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After the Gold Rush

Scandals abound in the private ‘employability and work-based training’ sector. The latest of these involves the company A4e, whose workers are up before the beak on fraud charges, much to the outrage of the self-righteous press, while the former proprietor Emma Harrison has walked away clutching millions. Just who is being defrauded here, and what exactly goes on in these companies?

Once upon a time unemployed people signed on at the Benefit Agency, which would administer their unemployment benefit payments, and then were sent to the Jobcentre, run by the Employment Agency, where they would look at rows of vacancies on cards and receive advice on CVs and applications from Jobcentre staff.

Around 2001, as part of my work with local charities, I attended a briefing by Jobcentre staff who explained with much chagrin that these two offices were to be merged, many of them put out of work, and much of the heavy lifting formerly done by trained staff now farmed out to regional call-centres using untrained workers on minimum wage following printed scripts. The unemployed, now termed ‘customers’, could look forward to a streamlined conveyer belt service that had neither the time nor the expertise to give them any worthwhile advice at all, while high-need users could expect to fall through the net altogether. This was the great Jobcentre Plus ‘rationalisation’ of 2002, in which Treasury money left the equation and the slack was expected to be taken up by the employment-oriented European Social Fund.

What none of us anticipated at that briefing was the longer term effects of this cost-cutting exercise by the Department of Work and Pensions. Just as companies who farmed out their IT requirements end up hiring ‘experts’ at vast contract rates, often to deliver trivially simple upgrades, so the DWP in trying to save money had created a vacuum of ‘employability support’ into which a blizzard of private companies rushed, hoping to cash in on the bonanza. Such was the unregulated confusion of this early gold rush for DWP and ESF funding that a good number of cowboy start-ups got in on the act, aiming to take the money and run. Almost anyone, it seemed, could pretend to be a college or training centre and pull down state cash for doing nothing. As each scam was exposed rules were tightened up, but the employment services industry has been rocked by successive waves of scandal ever since.

The initial swarm of gold-prospectors have mostly left the field, either bankrupted, busted or bullied out of the way by a few big players, whose national reach attracted ever larger DWP grants. Small charities were early casualties, as was the risible notion that small and local organisations were best-placed to find jobs for people in the local area. A few big corporations, mostly college-backed, mopped up the market and all the money while farming out the donkey work to these same local organisations who then had to deliver higher targets for less money than ever.

Contracts were awarded by the DWP or the ESF for starts on work-based training, backed by retention, and for job or qualification outcomes, all of which was to be exhaustively evidenced by signed documentation. Since most contractors had their own documentation systems, and few spent money on computerisation, this soon developed into a bureaucratic paper-based nightmare that meant workers spent more time ‘evidencing’ their work than actually doing it. Inevitably the cracks appeared, and workers increasingly had to ‘fiddle’ the paperwork to meet the requirements of nit-picking inspections. Failure to pass these inspections could mean funding being ‘clawed back’, and my not unusual experience was having to stay up all night forging hundreds of ‘attendance sheets’ for long-gone volunteers simply because funding requirements dictated full attendance and conscientious form-filling - in flagrant defiance of the practical realities of dealing with the long-term unemployed.

Workers though tried for the most part to avoid genuine fraud over job documentation, partly because of the heavy penalties but mainly because unlike the ruling class workers are not generally comfortable with criminality. But the competition for contracts being intense, the bids were always excessive, and thus the pressure to cheat was built in. Rarely could a job outcome simply be invented out of thin air, because the individual would have to sign off benefits. But other ‘target-buster’ methods could be employed. People were signed up as starts who already had guaranteed jobs to go to, creating an instant outcome. In cases where jobs had been obtained after the end-date of eligibility, dates could be massaged. Sometimes an employer would refuse to sign a job declaration even though it was for a genuine job, so these were liable to be forged. Where more than one funding provision was offered, people were daisy-chained from one to another, picking up duplicate funding on the way. Then as a bonus, if they got a job, each of the provisions could claim the same job, effectively doubling or tripling the outcome figures. Most notoriously, under instructions from senior management, workers would ‘traffic-light’ clients, giving most help and attention to ‘greens’ who were most likely to succeed, while largely ignoring the extensive needs of the ‘ambers’ and the virtually unemployable ‘reds’, thus defeating the whole point of such schemes and fully justifying the accusation that firms were being paid for jobs that people would have got in any case.

Unemployed people, it is fair to say, sometimes get something out of these schemes, either through volunteering for charities and getting some useful work experience, or by gaining a few low-level qualifications. While the principle is that the firm finds them work, in practice they usually find their own work, largely by their own efforts, with the added incentive of being hounded by the firm whose targets are their real focus. Where the schemes were voluntary or quasi-voluntary, relations were reasonably good-humoured and often constructive, but where they are compulsory, as in the Work Programme, staff and clients are polarised in a palpable class-war tension with frequent eruptions of anger and frustration. Those who most need help get the least, and swill round a never-ending gutter of government schemes delivering the same inadequate provision in the same inadequate way.

Hardly surprising that morale is pretty low among staff, faced with impossible monthly targets, short contracts, a management which couldn’t care less about the people involved, a penny-pinching lack of equipment or training and an endless sea of largely meaningless paperwork designed merely to keep up appearances. Workers who are caught cheating (i.e. doing their job) will be cold-shouldered by the firm and prosecuted by the state, the sacrificial lambs of an industry that is systemically fraudulent.

Who is being defrauded? Not the state, which gets what it wants, the appearance of action plus deniability, and is so cosy with contractors that it refuses Freedom of Information requests even to divulge the names of fraudulent companies (Private Eye, 6 April); not the private companies which coin it while passing on the labour and the risk to others. No, it’s the abused, under-paid and under-resourced staff who are being defrauded of their mostly well-meaning intentions and made to risk jail on behalf of their masters. It’s the unemployed who are being defrauded, mere pawns in the game, there to have their time wasted and their self-respect demolished. It’s workers everywhere who are being defrauded in the belief that the capitalist state cares about the unemployed, or the low-skilled, or the sick or the needy, when really the capitalist state spends extravagant sums simply to maintain that appearance. Private investors quietly make off with criminally record sums while workers just get the criminal records. All in all, it’s the sort of work-based experience that should open a lot of eyes and dispel a lot of illusions. If capitalism were a worker, it would get the sack in no time.

‘Ronnie Biggs’