We recognise that welfare reforms are needed With child poverty growing, and gap between rich and poor increasing, need to deploy society’s resources to improve people’s lives. The principal that should be implementing is solidarity. This would make the best of the public service ethos – helping those who need support because they cannot (or should not) work, and assisting those who want it to get into work. But how can public servants maintain their morale when 40% of DWP staff face a complete pay freeze this year –0% increase when RPI is running at 4.3%? Instead of solidarity we get the Market. Clients –whether it is single parents (mostly mothers), or those on incapacity benefit, apparently need to be forced out into the labour market. And who better to do this than a group of largely private sector contractors who are paid by results, and compete for contracts? The key elements of the current reform plans are to get more long-term benefit claimants into work by: o pushing Incapacity Benefit claimants onto JSA o removing entitlement to income support from 350,000 lone parents o shifting much of the work from Jobcentre plus to a network of contractors in the private and “third” sectors But we already have a very high rate of economic activity – in Europe only the Netherlands, Denmark and Sweden had higher participation rates than UK. And the activity rate of single parents has risen rapidly, too, from 45.3% in 1997, to 56.6% in 2006 nearly all of this achieved by voluntary means. Members are clear that this is what works best. Parents want to work when they can. These results were mostly delivered by public servants in DWP. And the Secretary of State James Purnell claimed in April this year “we have achieved a ten per cent productivity increase”. So why the need for these new initiatives? To begin with, policy is actually being driven by the budget. The DWP’s budget is scheduled to fall from £8.1 billion in 2008/9 to £7.6 in 2010/11 – even though we know that most forecasters predict a rise in unemployment, and an increase in the number of pensioners. The budget cuts mean fewer staff: o After 30,000 job cuts across DWP, a further 12,000 are planned over the next 3 years, up to 8,000 in JCP, and 3,000 in Pensions, Disability and Carers Service. o Add to this the programme of Jobcentre closures and you can see that the resources are not there to provide new programmes – even if they were good ones. In this context, it is highly amusing to see James Purnell arguing that job seekers should have choice. There’s fewer Jobcentres, thanks to the closures, and thanks to the efficiency programme, visitors are not welcome anyway – staff have to tell them to go away and ring the call centre. And when it comes to office closures, who is consulted and listened to? Many are going in areas of high unemployment. Apparently Leigh Lewis wasn’t sure when he was asked by W&P Select Committee if clients themselves were even asked. So much for power to the people (as Purnell said yesterday) But shifting delivery from civil servants to contractors is claimed as the solution. But the evidence is thin. Steve Davies (who will speak later) looked at this for us, and found that if anything, the evidence showed that JCP performed better than private contractors– even without the same degree of flexibility. A serious approach to reducing poverty would also recognise that some employers are the source of society’s problems, not their solution. They won’t employ the disabled, or black and ethnic minority applicants. They pay so little that even in work millions remain poor. Improved workers’ rights would improve the lot of many. As would improved trade union rights – we know that union presence reduces inequality and discrimination. Simply forcing those on IB into the labour market will not get them jobs, it will simply cut their income. It is not simply a matter of determining what someone ought to be able to do – it is whether an employer is likely to discriminate against those who have had poor health. And we know they do. And if you want the evidence, look no further than the DWP itself. Between April 200 and Dec 2007, staff numbers dropped by 13.3%. But there was a 15.5% drop in the number of staff with disabilities. DWP sacked over 1,000 staff last year because of their sickness records. Putting contracts out does nothing to resolve these problems. In fact it generates a whole lot more. What happens when it al goes wrong? Look at Fujitsu pulling out of NHS computerisation project - as well as threatening jobs of hundreds of staff, it leaves project in tatters. And this could happen in the new programmes in DWP. JCP contractor A4E recently pulled out of Offenders’ Learning and Skills Services (OLASS) in Kent because it stood to make a loss. So much for contractors needing to be rewarded for carrying risk. According to colleagues in UCU, members were glad to see the back of them And then another JCP contractor, Carter & Carter, went bust. No Jobcentre ever declared itself bankrupt. Of course the contracting model described by ministers often cites the third sector. But even David Freud - author of the plan to contract out conceded that would be big multinational companies who would be prime contractors but maybe the smaller companies and charities could be part of consortia bidding for the second tier. And we saw from the last set of Pathways to Work contracts how big business took the overwhelming majority of them – again with little evidence that they would do better. Third sector is increasingly being sucked into contracting. This has dangerous consequences. Quite apart from damaging their role as advocates, they can end up replicating the worst behaviour of the private sector. On 24th April, Shelter workers joined public sector colleagues on strike. Why? Because pay & conditions were under attack in order to make the charity more competitive when it came to wining contracts.
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