by Don Paskini

In conversation with our star columnist Laurie Penny, James Purnell explained that when it came to welfare reform ”I think the question we need to ask is, ‘does it work?, isn’t it?”

One of the flagship measures of the welfare reform proposals, supported by the leadership of all three main parties, the media, numerous expert advisers and employment providers alike, is the use of the private and the voluntary sector to get what Purnell charmingly calls “the stock” back to work. During the debate on the Second Reading of the Welfare Reform Bill last week, only two MPs, Katy Clark and Dai Harvard, raised concerns about this. But, in the words of the Secretary of State, “does it work?”

By happy coincidence, the Financial Times answered this question last Friday:

“The latest figures show that where the independent sector has become involved with welfare-to-work programmes it is falling way short of delivering the promised jobs. What is more, the phenomenon was evident even before the recession started to bite.”



The FT goes on to report that Pathways to Work – a programme aimed at helping get 1m people off sickness benefits – is running 73 per cent short of its target, and that overall, the private sector-led employment programmes have delivered 60 per cent of the expected jobs in the six months to September, while consuming 98 per cent of the expected expenditure. The private companies which lobbied so hard for these contracts have lost a lot of money, and one of the biggest, Reed in Partnership, is planning restructuring that may lead to redundancies.

In other words, they have managed to design the scheme so badly that not only is it totally failing to meet its own targets, but the more money the government tries to give to private companies to help people get jobs, the more likely those companies are to get into financial trouble and have to sack their own workers.

I’m guessing that the “solution” to this in the short term will be higher levels of corporate welfare – private companies will be offered more money in the next round of contracts and required to do less in terms of helping people get jobs. Because the cross-party alliance behind these reforms would rather do that then admit that on any remotely reasonable examination of the evidence, regardless of ideological affiliation, they are wrong and the left-wing of the Labour Party and trade unions are right, and amend the welfare reform proposals accordingly.

Back before James Purnell slithered onto the scene, in December 2007, I wrote about the direction of the welfare reform agenda:

“But it is not entirely fanciful to suggest that in the future, there might not be more jobs than at present. With the state of the global economy, trouble in the public finances and so on, it might well be the case that there are fewer jobs available, and that many people won’t be able to get a job, no matter how hard they look for one.

So I asked one of the proponents of Welfare Reform what would happen in such a scenario. His answer was that the entire system is based on the assumption that the number of jobs will continue to rise indefinitely, and would have to be totally redesigned if this were no longer the case. (This is someone who supports the reforms).

There are parts of the country, and millions of people, who have still not recovered from the devastation of mass unemployment in the 1980s. If mass unemployment returns to Britain, then people will have to cope with benefits which are lower than under Thatcher, and be required by a system which is not fit for purpose to spend their time searching for jobs which do not exist. Those that don’t comply will have their benefits cut or stopped entirely. Meanwhile, more of the resources available will be spent on advisers monitoring that people are searching for the jobs which don’t exist, and punishing them if they fail to do so.

There are many different ways of addressing this risk and trying to deal with it, but what bothers me is that it isn’t even being considered. So the point when support from the welfare state is most needed is exactly the same as the point when the new system becomes not fit for purpose.”