George Osborne Wants More Workfare, But Official Evidence Says It Does Not Work

Chancellor of the Exchequer George Osborne leaves The Midland Hotel at the start of the second day of the Conservative Party Conference at Manchester Central in Manchester.
Chancellor of the Exchequer George Osborne leaves The Midland Hotel at the start of the second day of the Conservative Party Conference at Manchester Central in Manchester.

George Osborne has unveiled a major benefits clampdown that could affect hundreds of thousands of claimants currently going through the coalition's flagship 'Work Programme'.

The Chancellor says the new 'Help To Work' scheme, which comes into effect from next April, would force welfare claimants who have been unemployed for up to three years to either do 30 hours a week of unpaid community work, report to a job centre daily or undergo intensive treatment to tackle underlying problems like illiteracy or mental illness.

Potentially, around 200,000 long-term Jobseeker's Allowance claimants could be find themselves subjected to such sanctions. The scheme, devised by work and pensions secretary Iain Duncan Smith, would cost £300 million to implement.

"For the first time, all long term unemployed people who are capable of work will be required to do something in return for their benefits to help them find work," Osborne told party members at the Conservative Party's annual conference in Manchester.

"Help to work - and in return work for the dole. Because a fair welfare system is fair to those who need it and fair to those who pay for it too."

Jobseekers could be made to report to the job centre every day

But will the chancellor's ramping up of a US-style 'workfare' (or welfare-to-work) programme actually help reduce the so-called "something for nothing" culture and cut the number of long-term unemployed in the UK?

The Department for Work and Pensions' own 2008 internal analysis of similar programmes that were implemented in the United States, Australia and Canada hardly constituted a ringing endorsement of workfare.

The DWP concluded: "There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers.

"Subsidised ('transitional') job schemes that pay a wage can be more effective in raising employment levels than 'work for benefit' programmes.

"Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high."

The DWP evidence continued to stack up against workfare even after the Tories and Lib Dems came to office in 2010.

In 2012, the National Institute of Economic and Social Research (NIESR) reviewed the DWP's impact assessment into how its "mandatory work programme" was working. Former Cabinet Office chief economist and NIESR director Jonathan Portes wrote: "Whatever your position on the morality of mandatory work programmes like these - the costs of the programme, direct and indirect, are likely to far exceed the benefits."

"At at time of austerity, it is very difficult to see the justification for spending millions of pounds on a programme which isn't working."

With unemployment widely forecast to not start falling until 2015, Osborne's latest announcement may chime with the mood of the delegates in the Manchester conference hall but it isn't backed up by the data. The awkward truth for the chancellor of the exchequer is that the government's own research admits workfare is the "least effective" method to get the long-term unemployed back into work.