WIREDGOV

Blog posted by: Sarah Lyall, (October 1, 2013 )

New compulsory work schemes introduced by Chancellor George Osborne will be ineffective from the start. The history of workfare tells us that.

‘Getting people to do something in return for their benefits’ – as announced by Osborne at the Conservative conference – is not a Tory innovation, but an idea that has been used internationally in various welfare regimes and subject to plentiful academic analysis and evaluation. This excellent blog from Jonathan Portes at NIESR reveals how the DWP’s own analysis (which Portes peer reviewed) shows that mandatory work activity is largely ineffective – and yet, the Government continues to extend the programme.

In the government's new £300m plan, 200,000 long-term benefit claimants will do compulsory community service in return for Job Seeker's Allowance. This in effect means working for £2 an hour. Attendance will be mandatory and failure to participate ‘without good reason’ (a catch-all term, as this blog shows) will lead to benefit sanctions.

Workfare has been defined neutrally by Lodemer and Trickey as ‘schemes which require people to work in return for social assistance’. The approach attracted politicians’ interest in the early 1990s in response to a growing concern about the quality of recruits into the labour market, particularly their levels of motivation and skills. Unemployment was redefined during this period as a matter of supply rather than demand: the problem was with people’s employability rather than an employment shortage.

In some countries, in certain economic phases this may have been true. Denmark introduced workfare in 1994 and is seen as a pioneer. Workfare in Denmark involved compulsory work experience and emphasised improving the skills of Danish citizens to help them meet the requirements of job vacancies. The unemployment rate in Denmark declined and remained stable around 5 per cent from 1997.

Similar schemes were tried in the Netherlands, France and Germany, with mixed results. In Germany, for example, social assistance recipients could be legally obliged to take on work ‘in the general public interest’. This was subsequently dubbed ‘One-Euro-Jobs’ because it gave workers additional compensation of one or two Euros per hour. But these jobs did not create proper employment relationships, nor improve participants’ connection to the labour force, and the programme failed to reduce unemployment.

Britain’s history of workfare stretches back beyond the Victorian era, when workhouses were used to get people to ‘do something’ in return for support. The 1834 New Poor Law created a national, centrally enforced system of workfare centring on the workhouses where inmates did sewing, cleaning, weaving and other local trades in return for poor relief. Many workhouses lasted until abolished by the 1948 National Health Service Act, championed by Beveridge.

The workhouse system has similarities with current workfare programmes deployed by the British Government. Both assume that people without work are essentially to blame for this fact and that unpleasant mandatory work will motivate them to try harder to get a job.

Yet our research shows how far this is from the truth. People we have interviewed recently are taking great pains to find a job. They undergo copious training courses and NVQs to try to become more employable; when they end up either with nothing or caught in ‘low-pay-no-pay’ cycles, in and out of dead-end jobs,  they become demoralised. The few who are disengaged from job-searching have been worn down by pressures imposed by the Job Centre and by the assumption that they are gaming the system.

Successful workfare schemes have particular hallmarks: they are designed to improve skills rather than control and punish; they emphasise training opportunities instead of sanctions; and, interestingly, they are inclusive in design rather than targeting only the long-term unemployed. Conversely, workfare tends to fail when it focuses on the perceived defects of individuals and gives them compulsory work without tackling the reluctance of employers to employ, or actual job shortages.

It cannot reduce the unemployment rate if there are no jobs to move into. And where it offers a range of placements (different kinds of compulsory community service and work experience), people who already have higher skills tend to get the best placements with most opportunity for longer-term work, so that it fails to help those who are most disconnected from work.

As Jonathan Portes says, the real hope for the programme ‘is not so much that participants will be encouraged to get a "real" job, but that they will find the experience of mandatory work so unpleasant (and/or incompatible with other activities they'd rather be doing) that they will sign off benefits one way or the other.’

With this hard-wired into the design it is unsurprising that:

• On average, someone referred to mandatory work activity spent just four days less on benefit as a result.
• The maximum impact on benefit receipt was a five percentage point reduction in benefit receipt, and even this impact had disappeared completely after 13 weeks.
• Furthermore, 13 weeks after referral, those referred were three percentage points more likely to be on Employment and Support Allowance (ESA).

What appears to have happened, according to Portes, ‘is that while some of those referred did leave benefits as result, they drifted back on quickly…Not to put too fine a point on it, this is a complete policy disaster. ESA claimants are both more expensive and more difficult to get off benefit than JSA claimants.’

The Government’s current approach is much more about playing to the punitive political gallery than improving skills, training or opportunity. Workfare is certainly not an innovation. And if the aim is to reshape the labour market, it makes a thoroughly blunt instrument for an extremely complex task.