Those targeted by new Workfare scheme make up just 2% of benefits bill

Those targeted by a new workfare scheme to be announced by chancellor George Osborne today make up just 5 per cent of JSA claims and 2.5 per cent of the benefits bill.

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Those targeted by a new workfare scheme to be announced by chancellor George Osborne today make up just 5 per cent of JSA claims and 2.5 per cent of the total benefits bill, according to figures from the Department for Work and Pensions (DWP).

Osborne is set to announce at Conservative Party conference in Manchester shortly that 200,000 benefit claimants who have been out of work for two years will be placed on a new Help to Work scheme, where they will be made to either work 30 hours a week for six months doing community work, attend the jobcentre on a daily basis to look for work, or undertake a mandatory regime for dealing with the issues causing their unemployment, such as mental health problems or drug addiction.

According to today’s Independent, these will be the “most stringent conditions ever on the long-term unemployed”.

The politics of the announcement are clear. Caps on the amount of money claimants can receive and sanctions on those receiving out of work benefits are a vote winner. A recent YouGov poll found that 79 per cent of people, including 71 per cent of Labour voters, support the government’s £26,000 benefit cap; and a survey last year found that 36 per thought it should be less than £20,000 a year.

The evidence that Workfare-style policies make good policy, however, is less clear.

Aside from the fact that, as mentioned, the 200,000 long-term claimants of unemployment benefit targeted by Osborne make up just 5 per cent of JSA claims and only 2.5 per cent of the overall benefits bill, the UK also spends less on unemployment benefit as a share of national income than every other major European country except Norway.

Long-term unemployment is clearly an undesirable thing to have, but contrasted with some of the other problems facing the UK – such as the fact that prices have risen faster than wages in all but one month of David Cameron’s premiership – it’s a bizarre headline announcement for your chancellor’s keynote speech.

As it stands, the government’s current Workfare scheme which was introduced in 2011 applies to those who have been out of work for more than a year. The new Help to Work programme will apply to those out of work for more than two years.

Despite being one of Work and Pensions secretary Iain Duncan Smith’s flagship policies, the 2011 scheme has not been particularly successful at getting people back to work, and is currently delivering outcomes close to the performance of the programme it replaced. For those who have moved onto the programme from Employment and Support Allowance, just 4 per cent have found employment.

In this respect, today’s announcement may be seen as a response to the failure of current Workfare policies.

There is no reason to think, however, that the criticisms levelled at workfare won’t also apply to the new scheme. Is, for example, a person spending 30 hours a week picking up litter more or less likely to find a paying job? Research which looked at similar schemes in the US, Canada and Australia found that:

“There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers. Subsidised (‘transitional’) job schemes that pay a wage can be more effective in raising employment levels than ‘work for benefit’ programmes. Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high.”

As shadow chief secretary to the treasury Rachel Reeves put it, “The experience so far has been they cost quite a bit of money and don’t deliver that much in the way of results.”

The new scheme will cost £300 million a year. As yet, there is very little evidence to suggest it will deliver a return on that investment.

This graphic from IPPR shows the stark difference between public perception and reality when it comes to benefits.

28 Responses to “Those targeted by new Workfare scheme make up just 2% of benefits bill”

  1. Nick

    The animated pie chart graphic is actually from the IPPR, the Institute for Public Policy Research thinktank, not the IPP, whatever that might be.

  2. swatnan

    Thats not really the point. They may be a small %age minority of scroungers, who have decided work is not for them and so let others keep them in the comfort they are accustomed to, but you have to consider the overall impact this small minority have on society. Its the same with the small minority of ASBO offenders, or small minority of problem families, or small amnumber of addicts or drunks, or the small number of islamofacists to take an extreme example. Something has to be done and seemn to be done. Otherwise those decent folk who struggle are going to give up all hope, that others get away wit it with they are unfairly hit.
    This is the fact that Labour has to address.

  3. Levinas

    ‘ undertake a mandatory regime for dealing with the issues causing their unemployment, such as mental health problems or drug addiction.’, if this includes mandating drugs, wouldn’t such a move violate individuals human rights ? Unless they intend on sectioning every claimant with such problems. Not even sure a non drug mandated therapy would be lawful.

  4. Levinas

    ‘ undertake a mandatory regime for dealing with the issues causing their unemployment, such as mental health problems or drug addiction.’, if this includes mandating drugs, wouldn’t such a move violate individuals human rights ? Unless they intend on sectioning every claimant with such problems. Not even sure a non drug mandated therapy would be lawful.

  5. leftfootfwd

    Typo.

  6. LB

    What human rights?

    Simple choice. If you want money from others then you have to comply with the strings.

    If you want something else you are free to choose.

    No rights issues

  7. LB

    Correct. If you don’t then all claimants get tarred with the behaviour of the bad.

    E,g labours insistance that we have to fund spare bedrooms for those on benefits is bonkers.

    Labour’s 104,000 a year payments to people for housing benefits.

    Until labour makes its mind up, is it for the scrounges or for the workers it’s screwed. And In Particular it needs to be honest about not paying pensions because it can’t

  8. Ralph Musgrave

    “Subsidised (‘transitional’) job schemes that pay a wage can be more effective in raising employment levels than ‘work for benefit’ programmes..” Excuse me? What’s the difference between “subsidised transitional job schemes” and workfare? They are both a form of temporary subsidised employment!!!

    As to the idea that subsidised temporary work / workfare does not improve employment chances, there is evidence of such a benefit (particularly in the case of subsidised temporary work in the private sector) from the two Swiss studies. See the works by Gerfin and Steiger which I cite on this blog post of mine:

    http://ralphanomics.blogspot.co.uk/2012/01/effect-of-temporary-subsidised.html

    As to “failing to provide the skills and experience valued by employers” my answer to that is that workfare is no worse in that respect than unemployment. So that’s not an argument against workfare. Moreover, the evidence is that the sort of training normally offered alongside or as an alternative to workfare schemes is useless.

    And if you want a really advanced consideration of this subject (100 miles above everyone’s head unfortunately) see this paper of mine:
    http://mpra.ub.uni-muenchen.de/19094/

  9. GO

    “Those targeted by new Workfare scheme make up just 2% of benefits bill”

    “the 200,000 long-term claimants of unemployment benefit targeted by Osborne make up just 5 per cent of JSA claims and only 2.5 per cent of the overall benefits bill”

    Sorry, but I think you’ve misread the figures.

    JSA accounts for 2.5% of the benefits bill in total (see the bottom pie chart on p. 21 of the IPPR report you link to). The amount spent on the claimants targeted by this new scheme – those out of work for three years or more – is 5% *of that 2.5%*.

    So those targeted by this scheme don’t make up anything close to 2%, or 2.5%, of the overall benefits bill. They make up 5% of 2.5% = 0.125%.

  10. stuart

    2 years is too long to be on benefits, give something back , the streets are filthy the grass. Verges need cutting , park benches need painting .
    Most just get into the non working groove up at 10 am daytime tv , feed fat face, afternoon tv , beer from tesco annoy neighbours playing music loud until early hours , have another kid claim more benefit , smelly dirty no self respect.

  11. Levinas

    Money from others?! What about the money paid in NI and taxes whilst employed, prior to illness, that was supposed to be the insurance to cover for eventualities such as these.Sorry LB but you can fuck right off.My grandparents paid into the scheme, my parents paid into the scheme and I’ve paid into the scheme-Now its time to pay out they want to change the rules.
    Yes rights, I got them, you got them, we all got them.Cuntservatives want to change those rules too now.No way.Human rights are there to protect us and protect us they will, in this case from coerced treatment plans designed to force claimants off of benefits to reduce the benefit bill-So Cuntservatives can splash out on another tax cut for the rich.
    Read my lips-NO FUCKING WAY!

  12. LB

    Read my lips. That is the plan of politicians.

    Let me also point out the loss. Is the loss the lack of a pension? That costs 152k.

    Nope the real loss is what you could have got putting your NI into the ftse. That for a 26k year worker would have given 627k with 1% charges. Even taking account of the 10% insurance payouts, it is an even larger loss.

    However back to the reality, rather than the history.

    The total pensions liabilities is 6.5 trillion, rising at 734 bn a year.

    Taxes raise 600 bn a year, and they are spending 722 bn a year.

    Doesn’t add up. They won’t pay. So fuck off or not fuck off, none of the parties can pay. That would need tax rate of over 95% with all the money going to pensioners. Oh and no healthcare as well. It ain’t going to work.

    So politicians will fuck pensioners, after fucking after screwing everyone else,

    So remember when you try and blame the messenger, you are just letting the crooks off the hook

  13. Christos Palmer

    Problem with the tories, if your not a public educated rich retard,
    you are no more than worthy of any respect whatsoever. Welcome to Cameron’s
    Fifth Reich.

  14. Christos Palmer

    Problem with the tories, if your not a public educated rich retard,
    you are no more than worthy of any respect whatsoever. Welcome to Cameron’s
    Fifth Reich.

  15. Christos Palmer

    Problem with the tories, if your not a public educated rich retard,
    you are no more than worthy of any respect whatsoever. Welcome to Cameron’s
    Fifth Reich.

  16. Guest

    Tory simpleton. Why do the likes of you still persist? Money from others?

  17. treborc1

    Tory Home has a very good Forum have you not tried it.

  18. treborc1

    Yep New labour obviously the Fourth because Byrne was talking about people working for benefits, but then Miliband decided it may be a vote Loser.

  19. swatnan

    @treborc1: I guess its you’re natural resting ground, but not for me.

  20. LB

    It is very simple. The Tories and labour have spent all the money, there is no real fund to pay pensions, IOUs to yourself are not assets.

    The simple fact is that pensions debts are going up at 734 bn a year. ONS numbers. Total tax is 600, and spending 722 bn.

    Which bit of both labour and Tories being fraudsters do you not understand?

  21. jeremy beadle

    Your all fucking idiots you all miss that these people are doing work and not getting paid for it on a decent wage, why don’t you go to fucking work for 70quid a week cunts, the new Hitler is rising in London but you can not see

  22. Barry Scarfe

    You forgot to add that New Labour started the destruction of the welfare state with Blair’s plainly unworkable nonsense of the so-called New Deal. Instead of defending the welfare state, the people’s party put us on this road.

  23. Barry Scarfe

    Grow-up. There was a time (admittedly in the distant past) when the Tories at least ASPIRED to govern for the whole nation. Now, it should be crystal clear they don’t give a damm about anyone apart from the uber-rich and especially those who are out of work through not fault of their own. Cameron is a truely repellent individual and so is Osbourne and IDS and that is coming from someone who voted Tory in 1992 but who won’t now.

  24. Barry Scarfe

    Why should law-abiding citizens have to undertake harsher community sentences than a criminal would be given by the courts? Oh, I forgot unemployment is a crime, isn’t it?

  25. LB

    There you go. You’ve illustrated the problem. You’re the one who’s become completely tribal.

    Back to the points I’ve made.

    Labour was paying 104,000 a year in housing benefits. for people to live in Knightsbridge. That is completely bonkers. What’s your defence for that policy?

    Similarly, on the pensions. That’s the major disaster. Here I do agree. Osbourne and Cameron are equally guilty. They, like Labour have pissed the contributions away. ONS put that debt at 6,500 bn. That’s on top of the borrowing, the PFI, the guarantees, the nuclear clean up, …

    Can’t be paid, won’t be paid. Here I agree again. It fucks the poor. Completely.

  26. LB

    You’re numbers are wrong.

    http://www.theguardian.com/society/2013/nov/06/sanctions-benefits-claimants

    The number of benefit claims subject to sanctions in the year to June 2013 was 860,000 – the highest since statistics in their present form began to be published, Department of Work and Pensions figures show.

    The figure compares with 500,000 in the year to 30 April 2010, the last month of the previous Labour government.

    The figures – which have been delayed for months – also show that since a new tougher benefit regime was introduced last October, benefit payments have been suspended from unemployed people 580,000 times due either to a failure to look for work, turning down a job offer or missing jobcentre appointments.

    =========

    Numbers up. Still nothing new, Labour targeted 500K.

    However look at the percentage to whom sanctions was applied. A huge percentage of the numbers.

    That’s the problem.

    People capable of working, claiming money at the cost of lots of other people.

    The jobs are there. Look at the number of migrants.

  27. stuart

    I did not suggest that they should, convicted criminal should do much harsher tasks.
    Nothing wrong with being inemployed so long as the revipient of the benefits is actively seeking work i was more targeting those who are work shy and they are many.

  28. chris cobb

    I am on 4 weeks mandatory work exp.
    I go to SITA, Mannings Heath road, Poole.
    Every day i sit in a cold room reading a book and listening 2 the radio, after i`ve been there 7 hours, i go home.
    At most, i do about 40 mins the whole day, sorting through rubbish. How can this be work experience?
    6 people were supposed 2 start on the same day as me but I`m the only guy who turned up!
    Still, it makes money 4 PINNACLE who arranged it eh! another shocking waste of tax payers money!

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