That the results of the government’s welfare-to-work scheme
have turned out to be worse than if it hadn’t existed at all is certain to be a
disappointment for the ConDems, but for the rest of us it shouldn’t be a
surprise.
As most people are only too well aware, the economy is
contracting, jobs are disappearing, real incomes declining. But the targets for
the scheme were set in the run up to last year’s launch in the absurdly
optimistic expectation that the economy would improve.
The target set for the 18 contractors of getting 5.5% of the 2.4 million long-term unemployed
and people on sickness benefits a job for at least six months was hardly going
to make a dent in the jobless figures, but not one of them has achieved
anything like it.
Only 3.5% - that’s one in every 28 - of the people referred
to the Work Programme have found long-term jobs. In spite of this the work and
pensions secretary Iain Duncan Smith defended the scheme, claiming that over
50% of those who have been referred to the scheme have been taken off
benefits.
Either somebody is not doing their sums, or there’s now an
awful lot of people out there without jobs or benefits – just like in America .
And although the scheme is supposed to work on a
payment-by-results basis, making the contractors’ profits dependent on forcing
people off benefits, hundreds of millions of pounds have already passed into
their hands.
They include A4e – the subject of systemic fraud accusations
from its own internal auditor earlier this year, G4S - the company that failed
to supply the promised Olympic security force – and Ingeus, part of a global
corporation founded by the wife of Kevin Rudd, former Australian prime
minister.
There’s a group of voluntary sector groups also signed up to
the scheme which includes Mencap, the Citizens Advice Bureau, the Prince's
Trust and Action for Blind People. Well meaning? Maybe, but they’ve become
willing accomplices to this £5 billion torment of the sick and unemployed. Even
Charles Dickens would be appalled.
So what has gone wrong? The Employment Related Services
Association (ERSA), the lobbying group for the array of predatory companies
feeding off the unemployed and sick, claims that things are now getting into
gear and are set to improve.
The latest World Economic Outlook from the Organisation for
Economic Co-operation and Development promises something very different. Already
in July they predicted that unemployment in advanced economies would remain
high until at least the end of 2013, with young people and the low-skilled bearing
the brunt of what they euphemistically termed “the weakest economic recovery in
the past four decades”.
But four months later, things have got a whole lot worse. The
OECD has slashed its forecast for next year’s growth in the world’s advanced
economies from 2.2% to 1.4% and warned that the risk of a serious global
recession cannot be ruled out.
The OECD expects the seriously troubled eurozone
economy to contract further in 2013.
Growth in the US
is forecast at 2% next year down from a May estimate of 2.6 per cent – but only
if Obama can pull off a deal with the Republicans and prevent the country
falling over the “fiscal cliff”. Japan ’s economy is expected to
expand 0.8%, little more than half the growth expected in May.
And the UK ?
The OECD predicts an expansion of 0.9%. But as far as the budget deficit is
concerned - the subject of all the austerity, and the welfare-to work programme
in particular – the UK will
be performing worse than every other member except Japan .
So, in effect, the contractors – private sector and
charities alike – have really been contracted to manage the contraction. They
get state funding and the unemployed get state harassment and benefit cuts. More like welfare to profits than welfare to work.
Gerry Gold
Economics editor
