The labour market scam gets under way

As the first pilot schemes for getting claimants off Incapacity Benefit and into work have judged that 70% were fit for work, the real attitude of the Tories towards unemployment is becoming painfully clear.   Their Work First model of active labour market policy is defined by increasingly punitive approaches to conditionality and compulsion, the tightening of access to working-age benefits, and contracted-out services that prioritise fitting the workless into any job available.   All this in the context of rising unemploment and the lack of decent quality job opportunities throughout the depressed regions.   But the real scam is only now coming to light in the Government’s announcement of who it has awarded contracts to for forcing people back into work, any work, even while the Government is itself contracting the economy and shrinking the jobs base.

This is an exercise which won’t get many into work (there aren’t the jobs to go to), but it will certainly impoverish hundreds of thousands of claimants whilst at the same time conferring obscene wealth on the privatisers through whose hands they briefly pass.   Specifically:

  • 38 out of the 40 contracts awarded went to big private companies, not the voluntary sector or not-for-profit groups who were supposed to be leading the Big Society programme.   One of the private winners was A4E (Action for Employment), led by Emma Harrison, one of Cameron’s favourites, who the Observer revealed shares with her husband an income of £1.4m running her welfare-to-work outfit – £26,723 a week for the boss finding non-existent work, £35 a week for the IB claimant forced down on to JSA.
  • The contracts handed out were worth £3-5bn to the big private companies – A4E, Serco, Reed, etc. – yet their past record has been an unmitigatedly dismal failure.   Against 30-50% back-to-work targets they scored no better than 13-16%, such a gross under-achievement as in any real market would lead to a sacking (none of them were).
  • Even those whom they ‘successfully’ got back into work were soon out of work again – a quarter within 3 months.   Why not a standard that in the case of those who fell out of work in less than a year, the profit bounty would be halved or more?
  • For this monument to extravagantly wasteful work placement, the the profit before tax was 9%, despite the PAC finding that £94m was spent on alleged job support that didn’t actually deliver any additional jobs.
  • Jobcentre Plus was found to be more efficient and effective than the private providers, even though the latter cream off the easier claimants whereas more problematic groups like the mentally ill, ex-prisoners or addicts will be palmed off to the public or voluntary sectors.

But this is not a matter of comparative performance between public and private: it’s about ideology, privatising all public services to ‘any willing provider’, as Cameron has repeatedly acknowledged, whatever the cost, whatever the failures, whatever the misery for the victims.