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Sunday 27 May 2012

Making the Work Programme work

Last week David Milband showed some real class when he presented the recommendations from his Commission on Youth Unemployment. This was a sober and intelligent review of the crisis and the government would do well to take note. He has welcomed the introduction of job subsidies under the new Youth Contract, which will come in from April, but is right to urge a boost in the number of these that will be made available to employers. His idea to set up Youth Employment Zones in hotspots of worklessness around the country is also a solid idea that should be lifted by ministers. One element that was not highlighted by the report was self-employment. It makes sense for the government to pay for emergency stop-gap jobs at a time of low growth, but for recovery to be sustainable new jobs with need to be created by start-up businesses. Unemployed graduates in particular should be encouraged to set up their own businesses: to my mind this is where any large-scale pump priming from state funds should take place. I would also like to see the Downing Street nudge unit delivering a huge poke in the ribs to the banks to persuade them to invest in graduate start-ups.

The Miliband report is just one of a number of recent interventions in this area. The National Audit Office warned that the government had been over-optimistic about the ability of the Work Programme to deliver. I am a glass-half-full man myself and I hope the new payment-by-results system delivers. But the warnings from the National Audit Office are sobering for those of us working to put young people back to work. The huge private corporations such as Serco, G4S and A4e given the job of delivering the Work Programme have been told they should not be tempted to maximise their profits by creaming off those easiest to get back to work, reducing the quality of the services for the unemployed or mistreating subcontractors. There are indications that this is all happening already so now is the time for Iain Duncan Smith and his team to be ultra-vigilant.

The Work and Pensions Secretary can not have been happy with the views of Public Accounts Committee chair Margaret Hodge on the welfare-to-work provider A4e. The provider was described as having an ‘abysmal’ record. It’s not often that welfare-to-work gets the Daily Mail treatment, but the paper turned its fire on A4e’s founder Emma Harrison after it was discovered she pocketed over £8 million last year, although one feels the paper is more furious at the alleged crime of living in a ‘posh commune’.

This story will not be going away any time soon. I hear advisers in Downing Street have become fixated on the problem of youth unemployment, as well they might. As one-in-five creeps towards one-in-four, it becomes increasingly difficult to pin the blame on school and college leavers themselves. The real problem is that the Work Programme was never designed to tackle youth unemployment (the belief was that most young people would largely find their own way back into the job market and as a result the payments for providers to get under-24s back to work are simply not attractive enough ).

Now the former head of Serco’s Welfare to Work programme, Richard Johnson, has launched an astonishing attack on the Work Programme in the Guardian claiming that contracts were awarded on the basis of price rather than quality and urging the DWP to come up with a Plan B in the event of the failure of the scheme.

The Work Programme was dreamt up in opposition and was designed for a buoyant jobs market. The time has come for ministers as the DWP to listen rather than preach and change course if necessary. This issue is too important for ideological point-scoring, as David Miliband has so admirably shown. 

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