Friday, 22 February 2013

The doesn't-workfare programme

The news that MPs have today rubbished the UK Government's Work Programme should come as no surprise. It's been malfunctioning for months, and it was clearly never to get into gear as quickly as Ministers wanted. But the scale of the debacle is surprising. As the Chairman of the Public Accounts Committee notes, 'of the 9,500 former incapacity benefit claimants referred to providers, only 20 people have been placed in a job that has lasted three months'. Overall, the figures for placing people in jobs are worse than if there'd been no intervention at all. I could create more jobs with a billion pounds by walking down any High Street and just spending it on new electronic gadgets. I'll give it a go, anyway.

It's the last in a series of blows to an agenda that's now an acute embarrassment to the Coalition. It comes just a few days after Cait Reilly and Jamieson Wilson's recent legal victory in their case against the Government, proving beyond doubt that you can't yet be forced to work at Poundland. What did the judges say? Ah, yes, that's right. The regulations involved weren't approved by Parliament. So they are null and void. Until the regulations are legally written up and embodied in a vote, no-one can be forced to take part. No wonder Iain Duncan Smith (above), the Programme's boss in the Department of Work and Pensions, sounds so angry.

To be fair to these ideas, paying companies by results to get workers placed isn't necessary a crazy course of action. It was worth a try, despite the Keystone Cops-style implementation. Experience in North America and elsewhere shows that marginally more people can get themselves into long-term jobs than if they'd been left to moulder - though that depends on the existence of a robust labour market that's doing some hiring. There's absolutely no evidence whatsoever that tring to lever people into jobs 'works' on the macroeconomic scale. And the public is in general very strongly in support of claimants either having to accept jobs they're offered, or at least having to do some form of community work, in return for their benefits - a form of imagined and collectivist social contract that decades of neo-liberal governance has failed to wipe out.

But be in no doubt: actual success with this sort of plan depends on creating some jobs to place the unemployed in. And the UK labour market's not been doing as badly as we once thought it might. But without stronger growth (or, er, any growth), all this talk of 'workfare' is really a bit academic . Recently 1,700 people applied for just a handful of jobs at Costa Coffee. No amount of supply-side tinkering will get over that fundamental reality.

I'd go further, too. Having to work where you're told cuts the efficiency of the labour market. It can trap people in jobs they're not interested in, do badly and then leave. It reduces worker mobility and prevents people looking for work. And the real hard core of unemployment is among those on long-term disability benefits, who often require a lot of specific, tailored help that just doesn't seem to be on offer under the Work Programme. It's too early to say it's a complete failure yet, but we're starting to get the hammer and chisels ready for its gravestone.

What did we say on this blog, almost exactly one year ago? Well, this is what I said, and today's news is confirmation:
Two things are for sure and beyond dispute: rates of labour force participation among those who have and haven't been on these schemes are very similar a few months down the line. And without macro-economic growth and [some] stimulus, the job market will continue to get worse for the next year or two, meaning that all these programmes are swimming against the tide. Experience in the USA and Canada leads us to one conclusion: these types of programme need the provision of proper training, and a buoyant labour market. Conclusion? They will probably never meet their UK targets.
Don't say you weren't warned.

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