Press release: Privatisation of employment service should be next step in government’s welfare reforms

The Association of Learning Providers (ALP), which represents the majority of providers who have been awarded contracts today to deliver the government’s new Work Programme, has welcomed the trust which ministers have placed in private and voluntary sector providers to deliver such a vital component of their welfare reforms.

The Association believes that the adoption of a ‘black box’ design for the programme will prove to be enormously beneficial in terms of enabling providers to be flexible in the type of support they can offer unemployed people on a case-by-case basis. 

ALP has previously expressed concerns about the viability of the ‘payment by results’ terms within the Work Programme provider contracts.  However it recognises that the programme should be given a chance to succeed and it has taken on board the recent assurances that the employment minister gave to the Commons select committee in the event that contractors drop out of the programme. 

Under the Work Programme, providers will be referred clients from the government’s employment service, Jobcentre Plus, after one year of being out of work, but ALP is asking whether unemployed people should have to wait to get specialist support. 

Graham Hoyle OBE, ALP’s chief executive, said: “We applaud the radical approach that the government has taken on reforms to welfare-to-work framework and the confidence which it has placed in the provider network to deliver sustainable results when unemployment is on the increase.  In keeping with the overall reform of public services, the next logical step is to privatise Jobcentre Plus and to allow it to compete with other providers in assisting people who have been out of work for a short or longer period.”   


The above is the real reason why the likes of G4S, Serco et al are in this game. Oh to get your hands on JCP and the Estate.

Dont worry guys, it wont be long.

Two things strike me about this statement. Firstly how out of touch ALP are with the mainstream of opinion in the sector. far from applauding the "radical" changes, Hoyle should be asked where is the third sector involvement and where is the bite fo the cherry Grayling promised everyone last month.

The second is the inevitability if Hoyle's final statement about the 'selling off' of JCP. The private sector have wanted to get their sticky hands on this element of welfare for some time. With so many civil service redundancies being made and as the government start to show their true colours there is a sense that this is more a matter of "when" and not "if".

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Tacitus: Whilst I don't disagree with your assertion; privatization of JCP has been 'on the menu' for a very long time; only the political will has been lacking, I can't really see what the objection is. If a private organisation can do the job well and for less money, isn't that a good thing? And let's face it, could it actually be any worse than it is?

Ingeus/Deloitte = JCP in a private incarnation in a couple of years, using WP as the way in, think about it why on earth would you want to run the headache of the WP for little or no money if there is no longer term plan, Deloitte are bankrolling this to smooth the way.

Private sector "sticky hands" Tacitus - JCP has been a disgrace for years, it is about time they were privatised, think of how much time they have with jobseekers before "handing them over" to programmes and just how little is done with the jobseeker during their JCP time (and please do not suggest they do not have time or resoiurce), I am sick of seeing customers sat with JCP then shunted to a private provider who get slated baecause they cannot solve their drug/alcohol/homeless/debt problem in 13 or 26 weeks when they have had years to sort it.
Payment by results is the way to go - bring it on

Well said!

Andy - my argument against the privatisation of JCP is severalfold.

Firstly, David Freud has already conducted a review of work done by JCP and concluded they do an excellent job. If this is the case, why is there any need to change it? Surely the old adage of "If it ain't broken, don't fix it" applies.

Secondly, the evidence from Pathways to Work has been that JCP actually performed better than private contractors, so the notion of transferring additional powers to these companies seems a little tenuous.

Thirdly, the fundamental reason for the existence of JCP is to encourage people back to work and thus reduce division in our society ie minimise the extent of poverty. Ye, privatisation is guaranteed to create greater profits for an elite. Already we have a situation where:
• 793 top earners are worth £2.6 trillion – the entire sum of developing
countries foreign debt
• The remuneration of the CEO’s of largest 500 companies is more than
430 times that of the average worker – 10 times more than in 1980
• 80% of wealth belongs to the top 10%
Increasing the profits of the private companies and thus encouraging CEOs to add to their already overblown salaries does little to help the poor.

Fourthly, the civil service have already been forced to face considerable cuts that have resulted in substantial numbers of people being made redundant. Within our own sector we are currently seeing many of our own people being forced out of work because of a change in contracts. Whether it is because of the nature of the contracting system, or because the providers are just bad employers, the history of staffing in this sector has not been good. If the sector were to be allowed to take control of JCPO we can be assured a large number of people would be dismissed.

At a time when unemployment is already running at over 2.5m and destined to increase it would be foolhardy to implement a scheme guaranteed to increase those numbers.

Finally, Andy and 'disgruntled' you assert that the private sector could do the job well and that JCP are a 'disgrace'. Unfortunately, the only evidence we have at the moment is past behaviour and currently there is little evidence to suggest the private sector works any more effectively than JCP ...and at a cost of several billion pounds, it is hardly a cheap option. With only 8% of clients moving from unemployment into full-time sustainable employment I am therefore inclined to conclude that JCP may not be the best option, but they are certainly no worse than the private sector.

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Good point Campbell. Just wish our employers were fighting as hard for our jobs. We lost our CPA and if the Scottish situation changes, because of this campaign we could all benefit. Thousands of people losing their jobs and barely two lines of press coverage. One organisation shouting loud in Scotland and it gets major coverage.

With the announcement this week of another strike by JCP staff over their "working conditions" and "target-driven culture" would any private firm WANT to take it on? Those staff and the unions would remain (good old TUPE) but the target-driven culture would most likely increase and working conditions decrease eg real world conditions rather than civil service conditions. I think they may be on permanent strike if they had to cope with what people working in the private welfare to work sector have to, and I'm not sure JCP staff are going to get too much sympathy from people in the sector currently being made redundant.

Tacitus - just how much does it cost to run JCP? - billions with little to show for it, the private sector will do it more effectively and more economically.
Poor past performanhce is sufficient to suggest they will not get any better.
Pathways - come on, it has been well documented that the programme was doomed to fail from the start, promises of new customers were broken and "stock" (very hard to help) customers were referred in the early days, the amount of customers who had long term mental health issues meaning they were categorically unsuited to work were kept hidden.
JCP does virtually nothing for customers yet expects the private sector to work wonders, some of the customers found jobs within weeks of private sector provision often having languished for years with JCP.
privatise it NOW !!

Your rhetoric fails to offer any evidence to counter my assertions 'disgruntled'. Polemic is all very well in a debating chamber, but without hard data I can see no reason to change my argument.

The facts remain government ministers have themselves agreed JCP is working extremely well. The facts also show that performance from private contractors is at best only on a par with JCP and at worst, below it. If you can offer numbers to counter this, please publish - otherwise we must believe the information supplied by David Freud.

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I am talking fact, job seekers languish for years with JCP then move to a programme with massive amounts of barriers that JCP did not even attemp to deal with.
I know of advisors who have had to deal withjob seekers in London who cannot speak a single word of english but had been claiming JSA for 2 years and needed to employ interpreters to illicit basic information - explain the rationale on that.
Also, you did not answer the question on JCP cost - it is billions and they are not succesful, if they were they would not be in the position they find themselves in - privatise them now.

Your points:
1 - well they would, wouldn't they? Are any ministers or anyone closely connected with the seat of power going to admit that a department is doing particularly badly? Of course not.
You've kind of made an assumption about me; I've been working in the W2W sector for 16 years. I left two years ago for an advisory post with HM Gov and was made redundant in the latest quango cull. so I'll be coming back.
2 -what evidence? Oh, that produced by JCP. Do me a favour.....
3 - Quote top earnings all you like; it makes not one iota of difference to JCP not being run well. You cannot equate earnings with inefficiency.I'm coming at this from a 'user' perspective and more recently from close up personal use! 16 years working at a senior level in both private and third sector organisations and yet I was made to attend a 'how to get a job' one hour training event, 32 miles away, for which they had to pay my travel; why? Because the rule book says so and JCP advisors either can't, or aren't allowed, to think for themselves. One young man was there who had already got a job and was starting on the Monday of the following week, but because he was still claiming and the rules said....Ridiculous.
And in nay case, what the hell is wrong with wealth creation. You talk about money and top earners as if they're committing a sin. Given a chance, 99.9% of the population would swap with them in a breath.If I'm truthful, you rather give the impression of a 1970's trade-unionist of the Red Ken type; why not just nationalise everything!

You've had a go at 'Disgruntled' because you say, his arguments are not fact based and yet several of your points are made in the same manner. Where's the proof that there would be any net unemployment? TUPE would apply in most cases and, if after a while, those who aren't performing were let go, that can only be good for the end user. And in any case, the eventual net losses would be no greater than those planned by government anyway. Over the longer term, as a country, we'd be likely to save billions in salaries and gold-plated pensions. Privatising JCP was one of those issues I advised Gov about and believe me, the sums look excellent over a 10 year period.

Your final point again offers no real tangible proof; the only measure of a good argument according to your good self. Spend some time in one of them; take good look at how advisors get around 10 minutes per client; not enough time to help anyone in any meaningful way. Take a look at just how few front-line advisors are actually clued about what's going on in their area. And of course, the above example, which is repeated up and down the country every day, is just one example of a huge waste of time and money.

If JCP are so good, why isn't the work programme being run by them?

I am sorry my friend; I believe your intentions are heartfelt; you seem like a caring kind of person but I think you need to wake up and smell the coffee.

Andy Ellis - grrat points, well made.
Sit back and await Tacitus come right back at you.
I agree he is stick in the 70's, problem is he does not seem too inclined to answer points where he is being shown to be wrong.
I agree that there would be no private sector organisations if JCP did their job properly.

Firstly Andy i fail to see how you can argue that I 'have made assumptions about you' when I have made no comment about your past. Secondly I think you will find Freud made those comments whilst he was advising the labour government and not under David Cameron's administration. As an advisor to Gordon Brown he had nothing to gain from making those comments and everything to gain from condemning Labour's running of JCP.

You appear unhappy about accepting government published data, yet seem to be unable to produce anything evidence based to counter their analysis. I'm sorry, but 'do me a favour' fails to answer the argument.

I am not suggesting JCP is all sweetness and light. Of course there are problems with the way it has been run, and indeed as a past adviser to the Department you will be equally aware of their own internal research that has argued pretty much that point. However, throwing the baby out with the bath water appears (to my mind) ludicrous. The simple reality is, as I have stated before that the private sector have faired little better in their dealing with unemployment. Statistical data on the results from a variety of programmes have demonstrated a very poor return for the money invested by government.

I would suggest that the notion of whether or not to privatise JCP comes down ultimately to ideological reasoning rather than any other factor. If you are a supporter of a Thatcherite market economy you will leap with glee at the notion of turning JCP and most of the welfare state over to private enterprise. If, on the other hand you have lived to see communities decimated out of the greed and profiteering that emerges from the craving for profit, then you will lean towards greater state interventionism.

Needless to say, I take the latter approach. If that places me in the realms of sounding like a 1970s trade unionist of the Red Ken type then I apologise. I clearly have not come over anywhere near as militant as I feel. 1970s trade unionists often opted for a softened left-wing position and this ultimately became their downfall. You may not like or welcome hard left wing arguments on this forum, well my resposne to that is simple. Live with it. The days of simple acceptance of right-wing 'sell-it-off' and damn the workers days are coming an end. Interestingly, whilst you may find my arguments distasteful, my email inbox is growing by the day with more and more people supporting my analysis. Perhaps you should reflect on that before dismissing my position so readily.

I thank you Andy for your generous comment in your last paragraph and you are right I do care. I care passionately about the people who work in this sector - both in DWP and those in the private sector. I despise the division between maangement and workers I see and the huge differential between the salaries of those in senior management and those on the frontline. I hate the idea of hundreds and hundreds of people who have given their hearts to helping people find work now finding themselves jobless - because Iain Duncan Smith wants to cretae an unnecessary ideological shift in our dealing with the unemployed.

If that makes me naive and an idealist - I stand accused. But I will continue to shout as loud as I can because I want to see something better. I want to see people in this sector able to develop thei careers without having to face 5 year cycles of redundancy. I want to see unemployed people genuinley helped - and to my mind, allowing senior executives and shareholders to line their pockets is not the way to do it.

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Tacitus -your comment - "I want to see unemployed people genuinley helped - and to my mind, allowing senior executives and shareholders to line their pockets is not the way to do it"

Is it ok that Dara Singh of JP earns a salary between £185-189,999?
Surely he stands in the same dock - as a senior executive lining his pockets whilst trying to help the unemployed.
Is your model that everyone who works for an organsiastion all be treated the same and all earn the same (low) pay. I believe this is what China was built on - now there's an idea

Tacitus: the fourth point in your earlier post started with ;'in our sector' which kind of implied that I was outside of it and didn't know what I was talking about; that was the assumption of which I spoke.

I'm not actually an advocate of any particular political dogma, preferring instead to simply follow the evidence of my own eyes and do what I know works. I have worked for both private, not for profit and third sectors; I've worked for local authorities and central government and I've worked with young people and adults so I think I have a pretty broad knowledge base. My experience is that both local and central government are weighed down by political dogma and are inefficient because of it. The third sector has the most dedicated staff but the poorest systems and are almost always unduly bogged down by their particular aims and objectives, preventing a broader view. Private sector organisations are often much more demanding, more goal and target oriented (yes, because of targets and the drive for profit) but it's precisely because of that, that they get results.

I have no data that shows private sector are poorer payers than the public sector other than in the pensions dept. Indeed, my lowest salaried positions have been within the third sector who appear to believe in, and indeed play on, their workers' dedication to the sector in which they operate in order to offer lower salaries. Similarly, the gap between management and workers is invariably no different in the third sector than it is in the private sector and actually comes down to individual managers, rather than any embedded culture.

I actually started my working life a a miner and trained as an electrician with a local colliery. I was involved in the terrible strikes and saw the damage done to the community in which I lived and in neighbouring communities. And I witnessed the same thing in Sheffield and Rotherham during the great steel sell-off; so I think I'm in a position to judge right from wrong here. The Private sector didn't CAUSE these upheavals; adherence to political dogma did that as enshrined by the Thatcher Government. and in South Yorkshire at lest, it was a private sector rescue in the form of new industries that rescued more than 90% of those steel and mine workers who had been made redundant. so I just don't see the private sector as the big bad wolf in the way that you appear to. I don't think you can just 'blanket judge' them as you have.
I don't so much find your arguments distasteful as puzzling and perhaps a little naive. I too want to see something better and I think the only differences in our stance is how best that can be achieved.

I worked for a think tank for HM gov on all things to do with employment and training and I can tell you now, many of the published reports are watered down in order to tell Gov what they actually want to hear. so do I distrust Government reports - you betcha; with very good reason. I am sorry that I can't be any more specific than that in a public forum; the official secrets act forbids it and since I'm looking for employment currently, I don't really want to get into any legal wrangles; hopefully you'll understand that. I would ask that you simply accept my word that public documents don't always contain the whole truth!

I'm well aware of Freud, Leitch et-al; when they were commissioned and what they say. But you see, the recommendations in these have been cherry-picked too.

JCP are going on strike I see; so much for their 'care' of the unemployed. The post immediately above makes a very good point about Dara Singh and of course, there are many others. DWP frontline advisors were being advertised for recently in my area at a starting salary of £18k. Serco were advertising similar positions at £22k. Are the workers, about whom I genuinely accept you care for, being treated better by JCP or Serco?

Andy Ellis

"My experience is that both local and central government are weighed down by political dogma and are inefficient because of it. The third sector has the most dedicated staff but the poorest systems and are almost always unduly bogged down by their particular aims and objectives, preventing a broader view. Private sector organisations are often much more demanding, more goal and target oriented (yes, because of targets and the drive for profit) but it's precisely because of that, that they get results."


"third sector who appear to believe in, and indeed play on, their workers' dedication to the sector in which they operate in order to offer lower salaries."

I hear you!

Andy - just a couple of brief points. I am not insinuating you ar outside the sector and my use of 'our' assumed joint involvement.

Secondly, of course it is outrageous that JCP staff should be paid a mere £18,000 pa. However, as to whether they are treated better by Serco rather than DWP is a separate issue. In terms of the way they treat staff, Serco (and any other training provider) may be the greatest thing since sliced bread, but they are victims of a systems that makes their staff vulnerable every five years or so. If the company fails to win any contracts, their staff face joblessness. Conversely, staff at JCP have a little more job security - though I accept this government are eager to take away even this small advantage.

As for the reason JCP are going on strike? Well in Scotland the PCS president said: “We are being prevented from providing a good quality service to the public because of unnecessary and unrealistic call centre targets.” Clear evidence that strike action is purely because of their desire to support the jobless.

Finally, there is no dispute that Third Sector workers are paid appallingly and that the Trustees often rely on staff dedication to achieve astounding results at little cost. Perhaps this is a reason why my earlier argument for broader unionisation across the sector might help address many of these issues and resolve the discrepancies between high paid senior executives (in private, public and third sectors) and frontline staff.

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