare to work companies are able to almost anything they like to ‘help’ someone back into work. This can include doing nothing at all and in fact that makes good business sense. It’s a numbers game. Some of even the hardest to help will find work on their own, meaning yet more money for providers. As to the rest, well the company already have the attachment fee in the bank.
The most lucrative way to manage the hardest to help is to not spend a penny on them. This is far more profitable than throwing endless resources at people who the welfare to work companies know are unlikely to find work.
Working Tax Credit
Working Tax Credit is payable to people in self-employment who work for 30 hours a week. It is paid at a rate of £20 a week less than the dole, but claimants no longer have to sign on. Claimants do not have to be earning any money from their self-employment to claim Working Tax Credit, although in the long term this will raise alarm bells with HMRC.
Last months unemployment figures revealed that a huge rise in the number of people becoming self-employed. There is some anecdotal evidence that welfare to work companies are ‘encouraging’ people to sign off and become self-employed. Companies can claim outcome fees should this happen.
Working Tax Credit for self employed people meets many of the aims of Universal Credit, the new benefits system being introduced in 2056. Claimants can easily take up short periods of part time work, casual work or self employed work and declare it quite legally without losing benefits. With the payments set at just over two thirds of dole payments and far less administration, it also saves the tax money as well. Unfortunately Universal Credit will end all this for anyone who can’t prove they are earning the equivalent of minimum wage for 35 hours a week.
If welfare to work firms are bullying people into self-employment the claimants will have their lives devastated when the new regime comes in if they have not sustained the necessary income. Even before then, HMRC regularly make checks to determine whether someone is genuinely working 30 hours a week on their business. Should the HMRC decide they aren’t, then claimants can find themselves not just back on the dole, but in debt for the tax credits they have already been claimed. Not that welfare to work company bosses will care. They’ll be off mansion hunting with the money like Emma Harrison by then.
Workfare is slightly different, but once again it is a mechanism which helps welfare to work companies gain tax payer’s cash rather than actually reducing unemployment. Sending people on workfare is cheaper than having them sitting on job search training courses for starters. More importantly it is a way for welfare to work companies to mop up any jobs that may have otherwise gone to unemployed people who aren’t on their provision.
It is noticeable that many workfare schemes have involved large employers like Tesco or Holland & Barrett. If a welfare to work company can get their foot in the door with a big company they can effectively take over their recruitment. Where Tesco might have once approached the Jobcentre with 100 jobs on offer, A4e can step in and promise them fives times as many workers for the same dosh. The pay off is that Tesco take on the number of paid staff they were planning to recruit anyway and the welfare to work companies can claim an outcome fee for every job. No jobs are created by doing this, and indeed they may even be lost as Tesco now have a glut of unpaid labour. So even when Welfare to Work companies are at what they pretend is their best, they are simply moving unemployment around. As usual it’s claimants who lose out as the job market shrinks and unemployed people are forced to work without pay.
These are just some of the scams that enable welfare to work companies to pick up huge wads of tax payers cash for doing basically nothing. They are all more or less legal, and no-one’s paying that much attention anyway. Employment Minister Chris Grayling, like ministers before him, needs his welfare to work provision to be a success. Scams like these help boost the dire performance figures that the welfare to work sector achieves.
The welfare to work sector is one big scam and always has been. It began under Labour and now a Tory Government is throwing £5 billion at these crooks.
This doesn’t mean unemployed people don’t need and deserve support. Decent IT provision, internet access, quality advice on producing CVs, help with fares to interviews – all of these things can be vital for people trying to get back into work. Unfortunately there is a scant supply of such services on the Work Programme.
Even better would be high quality acredited training, that leads to real skills and real qualifications. NVQs were once available as part of welfare to work provision. But that’s seen as old fashioned by welfare to work companies these days. NVQ assessors are expensive after all.
The new style of black box welfare to work provision ranges from endless workfare to abandoning people to their own devices. Anything that’s cheap will do. And still the cost to the tax payer rises. Welfare to work companies are laughing at us all the way to the bank. And Chris Grayling’s career depends on the racket continuing.
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