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The workfare scheme

From David Telford

Friday, 2 March 2012

The issue was raised on the 'charity shops' thread and rather than take that thread off message I thought I'd start a new subject.

Jack Hughes posted: "I would just like to say how pleased I am that Oxfam have recently decided to withdraw from the Government's odious workfare scheme. If, as a long-term 'jobless' person, I were to be forcibly pushed into an unpaid 'volunteering' job (see www.boycottworkfare.org for more details) I would personally prefer to work for a place that could be bothered to recycle its surplus cardboard, rather than send it to landfill."

My opinion and experience is somewhat different: "I'm not at all happy that another potential employer has felt forced out of the excellent workfare scheme. It's all very well saying it's unfair but how do you suggest we get young people into the workplace? An example for you is my nephew was forced to do 4 weeks work with Boots last Autumn. He finished his stint and a few days later he was invited to work up to Christmas. Boots, understandably didn't have a role for him after Christmas but this month they contacted him again and have now put him on a management training scheme on a full-time salary. He'd not have got a looking without that "unpaid" four weeks work experience. It's all very well to be against the plans but it's a bit rich if you are not the one who is desperate to get that chance."

And Allen Keep's contribution: "I simply can't let David Telford's latest outburst go unchallenged, his latest diatribe.. for the "excellent" workfare scheme." Happily it seems, few share his view as a storm of protest has already had the coalition backtracking and dropping the penalty for non- attendance.

But even before the protests gathered critical momentum it was too much for many employers such as Tesco (marxist/leninist) to stomach. Having to present an image of corporate responsibility while engaging with a scheme that forces the young unemployed to work for, er, precisely nothing ("every little helps?") wasn't good for business apparently.

Others have taken a more principled stand. It appears that many feel there is just something not quite right in making people do a day's work and then not paying them anything – an old fashioned view I accept.
Much better of course for enlightened companies like Boots to help the desperate out by allowing them to work for no wage at all – what else could we do with the unfortunate unemployed? Paying them would seem a little "over generous" in the current climate, no? These are austere times."

Allen, I'll not call your point of view a diatribe, it's your view and hey it's called a Discussion Forum when we discuss rather that insult opinions.

I'd have to say, it's really irrelevant how well Boots was doing under the previous director and if got rewarded for getting the business to make a profit of over a £Bn, I join you in saying a very well done. If every company in the UK were doing so well, we'd not be in difficult economic times.

I'll take you at face value Allen, let's all agree that anyone taken on for workfare is being exploited. What's the worst that can happen? A young person who'd been at home doing very little for the past year or so has to give up 4 weeks worth of working days going to a place of work. They are doing something for their benefits, getting out the house and getting a working routine. Taking a generous view, they are losing 4 weeks of daytime job search (which leaves them 8 hours still to jobsearch) but they are still getting an opportunity to impress. So if they are cast aside after the period yet the report goes back that they were excellent and had a great attitude, is that so bad?

What's the best that can happen? They go and work for 4 weeks, they enjoy it, they get a few skills that they didn't have before and they maybe fancy a job in a similar sphere and use the experience to their advantage.

I'm not sure if you work Allen or have had a senior position but if so, have you ever taken someone on where they produce an acceptable level of work within a few weeks? The first few weeks is finding their feet and even the most mundane tasks need a little new skillset. I take on work experience kids every year, I take hem on when I know it's quiet because I know they will take up my staff's time and they leave us having learnt a bit.
I think you are looking at it from a point of view that all employers are exploiting employees rather than a deal to give the kids a few new skills in exchange for a little help in the office.

If workfare is boycotted, I'm sure the next version of my nephew will be sure to thank you for keeping him on the dole and getting his championship manager level up higher.

From James Baker

Friday, 2 March 2012

I think there is a danger here of throwing the baby out with the bath water. There are some very positive efforts being made to encourage companies to come on board with proving work training. It needed some reforms that I believe the coalition is now making.

I also think there is a risk that the message being sent out by the anti workfare lobby is a dangerous one. The idea that it is 'slave labour' to contribute something to society panders to the idea that people should receive something for nothing. Society does not owe people a living.

My concern is not the shrill cry that this is 'slave labour' but rather that it distorts a free labour market. By subsiding free workers to large corporations and businesses, it distorts competition and the price of labour. Bureaucratic hurdles to accessing the scheme form an effective barrier to SMEs accessing the trainees.

I am also sceptical as to the value of training being offered by some of the large employers whose tenancies to specialise labour roles often results in particular menial work with little transferable skills.


From David Telford

Friday, 2 March 2012

James Baker you are absolutely right. Yes, the scheme could be abused but the only way of finding out is measuring feedback. The YTS schemes were abused by some but IIRC, most were very good and gave a springboard for a career.

As with most learning experiences, you get out what you are prepared to put in.

I too worry about it skewing the Labour market but I suspect few businesses will get a great deal of value from an workfare person in four weeks but they will get an insight into their attitudes and capabilities. Some businesses may well use it as an additional recruitment tool which would mean the scheme is achieving it's main aim.

From Allen Keep

Saturday, 3 March 2012

Here's a really simple question for either of you - why should people on a "workfare" (pause for a moment to appreciate the spectacular irony of the title) scheme not be paid for their work?

From David Telford

Saturday, 3 March 2012

Allen, in answer to your question - Because the prospective employer is unlikely to obtain any real value in return for providing 4 weeks of workfare.

Why would a company pay a wage for something where there is a real chance they sill get absolutely no value in return?

In most cases there is not a job available, it's a chance to provide the participant with a learning experience. It the company get's something positive out of it, that will be great and the employer may find there is an economic advantage in creating a role for that person, that's good isn't it.

I understand they will continue to receive their benefits whilst doing the workfare scheme. Why should the state continue to provide the safety net of benefits when the recipients aren't prepared to take opportunities that are laid on a plate.

I offer work experience to school kids, I get absolutely no value out of that. I don't increase my turnover, my sales guys are distracted from selling, my web team waste their time giving the work experience person little exercises and the task they complete takes more time in checking than had we just done them ourselves. My R&D people have a couple of hours taken out of their day in setting up exercises for the kids to do and I have a couple of days wasted in explaining P&L, balance sheets, product costing etc. Having been involved in work experience, one lad came back and worked with us over the summer doing little jobs (paid), he's hoping to go to university to study a subject that was undoubtedly inspired by his work experience with us. Is my company exploiting people? Should I be paying them?

From Dave M

Saturday, 3 March 2012

Mr Telford, all of that may be true of your firm but what about those on the scheme who are working in fast food outlets or supermarkets? Are you saying that they are giving no value to the employer in stacking shelves or clearing tables? And if they are giving value then do they not deserve to be paid a wage? Moreover, will companies who take on young people to do unskilled jobs not feel that they can hold back on recruiting paid workers if there is a steady supply of young unemployed who will work for free?

From Graham Barker

Saturday, 3 March 2012

There's nothing new about short unpaid work placements. I helped run a couple of placement schemes in the late 1970s and they weren't new then. But they were part of a college-based training scheme, so were viewed as learning rather than unpaid work. This I think is where the government has got it badly wrong; by creating a stick rather than carrot image, it has probably tainted the concept of work placement for years to come.

This is a shame because for the reasons David gives, most companies get no business benefit from these schemes. If they're going to be stigmatised for their trouble, they'll drop out and a valuable way of getting the young in particular into some kind of work habit will be lost.

As for the argument that people on work placement should be paid, this isn't straightforward. Yes, pay them more than basic JSA. But let's say you pay the statutory minimum wage. You'd then risk upsetting permanent employees who were themselves on minimum wage. They might resent working alongside people seen as not pulling their weight but getting paid the same. Believe me, it happens.

How could it all be improved? At the moment the emphasis is on big employers. A problem here is a growing tendency for the wealthiest businesses - like Google, Facebook and Amazon - to employ relatively few people. If this trend continues and governments continue to favour big companies, the problem of finding gainful employment for people will become much worse than it is now. Jobs won't just be lost in bad times; they won't be created in good times. Or not by big companies.

Better would be to give incentives to small firms to employ someone, even part time. There are plenty of sole traders and partnerships who don't employ anyone at all because they're put off by the liabilities that now come with being an employer. I don't know exact numbers, but say there are 100 very small businesses in Hebden Bridge. Enable each to offer part-time employment to just one person and that could be the equivalent of 30-50 full-time jobs created, many of them involving highly marketable skills.

Nationally at that rate, small businesses could make a much greater impact on unemployment and on the economy than all the Tescos and Burger Kings combined. With some imagination and effort it could be done, but unfortunately that rules out this government doing it.

From David Telford

Sunday, 4 March 2012

Dave M - I think it's all very well sneering at "working in fast food outlets or supermarkets" but I worked Part time at Tesco's during 'A' level time, I learnt a lot about consumer psychology, where to place the best sellers, loss leaders, mark up, margin, EOQ's moreover, I learnt what a Kumquat was, how to use fennel, that cox's apples rattled & were far nicer than there more attractive looking Red delicious.

If someone hasn't found work in 12 months, it's possible that they do need to widen their net, look at retail, look at catering options. We have a hell of a lot of people coming out of education with qualifications in what are essentially hobbies. We may see the quality of local amateur dramatics productions improve but it's not really going to make our BofP improve nor create fantastic employment opportunities.

As I said at the start, what's the worst that can happen? A young person feels they've wasted 4 weeks but nevertheless, at least they have had an experience and like anything, you get out of life what you put in.

From Jonathan Timbers

Sunday, 4 March 2012

Some sympathy with what you're saying, Graham! If Boots and Vodaphone and others paid their taxes properly, we could offer tax cuts to those sectors of the economy that employ people and reward SMEs which take people on, train them and pay a living wage. Sadly, we don't have that sort of capitalism - we, as you allude to, live under a form of corporatism where government works hand in hand with big business, at the expense of the rest of us.

A decent welfare system would offer career counselling and job coaching to teach job hunting skills to unemployed people - many of whom (though I know not all) have low self-esteem and sometimes physical and mental impairments and learning disabilities. I note that this government has cut 'Access to Work' help for employers to provide reasonable adjustments to enable employment opportunities.

From David Telford

Sunday, 4 March 2012

Mr Timbers, be careful how you word that. Vodafone & Boots and many others have completed their tax returns, paid their taxes and fulfilled requirements.

Ask any tax accountant their view on how things would have panned out if Vodafone had been challenged on their tax efficient set up. They have found legal ways to pay as little tax as possible, nobody likes paying tax.

From Jonathan Timbers

Monday, 5 March 2012

Mr Telford, I have. Try Richard Murphy and the Tax Justice Network

From David Telford

Monday, 5 March 2012

Richard Murphy is just a blogger and an ex accountant. He's not in practice and he's not really an economist either. In an ideal world, yes, we'd get everyone to pay a full corporation tax without any deductions but loopholes are there to encourage company behaviour and put in an incentive, companies will take advantage.

Governments have always chased taxes, they have won a few cases but they have lost a load. Vodafone have done absolutely nothing wrong, it was highly likely that HMRC would have lost and that would have legitimsed the loophole. either way, it doesn't make the workfare scheme a bad one.

From Dave M

Monday, 5 March 2012

Mr Telford - so what's the answer then? In your opinion, do people who have been placed in the sort of menial jobs I mentioned give any value, and if they do, do they deserve to be paid a wage? And if they are not paid then what is to stop companies relying on free labour rather than recruiting paid workers?

The fact that a person on the scheme may learn something is irrelevant. The question to be asked, according to you, when deciding whether it is right to pay them, is do they give value?

I would also take issue with you over another matter. In my view, a potential benefit of a work experience scheme is that it may engender a feeling of increased self worth in the participant. They may go home at the end of each day feeling that they have accomplished something worthwhile which may in turn impact on their ability to confidently seek out future employment. To that end I think that any decent employer would thank them for their help and leave them with a feeling that they had done well. So how do you think any of the 'school kids' you very kindly took on will feel if they read that their presence in your company caused your sales team to be distracted from selling, your web team wasted their time giving them exercises and that you and your R&D team also wasted your time with the lucky young people who gave 'absolutely no value'.

I hope that in the future, if you are kind enough to take on young people who will work for you for free, you will remember to thank them for their day's work and leave them with a good feeling about their achievements. After all, they won't be receiving any money.


From David Telford

Monday, 5 March 2012

The answer to your question is no, I don't think they should be paid. I see it as an exchange of work experience and training in exchange for a bit of free labour. Even in the most menial of jobs, I don't see the 'employer' gaining a great deal out of it. The 'employer' does not have to help anyone out, they are not a charity.

If someone is going to be paid, the company may as well take someone on full time as a fully trained enthusiastic guy is going to be far more productive that the lottery of a workfare scheme. What you don't seem to accept is the company are doing the 'employee' a favour as much as the other way round.

What is to stop companies relying on free labour rather than recruiting paid workers? At this stage nothing but as I say, even in menial jobs, I doubt that an employer would see a real advantage in doing that but it can happen. Rogue employers abusing the system will get weeded out in time but only experience will tell.

WRT school kids who have work experience at our office, you'll be surprised to know that we don't actually mind having them with us and from reports, they really enjoy the experience we give them. I'm simply making the if you think we're exploiting the little cherubs for free labour, you are very wrong.

Can I ask if you have any suggestions how to get long-term young unemployed back into the work habit?

From Ruth F

Monday, 5 March 2012

Perhaps it's worth saying that young people can get this kind of work experience at charity shops anyway, as volunteers, so Oxfam pulling out of the scheme makes little difference that way. Unlike bigger businesses - Boots and Tesco have been mentioned - Oxfam doesn't have a lot of paid jobs to offer to those who might complete work placements. But it is something to put on a CV, and a lot of people volunteer for a few weeks or months for just that reason.

From Maureen Brian

Monday, 5 March 2012

And is it not miraculous that Tesco, having been shouted at by "a small number of ill-informed, irrelevant Trots" - I paraphrase - has come up with the means and the nous to upgrade its work experience scheme, double its apprenticeship numbers and employ more and better trained staff on the shop floor?

One might even think that a small dose of Trotskyism is positively therapeutic.

From David Telford

Tuesday, 6 March 2012

I really don't think Tesco have managed to completely change and re-formulate their strategy to bring back the confidence from their investers haveing returned some disapointing results earlier in the year on the back of "a small number of ill-informed, irrelevant Trots" within a few days.

They have looked at the workfare scheme and heard the witterings of "a small number of ill-informed, irrelevant Trots" and thought, you know what, it aint worth the hassle. I'm sure those who miss out will thank "a small number of ill-informed, irrelevant Trots".

So no, a small dose of Trotskyism is certainly not positively therapeutic, it's just selfish idealism getting in the way of a practical solution.


From Dave M

Tuesday, 6 March 2012

I don't think it is appropriate to offer unpaid labour to companies for the very reason that it is open to abuse as Mr Telford admits. The exception would be in cases where companies can demonstrate that they are providing genuine training to the volunteer and that any benefit the company derives is offset by the actual cost of that training. Even then the scheme ought to be entirely voluntary without any Jobseeker's Allowance sanction attached to it at all.

I would, however, like to see a change in the rules relating to Jobseeker's Allowance making it easier for people to volunteer for not for profit organisations if they so wish. If a person can show that they are doing voluntary work I think that the requirement to be available for and actively seeking work should be suspended while the person is volunteering as should the requirement to sign-on. A postal or on-line declaration to the effect that no paid work was done in the relevant period should suffice in this case. Periodic checks can also be made with the organisation concerned to ensure that the volunteer is still with them.


From David Telford

Tuesday, 6 March 2012

If the scheme is exploited, what's the worst that can happen, an unemployed person gets some sense of worth back in work for a while and proving they can do something. There is bound to be a feedback process and as rogue's are identified, they'll be struck off the list.

The issue us what is exploitation? providing no help and throwing someone in the deep end would not be a good experience? Giving someone a little taining and different experiences would be good. I.e, MacDonalds, simply telling someone to put on an apron and getting them wiping tables for 4 weeks is perhaps exploitation. On the other had, giving someone half a day training and leaving them on chip frying one day, burger flipping another, salad bar another , front of house etc etc for 4 weeks is a vaired introduction to work and I'd say that's not explitation even if they are getting paid.

As long as steps are taken to limit exploitation, I see no problem in putting in some compulsion into the scheme and benefits are being paid during this time.

From Allen Keep

Tuesday, 6 March 2012

Here was Dave M's question for David

Mr Telford - so what's the answer then? In your opinion, do people who have been placed in the sort of menial jobs I mentioned give any value, and if they do, do they deserve to be paid a wage?

And here was Mr Telford's answer

The answer to your question is no, I don't think they should be paid. This is of course what we might expect from this source i.e it's perfectly reasonable, excellent even, to pay people precisely nothing for doing jobs that give value (which after all, according to Mr Cameron is what the scheme is all about – providing real,valuable work to people I remember him saying in parliament).

I wonder how long it takes to create value when you are a young person stacking shelves in Tesco or flipping burgers for McDonalds (world wide revenue $26000m PA). I wonder also how low paid workers perhaps seeking overtime or longer, more secure contracts working alongside a steady stream of unpaid labour every few weeks feel about their future career prospects?

How Mr Telford organises his work experience opportunities is perhaps revealing (if any more revealing where necessary) but also entirely irrelelvant – we are talking about the Government's schemes and more precisely, the work experience one (which places young people for up to 8 weeks by the way - not 4) which has been exposed (by Channel 4 amongst many others) as relying on coercion and sanction (although the coalition may have withdrwan the sanctions, not clear yet, which they previously claimed weren't there!).

This should not be confused with another scheme the "Mandatory" workscheme (also unpaid – for those who need "help" to understand working behaviour and which Mr Osborne claimed could be used for those who failed to attend work experience) which is ,of course, voluntary. Then there is the "work" scheme - which provides up to 6 months worth of unpaid "help" to get a job. That pleasure is now being earmarked for prisoners who having paid their due to society and released released,will now be forced ( no suggestion of voluntary here) into unpaid labour to "help" them not to re-offend.

It would be good to hear the experiences on this forum of people who have actually been part of a work fare scheme but in the meantime here is an account from a very brave young woman (not one of Mr. Telford's "guys") who I doubt very much is a Trotskyist and is certainly not wittering. This was one of the many accounts that helped start the furore around workfare. You can read it here.
I have heard a number of people wonder how any of this makes sense (and I don't just mean that it is all bewilderingly confusing) - not least as there is yet to be any firm evidence that the schemes are actually being more successful at creating jobs. One clue as to the real motive of the Government is the use of private profit making firms to broker placements such as the corrupt (and useless) A4e.

Guess what? Turns out there is a lot of value to be made out of the unemployed after all – but by whom? (No, not the taxpayers – the schemes will cost us £5bn) Companies like Ingeous (who have a contract covering our own West Yorkshire) will stand to make £770m if they meet their targets. Ingeous are 50% owned by a familiar name –Deloitte. As the Trotskyist Daily Mirror revealed earlier this year have donated £700,000 to the Tories and made a £28K donation to a certain Mr. Chris Grayling. For those of you who may not know he is the minister for the DWP.

Funny old world isn't it.

From Ian M

Wednesday, 7 March 2012

I have recently had experience of being unemployed over the last few months and would like to share with you a couple of examples from my time spent at the job center which demonstrate why the workfare scheme is a good idea.

A young man in his early twenties, when asked why he hadn't turned up to sign on replied that he lived half an hour away from the job center and that they should realise it was an effort for him to get there.

A young woman, using the job center phone to explain that she had no money to buy food as she had been kicked out of her house by her parents and was sleeping rough, turned to her boyfriend after putting the phone down and said "that's the beer and fags sorted"

Another seemingly fit and able young man explained that he was going to join the army but hadn't gone to the physical test because he forgot, stated that he hadn't rung the recruiting officer as he thought he would wait for them to ring him.

I could continue to list examples of how feckless some members of our society are and how being made to get up in the morning and actually turn up for work would do them some good but I would be here all night.
At least there are people like David in this world who actually generate wealth and put something into society rather than the bone idle who are happy just to take all the time.

From David Telford

Wednesday, 7 March 2012

Respnse to Allen Keep: Allen, how is it revealing how I provide work experience for some local schoolkids? Revealing what a great guy I am and how excellent I am at turning a business around whilst providing a valuable education to our future perhaps? If so, thanks but shucks, it's what I do.

I also don't understand the relevance of sticking figures to every business you mention, I assume you are congratulating them at maintaining profitability in these difficult economic times, if so, I concur.

I also do not see a major problem for the long-term unemployed doing something for the cost of their benefits (£11,000,000,000 per annum) as clearly their own efforts have not been successful. If a kick start gives them the impetus to find work, then if there is just one success, that has to be good, surely?

Your Guardian link to the story of the (Guardian patsy?) Poundland girl reveals what? A graduate who had been unsuccessful in finding work since graduating and clearly needs a helping hand or encouragement to get out there. OK, she wants to work in a museum but I want to be a footballer so sometimes, we need to admit that we may not be good enough / lucky enough to get exactly what we want. So she worked at Poundland and didn't like it. I tend to conclude that she only got what she was prepared to put in. Nevertheless, her 4 weeks at Poundland were up and what has it cost her? By going public with her gripe she comes over as a bit of a whiner but what has it cost her? Nothing, she still received benefits, she received travel expenses, is she worse off from where she was before? NO! Bring the story up to date, having been unemployed for so long, after her 4 weeks of Workfare which didn't enjoy, is this girl back on the scrapheap of life, exploited for 4 weeks and no better off? Allen, I'll let you give us the answer to that and perhaps it's irrelevant but perhaps the little kick in the right direction made her broaden her career horizons.

Of course, for every set up from the Guardian, there are other stories of workfare which tell a far different stories to those you have "heard a number of people", perhaps we don't mix in the same circles but nobody tells me the same tales. I'm aware of examples such as this.

You tell us that Workfare is costing the taxpayer £5bn, can you break that down a bit because seems surprising to me.