Archive for July 5th, 2010

G4S, Scottish communities benefit from employment programme, Solution to making the Work programme


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G4S explains that the AME/DEL formulation of the problem is wrong.

There is no funding challenge.
Raising the capital required by the Work Programme is not difficult and the sums of money are readily attainable by credible, stable potential Prime Contractors. So there is not a funding challenge as it is currently conceived.
There is however a real challenge around getting the risk balance right
Three propositions are presented:
Proposition 1

  • A ‘Discovery Phase’ (DP) period  that properly shares risk and reward between Prime Contractors and the State
Proposition 2
  • Accelerated Risk Transfer (ART)
Proposition 3
  • Macro-Economics & Contractual mechanisms. This is where providers are only rewarded for outcomes that they caused and they providers are not penalised for factors beyond their control

READ Full text here

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At this years Welfare to Work Conference concerns were raised with both Lord Freud and Chris Grayling MP about the WCA

But who is the company at the heart of the Work Capability Assessments?

The company is called Atos Healthcare and it is assessing IB claimants at around 50,000 per month.

According to reports Atos Healthcare is finding that only 5% of claimants are unfit to work.

A third of those being judged ‘Fit for Work’ are disputing the decision and 40% win their appeal.

This figure increases to 70% for those who have legal representation.

Minister for Employment Chris Grayling MP has announced that there is a review of the WCA to ensure that the assessment is fair. But he added that the government would not be rolling back on their commitment to help people into work.

Atos Healthcare have outlined what claimants can expect in their;


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Prof. Paul Gregg who advised the last Government wants the Coalition Government to postpone the reforms he helped to design.  Paul Gregg, a Bristol University academic, says that it would be “scary” to move up to 2.5 million incapacity benefit (IB) claimants on to the new employment and support allowance (ESA) in October.  All new claimants have had to apply for ESA, which includes a work capability test, since October 2008.  The benefit is essentially a payment of last resort for those who are genuinely incapable of working.


James Purnell commissioned Paul Gregg’s review in July to examine the effectiveness of conditionality within the welfare state to apply rules fairly across the system.

Professor Gregg’s report, Realising Potential, looked at the requirements placed on the unemployed and called for a new attitude to parents with young children and those on incapacity benefit who could work in the future.

It recommended that a long-time vision for personalised conditionality and support is required for three broad groups of benefit claimants:

•        A Work-Ready group – these are customers who are claiming Jobseekers Allowance and are assessed as being immediately ‘job ready’ and should be able to make a prompt return to work

•       A Progression to Work group – for people where an immediate return to work is not appropriate – but would be possible in time

•        A No Conditionality group –  where no conditionality whatsoever will be applied – because it is not appropriate as they either have a particular severe health condition or disability, or they are a carer or a lone parent with their youngest child under the age of one.

The review recognises conditionality as an effective way of improving employment rates and reducing child poverty. It recommended that nearly everyone on benefits should be required to take steps towards finding employment; with claimants treated as individuals, and empowered to design their own route back to work.

Professor Gregg recommends making sanctions quicker, clearer and more effective with a simple and understandable system of fixed penalties for most occasions with a targeted, escalating series of sanctions for repeat offenders who refuse to play by the rules.

THE REPORT: Realising Potential

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Whilst it is true that individuals could do much more to help themselves out of poverty. Very rarely is poverty self inflicted: it is usually the result of circumstances beyond an individual’s control.

Poverty, however does not occur or remain in isolation but it is usually exacerbated by socio-economic conditions including a lack of jobs – and where there are jobs – they are low-paid, short-term, part-time, unreliable and insecure. Individuals are likely to spiral into increased dependency and ultimately intergenerational unemployment ensues which further excludes, compounds and reinforces their individual and collective position. The myth is that the poor contribute very little to society:  actually; the converse is true: many people living in poverty do make important contributions through caring for the elderly, disabled, looking after the children of friends and family and volunteering. As I discussed in previous postings, our dysfunctional benefit system fails to support these and other people when they wish to transit into work.

In addition to the fact that people trying to move into work only keep a few pennies in the pound from what they earn, the costs of getting to and from work simply compounds the problem.

This does not even begin to account for those for whom work is just not viable due to health concerns and also because of their other familial responsibilities – which have financial implications to family and which has so far saved the state money…..

…yes I know…. we only hear about the costs and the scroungers …. not about the so called benefit louts who are in fact saving money…   .

What do I recommend?

If we accept that people living in poverty do wish to contribute to their communities then I propose that in addition to simplifying the benefit system, increasing the earnings disregard, tapering benefit payments as proposed by Centre for Social Justice, and supporting start-up and micro businesses, that through the Community Allowance scheme the unemployed would be allowed to take on small amounts of paid community work without losing benefits.

Participants would be permitted to register for a maximum of 52 weeks. Maximum earnings on top of benefits over the year would be capped at £4,469 or the equivalent of up to 15 hours a week on the minimum wage. Participants would be paid the minimum wage or more depending on the kind of work available and their skill base.Community Allowance.

I think this could be the answer to making the Work Programme work!

12 months on Community allowance in addition added to the cost paid to providers is a win win: everyone benefits and the Treasury saves.

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On all accounts the Welfare to Work Convention 2010 was a success…… t


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Companies admit that they reject applications from former IB claimants or people with a history of long-term incapacity or illness. it is interesting that The Times is quoting this now given that the original research was undertaken in 2006.

A CIPD survey of more than 1000 employers found that almost 1 in 5 (18%) did not consider job applications from people on IB for reasons of mental ill health. 1 in 10 employers did not consider applications from people on IB for reasons of physical ill health. CIPD found that for all IB claimants, effective exclusion from the recruitment process was relatively high in the private sector and amongst small and medium sized employers.”

…the measures designed to improve work incentives and provide support for claimants who have the potential to work will need to overcome concern on the part of a significant number of employers about the potential employability of people with a track record of poor health, says CIPD’s Chief Economist John Philpott.

CIPD report

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