Tag Archives: welfare reform

Screwing the unemployed in the North of Ireland

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Belfast Plebian

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One development in the North of Ireland that has come into existence largely unmentioned is Stormont’s new welfare to work programme. There have been quite a few of these in the past, New Deal, Steps to Work, but this one is more than just a hand me down modification, it fits with the now.

It emerged from out of the thinkery of the Department of Employment and Learning (DEL) as recently as 2012. The protocols were first aired in a draft published in April 2012 (feasibility study; DEL web site). Tenders were then put out to the private sector for attention at the beginning of 2013 and the Stormont Executive approved the full regulations in June 1914. Implementation of the programme started in October 2014 and it is still being rolled out. The Alliance party man in the Executive, Minister Farry declared that this was ‘a major change in the way we help people, focusing on providing more flexible support for individual’s needs and their barriers to work.’

It is certainly a major change all right; it is the semi- privatisation of Stormont’s unemployment responsibility. The job of getting the north’s unemployed reserve army into work has just been handed over to three ‘lead contractors’ i.e. to profit seeking private companies.

  • Belfast –Ingeus UK Ltd, supported by Armstrong Learning NI, People 1st, Springvale Learning, SES Consortium and Addiction NI.
  • Northern Region – EOS (Trading) Northern Ireland Ltd, supported by Elle Enterprises, Customised Training Services, Network Personnel, Ulster Supported Employment Limited, North City Business, Roe Valley Enterprise Ltd and Roe Valley Community Education Forum.
  • Southern Region –Reed in Partnership, supported by Global Education Ltd, Network Personnel, Rutledge Recruitment and Training and South Eastern Regional College.

From now on the private sector will be gifted an opportunity to make a profit out of the unemployed with contracts worth £35 million. The only objection raised by those MLA’s who were there for the Committee stage was that DEL had unkindly overlooked some locally run training organisations in favour of the bigger outsider businesses -Pat Ramsey of the SDLP worried that 400 jobs could be lost to local training organisations in the transition period.

Ingenus, for example is a welfare to work international business founded in 1989 by the wife of the former Australian Prime Minister Kevin Rudd.  Therese Rein sold the business to Providence Service Corporation of Arizona in April 2014 in a deal said to be worth £65 million in cash and another £25 million in stock options, and she agreed to stay on as the Chief Executive.

Although present in several countries, Ingenus makes seventy percent of its declared profit from the British Government’s welfare to work contracts. The Australian government has been pretty ruthless in the slashing of the social entitlements of workers and this gradgrind model is being imposed in Britain via companies like Ingenus.

Another lead contractor is Reed Partnership a division of the Reed Group that includes Reed Specialist Recruitment and Reed Online. The Reed Partnership boasts on its web site that it was the first welfare to work contractor to be trusted by New Labour to deliver the service under the New Deal Programme – “We launched as one of the first private welfare to work providers in the UK. Our first contract started in Hackney in 1998.”

News journalists in Britain frequently claim that the welfare to work programme has been an unmitigated disaster, on the basis that it has been shown to be not good value for the taxpayer’s money lavished on it.  It has been reported that less than 5 percent of those forced under its iron wheels find any permanent work. These sorts of ‘I feel sorry for the taxpayer’ type of political analyses has become the norm for almost all news media criticism of government policy.

When asked about the work programmes’ lamentable failure reported by the news media in England, the DEL civil servants simply told the Assembly Committee that civil servants were under no legislative obligation to take the poor results into consideration when inventing their own scheme specially tailored for the North of Ireland. The DEL officials told the Assembly Committee they were aiming at a better programme and at a higher achieving rate of 29%. Success is defined as finding a job for anyone on the programme for at least three or six months.

The ‘getting good value for taxpayers money’ model of social criticism is an absolutely hopeless one in dealing with the private welfare to work model as it is to be applied in the North of Ireland. The only model of political analysis useful here is the one that relates important government policy decisions directly to the aims of the Good Friday Agreement and fulfilling the mandate of the peace process.

The managerial side of the Stormont regime is certainly not dedicated to ‘helping’ the unemployed section of the working class into some new era of private sector prosperity – that much is obvious.  Rather it is preparing and training them for a future based on low expectations, frequent changes to part time working and acceptance of a long life on the minimum wage.

One of the most significant new protocols attached to the steps to success programme is that the new providers are not obligated by their DEL contract to offer training and education to their unemployed clients. All of the previous work programmes at least contained such a proviso, stipulating some skills training.  This new iteration does not.  It was no doubt thought to be an added expense that the private contractors could well do without.

There is no expectation that the jobs the private sector currently has on offer will be anything but part time, temporary, low skilled and low waged. The fact that the private contractors will receive a payment from the Department on the basis of any three or six months job take-up speaks volumes.

It should be said that participation on the new work programme is mandatory. Even the 60 to 65 age group are forced to take part, something that did not previously apply.

There are to be five client groups – Jobseekers 18-24, Jobseekers early entry, ESA’s (employment support allowance) voluntary ESA’s and Returners. The ‘client’s’ routine is to change from visiting the job centre once a fortnight, to show sufficient evidence of really seeking work, to carrying on with this plus an added second routine of meeting with the ‘provider’ at least three or four times per week for sessions lasting either one or two hours – supervised job searching to really really show they are seeking work.

The larger client group must do a minimum of five hours supervised searching spread out over the week.  This routine includes cold calling of employers who may not have even adverted any vacancies. This is obviously an enhanced surveilling of the lives of the unemployed. The ‘clients’ even have to hand over their mobile phone details and email addresses for random contacts about job offers. They also have to sign wavers allowing the providers to retain and make use of their personal details.

You are asked to inform them of any health problems you may have and to let them know if you are a ‘substance abuser.’  Some of the client groups have to agree to do work placements without pay. The client can in theory claim travelling expenses if they are especially diligent.  I had to delve deep into the DEL protocols documents to discover this.

Claims for travel expenses will be submitted at participant level and can be claimed on a four weekly basis. The Department will make payments within 30 working days of receipt provided receipts are offered.’ The least expensive way to travel in Belfast is to buy a bus day ticket costing £3.40 or £3.90. So the typical travel expense for participants is likely to be between 10 and 15 pounds per week. A single person under 25 on JSA receives £57.35 and the over 25 person gets £72.40. Obviously one training tip you are going to get on this programme is a vital lesson on keeping receipts.

Any unemployed person who is deemed not to be ‘performing’ to the protocols will be sanctioned with a withholding of benefit. The rules state that:

‘Your benefits will be stopped for two weeks for the first time you

  1. Give up, or fail to attend the required S2S attendance without good reason or are asked to leave for non-compliant behaviour.
  2. Your benefits will be stopped for four weeks for a second breach of the rules.
  3. It will be stopped for 26 weeks if the client breaks the rules for a third time.’

There is as yet no evidence available for current sanction rates in the North of Ireland. The rates of sanction penalisation in GB are amazingly high.  On 12 February, DWP published an important Freedom of Information response 2014-4972 showing the proportion of JSA claimants sanctioned and the numbers of repeat JSA sanctions.

Almost one-fifth (18.4%) of the 3,097,630 individuals who claimed JSA during 2013/14 were sanctioned: 568,430 people.  During 2013/14 the maximum number of JSA claimants at any one time was 1,474,428. This gives some idea of the amount of turnover in the claimant count.

We know from Stat-Xplore that there were 888,936 JSA sanctions in 2013/14, so that the average number of sanctions imposed on sanctioned claimants in 2013/14 was 1.56. It should be remembered that these figures show the proportion of claimants sanctioned after reviews/reconsiderations and appeals. The proportion sanctioned before these challenges in 2013/14 must have been about 20%.

Incredibly the Work Programme continues to deliver far more JSA sanctions than successful JSA job outcomes. The official statistics show that up to 30 September 2014 there had been 345,640 JSA Work Programme job outcomes and 575,399 JSA Work Programme sanctions.

This new policing regime for the unemployed is already in situ while the controversial welfare reform changes that have provoked so much comment are yet to be rolled out. One intention of the welfare reform plan in waiting is to push as many of the more costly benefit claimants into the cheaper Steps to Success programme.  This anticipated change is the reason why the bigger private sector welfare to work contractors from Britain are anticipating an increasing client base. The other is to harry as many people off the benefits system as is possible within the law.

The early signs are that it is working – the last three months have seen the biggest fall in live jobseeking claims ever recorded, 1,700 per month. Many are drifting on to other benefits like claiming sickness benefit but the the economically inactive count is also rising rapidly and last month it reached 28%, the highest by far in comparison with Britain. It is the high numbers of economically inactive that is now attracting the gradgrind attention of the neo- liberal economists.

How quickly the promises of the Good Firday Agreement have turned to dust for the working class. The peace process promised a better life for all and there was much talk of a lasting peace dividend. For a few years there was all the appearance of incresasing prosperity, but it was based on bank lending, rising house prices and some increased public spending.  In retrospect the material cause of the peace process can be said to be precisely this raised State spending.

A recent study carried out by the Nevin Economic Research Institute provided data showing how the cuts may impact.  According to the report three parliamentary constituencies, Foyle, West Tyrone and West Belfast have above-average public sector employment, with West Belfast the most vulnerable to job losses with over 45% of total employment being in the public sector.

A proposed public sector redundancy scheme was announced as part of the Stormont House Agreement. The scheme is intended to “re-balance” the local economy, which is said to be disproportionately dependent on the public sector, which accounts for 31% of total local employment.

The exact number of job losses in the scheme remains the subject of speculation. The DUP Finance Minister Simon Hamilton has announced an initial “closure” of 2,410 civil service posts over the next year but trade unions have estimated an eventual figure of 20,000 job losses. The report also highlighted that the retail and hospitality sectors, which make up the second and third highest sources of employment in West Belfast for example, and which are areas where those made redundant might find alternative employment, are also the sectors with the lowest wages. (NERI Research no 20 by Paul Mac Flynn)

If so many of our people, the ‘oppressed nationalists’ are being employed in secure long term jobs by the State why are we concentrating all our efforts on destroying it? This was the objective condition faced by the revolutionary movement organised by the republican movement pre-peace process.  The long war was never targeted at the private sector just the State. We know how that story turned out.

The republican movement disarmed and then married into the State to become senior board members in a logical exercise in political thinking. Things are now changing – the British government strategy of supressing the insurgency with above-normal levels of public spending is coming to an end. You could argue that the proposed rebalancing to a private sector based economy is simply the logical extension of neoliberal austerity economics. Yet a more precise argument would have to factor in a change in the political conditions and climate of opinion.

The republican organised insurgency is finished and the peace process leverage once thought to be with Sinn Fein has all but been used up. Martin McGuiness said recently that the Tories just don’t get it like Labour did.  This was a plea for special economic clemency for the North of Ireland.  But it is Sinn Fein that doesn’t get it.  We are no more special than the Greeks.  We surely are in new times.

The Bedroom Tax and the Inevitability of Civil Disobedience by ‘Belfast Plebian’

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By now most people will have heard something about the new welfare regime due to kick in next year. The range of the welfare bill is so vast that it almost defies summary. The implications for the whole of the working class are very profound. To the unwary the welfare changes are of little importance because they think it will not impact on them, after all they are in steady employment.  Yet the changes will impact on the whole of the working class.  First of all steady employment cannot be guaranteed in the long-run recessionary economic cycle that we are certainly in and second because most workers have family circles especially parents and children that will be severely impacted. It should be stated at once that the number of unemployed in receipt of welfare benefits are in fact the minority, just over 60% of those in receipt of significant welfare benefits are in fact not unemployed.

Let’s pick out just one item that has gone largely unrecognised, changes to housing benefit and let’s be specific about it. In the north of Ireland there are currently 63,000 people registered as unemployed, however there are a lot more, 161,634 homes to be exact, in receipt of essential housing benefit, in fact 67,500 out of a total of 90,000 of Housing Executive households get the benefit, another 23,600 with Housing Associations and then another 70,000 renting in the private sector. In additions there are another 34,800 on the social need waiting list, 20,000 classified as emergency need. It is a reasonable assumption to make that most on that list would be in receipt of housing benefit if they could find a place to live.

Life is about to get a lot more difficult for many of those in receipt of housing benefit. For a start if you are single and under 35 you will only be allowed enough benefit to cover the cost of only one bedroom in a shared property. Where are you going to go to find this prized one bedroom?  Certainly not to the Housing Executive with its ever growing waiting list and reducing building programme, down to less than 2,000 planned properties. What then of the private rented sector?  Here rents are rising due to the mortgage crash – people who in the recent past could expect to get a mortgage are now no longer able get one.

The typical rent on a small house starts at about £600 per month, fine for some who have only just missed out on the mortgage bonanza but not for the poor benefit claimant who is facing a £400 cap which can only get progressively worse in relation to non-benefit tenants, the likely outcome being private landlords refusing to rent to the poor and a steady increase in homelessness.

Let’s move on now to the bedroom tax or as the government calls it, the over occupancy charge. From April next year those in receipt of Housing Benefit will have to pay a charge of 14% relative to the cost of rent for the audacity of having too much living space i.e. having an extra bedroom and others a stiffer 25% charge for having two extra rooms. You see the new welfare orthodoxy says that the working class have way too much spare capacity in their council homes.  So from April 2012 only one bedroom in a council property will be covered by housing benefit per person or per couple. If you have anything extra you will have to pay for it out of your universal credit. You see the new regime has moved on from merely targeting single people for penalty, it now reaches right into the working class family itself. If the person or couple have children the following rules will be applied.

A child aged 15 or under will be expected to share a single bedroom with another child of the same sex.

A child aged 9 and under will be expected to share with another child regardless of their sex.

You will be deemed to be over occupying your home if for example you are a single parent family living in a three bedroom council house with two teenage sons below the age of 15, or if you are a couple without children living in a two bedroom council flat, or again you will be deemed to be over occupying if you are a couple who have to sleep in separate bedrooms due to disability or sickness needs, or again you are a divorced or separated parent living in a two or three bedroom property who needs the rooms for children who only stay at weekends and holiday periods. There are just too numerous variations on this simple over occupancy theme to cover here. The above is just a sample.

How many people in the north of Ireland are to be classified by the Daily Mail mind-set as ‘wicked over occupiers?’ We don’t yet know; when Lord Freud was asked in the House of Commons about the likely outcome for the UK as a whole he confessed that the family friendly ConDem government had not bothered to commission any proper research. It has been left to charities to come up with some statistics; Shelter reckons there are probably about 800,000 miscreants in GB.  In respect of the north of Ireland all the housing charities think that the region will be affected the most, the minimal estimate I have seen is 7,000, but a web site in sympathy with the measure put it as high as two thirds of the current social housing tenants.

How much you pay will depend on your situation. The average council rent is approx. £72 per week, meaning an over occupier stands to lose at least £10 and maybe £18 from their living expenditure. To take one pertinent example, the current job seeker who is under 25 receives just £56.25 per week to live on; those over 25 receive £71. How many of those facing the over occupation charge will be able afford to keep the roof over their heads? Some will try and succeed, others will fail and will sooner or later be up for eviction. But for those scrimpers and savers who manage to make the payments there is a looming threat to their existence; the impending bedroom charge is not a final instalment, rather it is only a first instalment.

Just a year ago it was only the under 25s who were forced into one bedroom accommodation in the private sector, this has already changed to the over 35s. The Prime Minister is on record as saying that nobody has a social right to a home financed by the taxpayer, having a council home is a privilege he says not a right; he also says that he wants to dispense with what remains of social housing.

George Osborne recently proclaimed that he wants another £10 billion worth of cuts on welfare spending. In other words it won’t be very long before the charge is increased and more fall prey to the eviction notice. By the way, the small number of people who know about the new charges think that those who may fall into the classification scheme will be offered an alternative home if they can’t pay the charge, they are mistaken; there is no legal obligation on the housing authority to offer you something more suitable, this may be because these homes don’t actually exist.

What then has been the reaction of the local politicians who say they oppose the new reforms?  Answer – bluff and evasion? Well they have passed the welfare bill, so far without amendment, the so called concessions they are championing are entirely procedural. Are they preparing to drop the over occupancy charges? No sign of it. They play the evasion game by not talking about the housing benefit part of the welfare reform bill, hoping that nobody of any importance will notice it. It is to be revealed to the unsuspecting working class voter, Cilla Black style surprise! Surprise!

Come April next year people will suddenly find out about it and it will be too late for them to turn to the local politicians for some sort of protection. The politics of this whole affair needs to be discussed now. Why are the Tories attacking the living conditions of the working class in the home and not just in the workplace? They will not even save any money on housing benefit at least in the first instalment.  It makes no macroeconomic sense and looks more like a very nasty political stoke of class divide and rule than an attempt to solve the chronic housing crisis.  Perhaps they believe that it will destroy what little remains of working class social solidarity. We know that GB has a horrendous housing crisis, those who are desperate to find a home will now be ‘educated’ by the pernicious right wing press to blame those wicked over occupiers for their unfortunate condition.

One of the splendid ironies of the impending social disaster is that the seniors of both nationalists political parties swear that they were indeed the very the people who fashioned the civil rights movement that began life as a protest and even a disobedience campaign against the Orange States’ grossly unfair housing policy. If things are programmed by Stormont to follow the requisite course set by the Welfare Bill they will have to oversee a new set of grievances in respect of housing policy of even graver consequence than went before.

Untold numbers of working class people will not be able to meet the new rent charges out of living expenditure. Not being able to find alternative smaller homes when the eviction notices start to fly; they will inevitably opt to refuse to pack up and leave their existing homes. The nationalist politicians sitting in Stormont will have to persuade them that it is a bad idea to ‘squat’ in a house that they believed falsely was theirs by right.  They will have to tell them that the incomes of the hard pressed British ‘middle class’ taxpayer must take precedence over their own voters social need. They will have to appeal ever more to sectarian instincts rather than to definite social progress to keep the party vote in place. Long live the nationalist political class! Long live the unionist political class! Long live the new dispensation!