Privatisation of employment schemes

The Brighton Benefits Campaign today distributed a press release announcing a day of protests outside the offices of A4e, CDG and Maximus on Wednesday 16 June. I’ve included the press release in full at the bottom of this post.

Under Labour rule, million-pound contracts were given to private national companies to deliver a programme called Flexible New Deal (FND). The idea of FND was to provide the long-term unemployed with every opportunity to return to the workplace. Anyone unemployed for a year or more would be given intensive assistance in finding training and work placement opportunities, as well as help with confidence building and CV/interview techniques etc. Great idea!

The problem is, that the companies providing these services only get paid on job outcomes. In other words, they only receive payment for their work when a client secures and retains employment.

Now in theory, this is a nice idea. However, what actually happens is those people who need intensive help are pushed to the back of the line to make way for those who can be placed into work quickly and easily.

Going forward, the ConDemNation this week announced initial details of their Welfare to Work scheme. No one should be surprised to learn that the scheme continues in the same vein – with private companies delivering these crucial government services – however providers will now be paid THREE YEARS after the start of the contract, in order to monitor the sustained progress of the client.

Again – all well and good. However, the companies managing these contracts are going to have to work three years in hand, and this will no doubt bring its own pressures. The funniest thing of all, of course, is that despite all the pressure that the ConDemNation plans to put on the unemployed to get back in to work, there is STILL NO WORK OUT THERE. Maybe Mr Cameron would like to have words with his friends in the private sector and see if they would like to start employing again? Maybe Mr Cameron could speak to Mr Murdoch and find out what his organisation’s policy on employing people with mental health problems and combating stigma in the workplace is?

I understand that cuts across the whole third sector will have similar effects in harming those most in need. By instigating “new” targets, all this government is doing is creating their own little set of statistics to brag about. Unfortunately when you look beneath the surface all you’ll see is, once again, those most in need being screwed by this short-sighted government.

Brighton Benefits Campaign
c/o 4 Crestway Parade, The Crestway, Brighton BN1 7BL
01273-540717 Fax 01273-540797

12 June 2010

PRESS RELEASE
CLAIMANTS AND WORKERS
REJECT BENEFITS PRIVATISATION

On Wednesday June 16th, Brighton Benefits Campaign will be protesting outside the offices of A4E, Career Development Group and Maximus as part of a National Day of Action against the “Flexible New Deal” called for by the No to Welfare Abolition group.

Benefit campaign groups, claimants and workers nationally will be protesting against the Flexible New Deal. This scheme,  introduced by New Labour, is set to continue in a new form under the Tory/LibDem coalition. Contracts worth millions are being given to private companies ( “providers”) who take responsibility for helping those unemployed for over a year to find jobs. These private providers then receive payment for every person they help find work.

However, campaigners criticise the scheme for financially rewarding the providers for forcing people off benefits, using arbitrary measures such as sanctions and the threat of withdrawal of benefits. Recent reports have been released supporting these claims, showing that the providers have failed to hit the majority of their targets and are failing those who need support most.

They have been accused of “creaming and parking” – profiting from those who don’t need help finding a job, and writing off those who don’t need support as unprofitable.

These schemes do nothing to help create new jobs and merely force claimants to take low-paid work with no job security, driving down the wages and conditions of those already in work.

Lee Vernon, of BBC says, “The FND does not help people back to work. We are in a recession and there are no jobs. It is simply privatisation of our public services, using taxpayers’ money as a subsidy. This is part of a wider trend in welfare reform of forcing people off benefits into any work to drive down wages and conditions, to the detriment of existing workers. The only solution to unemployment is investment into public services to create new socially useful jobs.


The scheme is wide open to fraud. In 2009, A4E were being investigated by the DWP over allegations of making false claims of getting people into work. Maximus, a Workfare provider in the US, has also been implicated in a series of fraud cases and misuse of public funds.


Brighton Benefits Campaign has already hosted protests against the Flexible New Deal Providers and is campaigning against all attacks on the benefits system including the introduction of ESA and slave labour schemes such as the Community Task Force.

For Immediate Release
For further information contact: Tony Greenstein 01273-540717/07843350343

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