openDemocracyUK

The Work Programme, people and economy: what's happening?

A four part series on the government's controversial welfare reforms.

Deborah Padfield
27 January 2015

1. Introducing the question

A basic rule of politics: always look below the headlines. That's certainly so with questions of poverty. Government trumpets growing employment levels and the successes of the Department for Work & Pension's JobCentre Plus and Work Programme in tackling unemployment. Numbers are shifting. But averages conceal disparities. Jobs may be growing in number, but the 'recovery' is not reversing the growth of insecurity and poverty. Look below the headlines at the Work Programme (the Programme), and there is strong evidence that it is creating further disparities of opportunity penalising those most in need, and helping to sustain a low-pay, low-prospect job market.

The 'hollowing-out' of the job market, with numbers of both high-skill/high-pay and low-skill/low-pay jobs growing at the expense of those in the middle, is structured into our economy. We are part of a global trend, but it is one freely permitted by government policy. It is not surprising that the Programme forms part of that policy. But it's a fact worth stating, as that's not the way the Programme is usually presented. Our attention is being misdirected - the classic trick of the illusionist.

The Work Programme, part of government's 'ambitious' welfare programme for the 'support' of long-term unemployed people, claims to deliver 'differentiated universalism' - that is, to enable people in different situations to have the same opportunities. In practice, 'the Work Programme at present may instead be reinforcing, exacerbating and making systemic the negative impacts of employment disadvantages.' So says the Third Sector Research Centre (TSRC). My exploration into papers by the Department for Work & Pensions (the Department), research centres and Parliamentary committees, plus the Work Programme Provider Guidance, suggests that both those who find work and those who 'fail' are, in different ways, negatively affected. Those already embedded in the Precariat become ever more precarious.

What's the context?

Is the recovery 'working' for everyone? According to the Chancellor, yes. 'On average, for every day the government has been in office, 1,000 new jobs have been created.' 85% of these are apparently full-time. The Office for National Statistics (ONS) also gives a positive view. Part-time and temporary worker-numbers have risen but numbers of those not wanting full-time or permanent work have also increased proportionally, while there are fewer wanting but unable to find it. The number of hidden unemployed—those in jobs but needing more or securer work—seems to have dwindled.

Other figures fill out the story. Self-employment is indeed rising. [ONS] Here lies a major story of insecurity, under-employment and low income. An August Guardian report tells us that 'Self-employed people have on average experienced a 22% fall in real pay since 2008-09, according to the ONS.' They have apparently been the hardest hit by the long pay squeeze, particularly given their lack of sick and holiday pay and pension rights. A new report by the National Policy Institute similarly highlights self-employed poverty. For many people, being registered as self-employed is the only way of getting a job - or rather, a succession of temporary jobs. At Citizens Advice, I meet a flow of clients who, having been directed by JobCentre Plus (JCPlus) or prospective employers to become self-employed, run into difficulties. Many lack saleable skills or necessary know-how, nor are they given relevant support. Attempts to claim in-work benefits from so fluctuating a basis produce a cycle of stoppages and overpayments. Poverty, debt and even loss of the home too often result.

What's the picture for employees? We live in an 'hour-glass' economy, middling jobs being squeezed out by the 'ongoing polarisation of the labour market into high-skilled, high-paid jobs on the one hand and low-paid, low-skilled jobs on the other.' The Joseph Rowntree Foundation (JRF) adds that while employers vary, 'there are many... that are able to successfully compete on the basis of low cost, with an operating model underpinned by low wages, little training and few progression opportunities, and high staff turnover...' Some employers do have active career progression policies.  But 'few employers offer training to those in elementary occupations.' [JRF]

A familiar group tends to do worst. 'Those working part-time, single parents, older workers and people with disabilities seem to find escaping from low pay especially difficult', reports the Resolution Foundation. Average figures always distract attention from those at the bottom. Those caught in the 'low-pay no-pay cycle' are a minority, but a significant one. 'One recent study estimates nearly 5% of the UK workforce was at risk of cycling between low paid work and unemployment... A further study estimates that 5% of the workforce – or 1.3 million people – were stuck in persistent low pay between 2002 and 2012.' [Joseph Rowntree Foundation].

Being in work is regularly equated with security and with improved mental health. The Chancellor's 2014 Autumn Statement trumpeted '1,000 new opportunities for people. New economic security for 1,000 families every single day.' The Royal College of Psychiatrists tells us that work can 'provide social contacts and support; give us a way structuring and occupying our time; keep us physically and mentally active; give us an opportunity to develop and use skills; give us social status; give us a sense of identity and personal achievement; provide the money and other resources needed for material well-being.' Little thought is needed to see the gap dividing those at the sharp end of the flexible labour market from either 'economic security' or these psychological benefits. People who cannot become part of a long-term working group with its structure and colleagueship, or progress in skills and seniority or rely on a secure income; who may probably be physically over- and mentally under-used. Being precariously employed has the negative benefit of avoiding the social stigma of unemployment, but little more.

A negative cycle threatens. If unemployment undermines physical and mental health, those with poor health are also more liable to become unemployed. JRF reports that '... those reporting poor health are significantly more likely to experience negative labour market transitions (such as becoming unemployed, failing to find work or moving into low paid work from a better paid job). This was especially the case where poor mental health was reported.' The greater the insecurity, the greater the vulnerability to further insecurity.

Below the employment and unemployment figures lie yet more people. Leaving earnings-replacement benefits (which I will generically call 'benefits') does not necessarily equate with finding work. More people than the Department anticipated leave the Work Programme without finding work. It's an area that concerns the Commons Work & Pensions Committee, particularly in relation to any role played by benefit sanctions. I certainly know of people who left benefits simply because they physically or mentally could not handle the demands. What do they live on? The social networks of friends and family. Debt. Food banks. Sometimes shoplifting. Begging. Only those who will not believe poverty is real can duck the evidence.

 

A few weeks ago I set out to understand more about the workings and impact of the Department for Work & Pension's Work Programme. As always, I found that the devil was in the detail. A brief account cannot show the significance of what is happening. So my article grew and will be presented in four parts, this being the first.

Part 2 will be a quick account of how the Programme works and the rationales behind it.

Part 3 will look at the perverse incentives built into the Programme's design and their implications for the people participating.

Part 4 will explore the meaning and potential costs of 'success' and 'failure' for participants and asks us all to think again about the nature of our economy and our mutual responsibilities.

                                                                                                                                                        

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