Tag Archives: Youth Contract

How The DWP Bribed Employers To Break Age Discrimination Laws With A ‘Golden Ticket’ Worth £2,275

wage-incentive-goldenticketJobcentres bribed employers with ‘golden tickets’ worth up to £2,275 to hire young people over older workers despite warnings from lawyers that this Wage Incentive scheme was probably illegal.

Figures released this week show that over one hundred thousand ‘Wage Incentive’ payments were doled out to employers before the scheme was quietly abandoned last Summer.  These payments could be claimed from the DWP every time an employer recruited someone under 25 who had previously been on benefits.  An early evaluation of the scheme found that it was riddled with abuse, with employers making backdated claims for workers they had already hired, or even using Wage Incentives as a tax-payer funded rolling stock of temporary staff.  This report came alongside warning from the DWP’s own lawyers that companies who took these payments faced the risk of legal challenges under age discrimination laws from older workers denied jobs .

Despite these warnings Wage Incentives continued and by the time a second evaluation was published all mention of employers abusing the scheme had magically disappeared.  What this evaluation found however was the huge amount of pressure Jobcentre staff were being placed under to encourage employers to hire younger workers and claim Wage Incentives.  According to the report some staff felt that older claimants were disadvantaged by ‘persistent pressure’ to concentrate on Wage Incentive jobs and that targets set by the DWP were unfair.

Both evaluations found that ‘self-marketing’ Wage Incentives proved one of the most effective ways to sell the scheme to employers.  This included encouraging young people to add details of the potential bribe to their CVs, mention it at interviews, or present employers with a shoddily designed ‘golden ticket’ like the one pictured above.  According to one Jobcentre worker: “The line from employers is usually – if I see two candidates exactly the same and one is eligible and one is not, I’ll take the wage incentive candidate.” 

In other words employers would hire a younger worker over an older one purely because they were paid by the government to do so.  It is clear that this discriminates against older workers and it seems likely this is one of the reasons why Wage Incentives were quietly scrapped in August last year.

Amusingly the DWP are now pretending that Wage Incentives were only ever intended as a “temporary measure to encourage employers to offer sustained paid employment to young people during the recession”.  This is transparent bollocks.   There was never any intention that this scheme was temporary and it was introduced and stayed in effect long after the official period of recession.

The truth is that Wage Incentives were unfair, ineffective, hugely expensive and probably illegal.  But that’s all just business as usual at the DWP and not usually enough to cause one of Iain Duncan Smith’s crazy schemes to be brought to an end.  Yet significantly, even many grasping employers found Wage Incentives too much to stomach.  According to the recent evaluation one Jobcentre said:  “Some of our large and national employers won’t take wage incentive on because they don’t want bad or adverse publicity, if they think it looks like a bribe.”

Astonishingly the report says that in “one or two extreme cases, larger employers … were so opposed to the wage incentive that they would consider only recruiting candidates aged 25 and over” adding that “Other employers have said ‘it’s unethical, we don’t want to know about it”.

Don’t believe the fucking hype, employers have not suddenly turned into a bunch of hippies, they are just worried about their reputations.  If anything this shows the success that groups such as Boycott Workfare and claimants themselves have had in exposing the exploitation and naked profiteering at the heart of DWP backed schemes.  Everything the DWP try and do is toxic now.  Let’s make sure it stays that way.

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The Mass Corporate Benefit Fraud Being Shrugged Off By The DWP

cash-backhanderA key component of the Government’s initiative to help more young people into work is riddled with abuse by both employers and welfare-to-work companies a report quietly released this week has revealed.

The Wage Incentive is the only one of the flagship youth employment measures within the Youth Contract which isn’t workfare, although participants are only paid minimum wage.  The scheme pays out £2,275 (or  £1,137.50  for part time positions) to employers who employ someone on the Work Programme between the ages of 18 to 24 for a minimum of six months.  160,000 places are to be funded over the next three years.

The scheme, which even the DWP admit may be illegal under age discrimination laws, will cost up to £350 million in total.  If the current shambles continues then a third of that, over £100 million pounds, could be handed out to companies claiming for jobs which are not eligible under the rules.

The DWP had attempted to avoid this simply becoming a free pay cheque every time a company employs someone under the age of 25 by forbidding employers from claiming the subsidy for people they have already employed.  The Q&A for employers using the Wage Incentive says:

“I’ve recently filled a vacancy with a young person who might qualify for a wage incentive. Can I claim retrospectively?

No. The aim of the wage incentive scheme is to incentivise employers into giving young jobless people a chance in a weaker market by encouraging them to fill vacancies with young people. If the young person is already in work the Wage Incentive should not be necessary.”

But this week’s report, which is based on a survey of employers who have received the payments, reveals they are doing just that, and in huge numbers.  The report shows that 27% of employers surveyed claimed the payment after the person was already employed by the company and 15% during the recruitment process.

This means almost half of the payments are going to employers who haven’t created a single new job.  In fact, just 9% of employers said that they had created a new vacancy due to the scheme.

The DWP are aware of this abuse but don’t seem interested in asking for tax payer’s money back.  Instead the:  “DWP are exploring ways to strengthen the message to Work Programme providers and Jobcentre Plus staff that employers should be informed about the wage incentive scheme prior to, or during, the recruitment process”.

As things stand, when an employer hears about the Wage Incentive for the first time, then all they need to do is look over their books to see if they’ve employed anyone under 25 who was on the Work Programme recently and they can then claim a whopping £2,275 subsidy.

The report also tells how some Work Programme providers are encouraging young people on the scheme to use the payment to bribe potential employers into giving them a job at interviews.  Candidates have also been encouraged to add details of the scheme to their CVs ‘in order to give them an edge over other candidates’ – casting further doubt on the legality of the Wage Incentive under the Equalities Act.

The scandalous abuse of the scheme doesn’t end there.  Whilst the Wage Incentive is supposed to be directed at long term jobs which last at least six months, only 63% of the survey respondents said the positions they had  offered had been permanent or open-ended.  14% of jobs subsidised on the scheme were described by employers as temporary or casual.

There is even evidence that some employers are simply sacking young people after six months to take on a new placement, or using the scheme to raise capital.    Here the report can speak for itself:

“There was some indication that on occasion medium-sized employers were using wage incentives for multiple recruitment to fixed-term positions as a way of injecting capital into the business. For example, this could entail recruiting six labourers on six-month contracts and using the funding from wage incentives to buy vans or other equipment.

There were also instances of employers applying for wage incentives for a series of temporary contracts within the same post, meaning that employees would only be employed for a maximum of six months. The employed individual may then be regarded as being less attractive as a recruit, in comparison with other applicants who were still eligible for wage incentives. Work programme providers felt this practice was more likely to occur for unskilled jobs as replacing employees every six months would not significantly impact efficiency.

Both of these scenarios are in breach of the terms and conditions of the scheme to which all employers must sign up to when applying for the wage incentive.  DWP are exploring ways of strengthening the messaging about the rules of eligibility “

It is little wonder that employers are abusing the scheme when it is being run by the fraud riddled welfare-to-work sector who are currently using every trick in the book to improve their dreadful performance figures.

The Wage Incentive is good business for everyone concerned, except for the young people paid a pittance for six months and then thrown back on the dole.  Work Programme providers get paid a job outcome fee, the employer gets a bung themselves and the DWP get to pretend that the scheme is working.  There is barely any criticism of this appalling abuse of public money in the report which even hints that the subsidy to employers should be increased.

The good news for the DWP is that employers think the scheme is a fairly straightforward way of stealing tax payers money.  80% of employers thought there would be ‘a small amount of work or not much at all’ when making a claim and most respondents said they would be all to happy to do it again.  At over two grand a pop simply for employing someone who would have been offered a job anyway, this is hardly surprising.

The report, which has to be read to be believed, can be found at: http://research.dwp.gov.uk/asd/asd5/report_abstracts/rr_abstracts/rra_828.asp

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Flagship Youth Contract Scheme To Cut Unemployment Might Be Illegal Admit DWP

youth-contract-illegalA document buried on the DWP’s website suggests that the flagship Wage Incentive scheme used to bribe employer’s into taking on younger staff, may be illegal.

The Wage Incentive is part of the Youth Contract and pays out a tidy £2,275 to employers for every full time staff member they recruit aged between 18 and 24.  Unlike most welfare-to-work schemes, employees recruited under the Wage Incentive must be paid at least minimum wage.  The document addressing the legality of the programme reveals however that employers who who take up the offer of free money from the DWP may find themselves in the courts.

Concerns are raised about whether this scheme breaches age discrimination laws.  The DWP’s answers seems to be little more than “we hope not”.

It would usually be illegal to only make a position available to a younger person unless it is: “a proportionate means of achieving a legitimate aim”.  This is similar to other anti-discrimination laws relating to employment which are usually used in social care or the entertainment industry.  This means for example that a white actor can’t sue a company for not letting him play Martin Luther King, or that a women’s refuge can legally only recruit female staff.

The DWP are crossing their fingers and claiming that bringing down youth unemployment is a legitimate aim.  But they don’t seem that confident as the document reveals:

“It is possible that a legal challenge could be brought against DWP. If this happened, we would strongly argue that the Youth Contract, including the wage incentive scheme, was justified”

They recently strongly argued in court that their workfare schemes were legal.  They lost.

But it is employers themselves who might find themselves in the dock.  The DWP warn:

“It is also possible that employers could face a legal challenge. If this happened, an employment tribunal would wish to consider the employer’s reasons for participating in the scheme. Each case will turn on its merits.”

It seems that Iain Duncan Smith is only to happy to risk other people’s money by tricking them into schemes of dubious legality.  The latest research reveals that the larger companies, who have legal departments, have by and large shunned the scheme.  This document, hidden away on the DWP’s website, may be one of the reasons why.

The document is available at: http://www.dwp.gov.uk/docs/wi-more-info.pdf

There’s more to come on this shabby scheme after the weekend tomorrow, I couldn’t wait.

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Every Liberal Democrat Is To Blame For Clegg’s Debt, Workfare And Poverty

Whilst he’s famous for destroying the educational chances of a generation, it is less well known that snivelling Nick Clegg is also behind a mass workfare scheme that condemns thousands of young people to unpaid work.

The Youth Contract, announced to much fanfare by Clegg in April, aims to bully a quarter of a million young people into working for free at places like Poundland.

Another part of the Youth Contract hands out so much in subsidies to employers and welfare to work companies that it would be just as cheap to employ the young people directly.

Under the ‘Wage Incentive’ part of the Youth Contract employers are handed £2,275 for every young person they employ on minimum wage for 6 months.  Astonishingly a further £1,200 is handed out to the Work Programme providers who arrange the job.  This is on top of the £400 attachment fee already paid to providers simply for signing up young people to the Work Programme.

To employ a young person on the minimum wage full time for six months  costs £3,884 in wages.  The amount handed out to both the employer and the Work Programme contractors in total under the Youth Contract is £3,875.

This toff Government, which has done so much to deride some of the poorest people in the country as scroungers, is quite happy to hand out huge wage subsidies to some of the richest corporations in the world.

Yet in a searing indictment of the current economic shambles, even doling out these huge sums to employers and welfare to work sharks has had no impact on youth unemployment which is still rising.

Meanwhile the mass workfare scheme is also on the brink of collapse.   High Street names like Holland & Barrett have been quick to distance themselves from unpaid so-called Work Experience schemes after storms of protests from their customers. 

Much like the Work Programme for long term unemployed people, Nick Clegg’s Youth Contract is costing hundreds of millions of pounds whilst failing to even make a dent on soaring youth unemployment.

The treachery of Clegg is perhaps best illustrated in his attitude towards young people.  In just over two years he’s gone from pledging free access to university to fobbing the young off to work in supermarkets for no pay.

No amount of attention-seeking apologies will be enough to rescue Nick Clegg and his party’s reputation.  The yellow stain in British politics is now little more than the worst kind of happy-clappy cult, happily cheering from the sidelines as the real leaders destroy the lives of millions.

Clegg’s pathetic apology means nothing and has been greeted with the contempt it deserves.  But every Liberal Democrat MP, Councillor, activist or member has blood on their hands now.  Every suicide due to the brutal Atos testing regime for sick and disabled people was voted for by Lib Dem MPs.  Children made homeless due to the savage housing benefit cuts were put out on the streets by the same scum.  Every young person forced to work for free, every closed hospital, every trashed exam result is down to Liberal Democrat party members too spineless to stop this onslaught or at the very least walk away and play no part in it.

The legacy of the Liberal Democrat party will be the destruction of just about every decent institution this country has, and there aren’t many to start with.  When brutal  poverty stalks the land, when healthcare is in the hands of private sector sharks and living standards are reduced to near third world levels for many, rank and file Liberal Democrats will exist as mere footnotes in history.  They will be the cowards who barely raised a word in protest as their leaders voted the country into a callous money-grabbing capitalist hell.

Ruin the Lib Dem’s Conference Weekend: Shut Down Workfare in Brighton

Clegg’s New Youth Contract Is Just Mass Workfare

This week the Government has been announcing the new Youth Contract, the latest magical wheeze aimed at reducing youth unemployment.  It’s no surprise that Chris Grayling has chosen to hide behind Nick Clegg during the fanfare as the whole expensive charade is little more than a mass give away to private companies.

Workfare and benefit sanctions are at the heart of the scheme, which will do little to reduce youth unemployment and may actually even increase it.  Not content with destroying the educational chances of a generation, Nick Clegg is now trying to force young people into unpaid work at any cost.

As ever the DWP are being less than honest about how the new scheme will work.  Work Experience, the workfare scheme which drew storms of protest last month, has been renamed ‘Voluntary’ Work Experience.  Clegg is promising 250,000 new ‘voluntary’ placements.  This will be full time unpaid work at places like ASDA and Holland & Barrett.

In reality this will be far from voluntary.  There is no mention of the other Government workfare scheme, known as Mandatory Work Activity, in the DWP’s announcement.  This seems strange because a recent Freedom of Information request reveals that a chunk of the £1 billion cost of Youth Contract is to be spent on this scheme, which as the name suggests is anything but voluntary.

Last year George Osborne announced that should young people refuse to go on the Work Experience, they “will be considered for mandatory work activity.”  In other words if you don’t go on workfare under the voluntary scheme, you will  be sent on workfare under the mandatory one.  The Guardian recently revealed this is already happening.

So workfare is not only well and truly still in place, but is being hugely expanded.  No wonder they got the insipid Lib Dems to take the heat.

As well as workfare the Government is promising over two grand in cash to employers should they take on a longer term unemployed individual.   Whilst this will mean they are paid minimum wage, it appears that young people will have no choice about where they work.  They will be mandated to work at minimum wage whilst the Government pays the bulk of their salary.  Then they will be laid off after six months to make way for the next subsidised worker.

Young people will have to have been on the dole for a year before being sent on this scheme.  The flaw in these plans is obvious.  If companies are paid two grand to employ someone who has been unemployed for over a year then why on earth would they employ someone who hasn’t.  A years unemployment is set to become the norm for young people as greedy companies hold back start dates until they become eligible for their state provided bonus.  Even if this helps to bring down longer term youth unemployment it will only be at the expense of the young people leaving school or becoming newly unemployed.

But that’s okay, because they can be sent to work for free on Clegg’s crazy schemes after just six months on the dole.  Temporary jobs that were once paid will be replaced with young people on workfare, waiting until they become lucrative enough for private companies to employ properly on minimum wage.  For six months.  And then along come a whole new crop of young people to exploit.  That’s the great thing about the young, they just keep coming.  The way things are going the likes of Tesco may never have to pay their workers again as this Government is so intent on throwing free labour at them.

The Youth Contract will cost £1 billion pounds, the bulk of which will be used to provide free labour for large corporations.  The Government’s other flagship scheme, the Work Programme, which also includes workfare, is set to cost £5 billion.  This money will line the pockets of poverty pimps like Emma Harrison, the former head of A4e now believed to be mansion shopping in any country that doesn’t have an extradition treaty with the UK.

George Osborne announced in his comedy budget that a further £10 billion is to be cut from the welfare budget.  Not content with mass homelessness and increasingly suicides, Osborne wants to take even more from the people with least.  Yet here the Government are, handing out money like sweets to private companies.

There is no evidence any of these measure are helping to reduce unemployment.  Common sense dictates that many will do quite the opposite.  The Government is refusing to release details of how many people have actually got proper jobs because of their ever desperate attempts at bashing benefit claimants.  This new mass roll out of workfare must be resisted every bit as strongly as all other attempts to force us to work for free.  It depends on major companies and charities taking up the scheme to make it work.  That is where the pressure must be maintained.  If they exploit us, we will shut them down.