The Work Programme destroyed a job for every £4600 it spent

Not a paragon of efficiency.

The government is now trying to spin the Work Programme figures, as expected, by focusing on the initiative's "cost effectiveness". The BBC's Nick Robinson, for instance, writes:

Ministers claim that they are meeting their "off benefit targets" and that they are saving money too. The cost of every job secured under their Work Programme is, they say, just over £2,000 compared with a cost of almost £7,500 under Labour's [Flexible] New Deal because the contractors are only paid 60% of their fee once someone is in a sustainable job: ie for six months.

It's certainly the case that Labour's programmes were more expensive than the coalition's replacements. But what this spin demonstrates is a serious failure to control for background noise. The Work Programme is, so far, worse than nothing at ensuring "job outcomes" – that is, people in unsubsidised work six months after they leave the programme. In the first fourteen months, 3.5 per cent of participants achieved job outcomes, but for people not on the programme, 5 per cent were expected to get jobs, according to Labour's shadow minister Liam Byrne.

(The news shouldn't be hugely surprising – one very effective way to get a job is to spend all day every day applying for jobs. Any training programme has to overcome that hurdle.)

Some quick back of the envelope maths, here. The full data is simply not available, but if ministers are saying that the Work Programme cost £2000 per job, and we know that there have been 32,310 job outcomes, then presumably they are claiming a budget to date of £65m.

Given that 5 per cent background rate, we can expect that if the Work Programme had never been instituted, there would have been 46,000 jobs in the normal process: 14,000 more.

In other words, the Work Programme did not cost £2000 per job. Instead, for every £4,600 it spent, it destroyed one participant's chance of employment.

Updated: The effect of the work programme was on the 14,000 job difference, and so the effect is one job destroyed for every £4,600, not for every £1,400. 3.5 per cent is the result for the first fourteen months, not the first year. Clarified the source of the 5 per cent figure.

Men at work. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

John Major's double warning for Theresa May

The former Tory Prime Minister broke his silence with a very loud rebuke. 

A month after the Prime Minister stood in Chatham House to set out plans for free trading, independent Britain, her predecessor John Major took the floor to puncture what he called "cheap rhetoric".

Standing to attention like a weather forecaster, the former Tory Prime Minister warned of political gales ahead that could break up the union, rattle Brexit negotiations and rot the bonds of trust between politicians and the public even further.

Major said that as he had been on the losing side of the referendum, he had kept silent since June:

“This evening I don't wish to argue that the European Union is perfect, plainly it isn't. Nor do I deny the economy has been more tranquil than expected since the decision to leave was taken. 

“But I do observe that we haven't yet left the European Union. And I watch with growing concern  that the British people have been led to expect a future that seems to be unreal and over-optimistic.”

A seasoned EU negotiator himself, he warned that achieving a trade deal within two years after triggering Article 50 was highly unlikely. Meanwhile, in foreign policy, a UK that abandoned the EU would have to become more dependent on an unpalatable Trumpian United States.

Like Tony Blair, another previous Prime Minister turned Brexit commentator, Major reminded the current occupant of No.10 that 48 per cent of the country voted Remain, and that opinion might “evolve” as the reality of Brexit became clear.

Unlike Blair, he did not call for a second referendum, stressing instead the role of Parliament. But neither did he rule it out.

That was the first warning. 

But it may be Major's second warning that turns out to be the most prescient. Major praised Theresa May's social policy, which he likened to his dream of a “classless society”. He focused his ire instead on those Brexiteers whose promises “are inflated beyond any reasonable expectation of delivery”. 

The Prime Minister understood this, he claimed, but at some point in the Brexit negotiations she will have to confront those who wish for total disengagement from Europe.

“Although today they be allies of the Prime Minister, the risk is tomorrow they may not,” he warned.

For these Brexiteers, the outcome of the Article 50 negotiations did not matter, he suggested, because they were already ideologically committed to an uncompromising version of free trade:

“Some of the most committed Brexit supporters wish to have a clean break and trade only under World Trade Organisation rules. This would include tariffs on goods with nothing to help services. This would not be a panacea for the UK  - it would be the worst possible outcome. 

“But to those who wish to see us go back to a deregulated low cost enterprise economy, it is an attractive option, and wholly consistent with their philosophy.”

There was, he argued, a choice to be made about the foundations of the economic model: “We cannot move to a radical enterprise economy without moving away from a welfare state. 

“Such a direction of policy, once understood by the public, would never command support.”

Major's view of Brexit seems to be a slow-motion car crash, but one where zealous free marketeers like Daniel Hannan are screaming “faster, faster”, on speaker phone. At the end of the day, it is the mainstream Tory party that will bear the brunt of the collision. 

Asked at the end of his speech whether he, like Margaret Thatcher during his premiership, was being a backseat driver, he cracked a smile. 

“I would have been very happy for Margaret to make one speech every eight months,” he said. As for today? No doubt Theresa May will be pleased to hear he is planning another speech on Scotland soon. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.