Work Programme providers plead poverty

Don't hate the small charity players, hate the large corporate game.

The Guardian has a slightly strange write-up of a piece of research around the government's flagship Work Programme, which is aimed at getting long-term unemployed people back into work (although the initial statistics imply it is less than efficient at doing so). The programme is structured in a "black box" manner; providers are entitled to, within reason, offer whichever schemes they think will work best to participants, and are paid by result.

But, Patrick Butler writes:

Welfare firms are involved in widespread "gaming" of the Work Programme, with the most vulnerable jobseekers often ignored because they are too costly to help, according to new research into how the government's flagship employment initiative is working in practice.
Providers privately admit they are focusing resources on the "easy customers" who are more likely to generate a fee, and sidelining jobless clients who require more time and investment to become ready for work, a process known as "creaming and parking," the study says.
It concludes that the quality of services offered to jobseekers is being undermined because the design of the Work Programme, in which companies are not paid until customers have been in work for two years, creates such huge financial stresses that many providers have little option but to cut corners.

The last paragraph is not strictly true. Providers are paid periodically throughout the two years that participants are said to be active. They receive a referral fee when an unemployed person arrives on their books, and then further payments when they find that person work, and periodically while that person is in work up to the two year deadline, when they are deemed to be back in stable employment.

The most obvious way of gaming that system is indeed relatively frequent: taking the referral fee for a new "customer", and then proceeding to ignore them entirely. Since there is not a huge amount of variation in the fees depending on how difficult it might be to find work, that usually results in people who are scarred from the effects of long-term unemployment being taken into the programme and left languishing while their referral fees are used to subsidise training for more easy-to-help participants.

That wheeze is likely to be short lived, for a couple of reasons. The first is that it won't result in many people actually getting work, and so the workfare provider's overall statistics will look terrible. If the government has a modicum of competency, that will be taken into account when the next contracts go out.

Competency, of course, is not guaranteed, but luckily the referral fees were only ever intended to be short term. They are important to getting the scheme going, but the intention is that the training for one cohort of jobseekers should be paid for, not with the referral fees, but with the profit from the previous cohort. That way, the system is true payment by results: if you don't find someone a job, you don't get anything.

The gaming Butler describes is a different sort. The black-box model the Programme runs on allows providers to subcontract work; and that seems to be where the trouble is starting:

The study cites a small private-sector provider which complained that big corporate providers, known as "primes", would keep "job-ready" customers for themselves while passing on more difficult cases to subcontractors. "It's not being PC but I'll just say it as it is … you tend to get left with the rubbish; people who aren't going to get a job … If the [prime] thought they could get them a job, they wouldn't [refer them to] someone else to get a job."

That doesn't seem to be symptomatic of anything other than bad business on the part of the small private-sector provider. There's nothing making them subcontract with the big corporate providers. Presumably they thought they could make a profit. The fact that they can't on the terms they'd agreed just means they should draw up a better contract.

Just as we can hope the government will take performance into account when offering the next set of Work Programme contracts, the best situation for the subcontractors is to stop taking work from corporate providers who offer them bad terms. That is, after all, how capitalism works.

Not that it has to be that way. Not all of the workfare providers view their job as purely extracting profit from a badly designed system, and at least one major one largely foreswears the possibility of boosting income by gaming it. Unsurprisingly, it is not one of the providers backed by private equity.

The Work Programme is frequently poorly designed, and many — but not every — provider is out to milk it for all it's worth. But the problem with it isn't that there is isn't enough money floating in the system.

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.

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The economics of outrage: Why you haven't seen the end of Katie Hopkins

Her distasteful tweet may have cost her a job at LBC, but this isn't the last we've seen of Britain's biggest troll. 

Another atrocity, other surge of grief and fear, and there like clockwork was the UK’s biggest troll. Hours after the explosion at the Manchester Arena that killed 22 mostly young and female concert goers, Katie Hopkins weighed in with a very on-brand tweet calling for a “final solution” to the complex issue of terrorism.

She quickly deleted it, replacing the offending phrase with the words “true solution”, but did not tone down the essentially fascist message. Few thought it had been an innocent mistake on the part of someone unaware of the historical connotations of those two words.  And no matter how many urged their fellow web users not to give Hopkins the attention she craved, it still sparked angry tweets, condemnatory news articles and even reports to the police.

Hopkins has lost her presenting job at LBC radio, but she is yet to lose her column at Mail Online, and it’s quite likely she won’t.

Mail Online and its print counterpart The Daily Mail have regularly shown they are prepared to go down the deliberately divisive path Hopkins was signposting. But even if the site's managing editor Martin Clarke was secretly a liberal sandal-wearer, there are also very good economic reasons for Mail Online to stick with her. The extreme and outrageous is great at gaining attention, and attention is what makes money for Mail Online.

It is ironic that Hopkins’s career was initially helped by TV’s attempts to provide balance. Producers could rely on her to provide a counterweight to even the most committed and rational bleeding-heart liberal.

As Patrick Smith, a former media specialist who is currently a senior reporter at BuzzFeed News points out: “It’s very difficult for producers who are legally bound to be balanced, they will sometimes literally have lawyers in the room.”

“That in a way is why some people who are skirting very close or beyond the bounds of taste and decency get on air.”

But while TV may have made Hopkins, it is online where her extreme views perform best.  As digital publishers have learned, the best way to get the shares, clicks and page views that make them money is to provoke an emotional response. And there are few things as good at provoking an emotional response as extreme and outrageous political views.

And in many ways it doesn’t matter whether that response is negative or positive. Those who complain about what Hopkins says are also the ones who draw attention to it – many will read what she writes in order to know exactly why they should hate her.

Of course using outrageous views as a sales tactic is not confined to the web – The Daily Mail prints columns by Sarah Vine for a reason - but the risks of pushing the boundaries of taste and decency are greater in a linear, analogue world. Cancelling a newspaper subscription or changing radio station is a simpler and often longer-lasting act than pledging to never click on a tempting link on Twitter or Facebook. LBC may have had far more to lose from sticking with Hopkins than Mail Online does, and much less to gain. Someone prepared to say what Hopkins says will not be out of work for long. 

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