Teaching Comparative Government and Politics

Tuesday, December 13, 2011

An uphill struggle

To get an idea of what reforms the coalition government says it's trying to carry out, here's The Economist on welfare reform in the UK.

The unemployed are suffering, but things aren't easy for the government that is trying to find an affordable solution.

Nice work if you can find it
The government has set about a thorough reform of benefits. Iain Duncan Smith, the work and pensions secretary, wants to replace six housing and work benefits with a single universal credit…

But the Work Programme, launched in June, is the big idea for getting more people off handouts. It has commissioned 18 main providers to deliver 40 contracts across Britain at a cost of up to £5 billion. Seven-year contracts to remove the uncertainty of changeable government schemes are coupled with incentives to get people into long-term jobs and keep them there.

EOS, [one of the contractors]… has attempted to replicate workplaces. Local firms can set up shop in its employment centres to try out employees. From a gallery above the shop floor, prospective bosses can look down on those going about their tasks and select the most diligent workers. Trade skills like plumbing and basic construction are taught, while in classrooms, jobseekers—known as “clients”—learn how to use the internet and personal networks to sniff out local jobs…

Besides delightful things like a gym, a café and free computer facilities lurks the threat of benefits forfeited. EOS quickly sends out reminders to those referred by jobcentres who fail to turn up. After that, they are notified that welfare payments can be withdrawn. No figures are yet available for how often this has happened, though Chris Grayling, the minister responsible for the measures, insists that the threat is “already changing behaviour”…

Some believe that the payment-by-results system itself is failing. Ian Mulheirn of the Social Market Foundation, a pro-reform think-tank, says the scheme is in danger of financial collapse because many contractors are missing their targets: “The only question is when ministers will face up to it.” He estimates that even the most efficient schemes can move only 10% more people to jobs who would not have found work by themselves…

As the jobless figures continue to rise, some unfashionable ideas are returning. Graeme Cook, an analyst with the Institute for Public Policy Research, a centre-left think-tank, believes that the coalition should provide state-sponsored jobs to ensure that young and long-term jobseekers don’t stay in the cold for too long. Although the coalition formally resists this New Labour-era idea, the chancellor recently agreed to provide some wage subsidies for companies employing people who have struggled to find work—and to channel £300m into apprenticeship schemes…

The coalition’s impatience with what David Cameron, the prime minister, calls “sick-note culture” is laudable. So is its determination to make state handouts a last resort rather than a way of life—a goal that eluded the previous government, which nonetheless threw a lot more money at the problem. Opinion polls show strong support for an overhaul of welfare. But over-hyping the impact of a single programme when the stubborn central problem is slow economic growth does not seem wise…

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