Benefit Cap: 'a clear incentive to work'?

The benefit cap is providing a clear incentive to work, according to new research released by the Department for Work and Pensions today. However opponents say welfare reforms have damaged society and have not produced savings promised by the government.

The Westminster government says it has long suspected that the benefit cap was having a positive impact on people’s lives, compelling them to find work, and that the publications ‘now show this is undoubtedly the case’.

The benefit cap was introduced as part of the government’s long-term economic planso that people on out-of-work benefits do not receive more than the average working family earns.

The research shows that:

those who would be impacted by the cap are 41% more likely to go into work than a similar group who fall just below the cap’s level, but this trend didn’t exist before the cap was in place – indeed those with higher weekly benefit used to be less likely to move into work
before the benefit cap fewer than 300 of the highest claiming families got over £9 million in benefits every year – the cap is preventing this and saving millions of pounds a year
38% of those capped said they were doing more to find work, a third were submitting more applications and 1 in 5 went to more interviews
where households said they intended to seek work because of the cap in February 2014 (45%) by August the vast majority of them (85%) had done so – 2 in 5 (40%) of those who said they had looked for work because of the cap in February actually entered employment by August.

Work and Pensions Secretary Iain Duncan Smith said: “We know that the benefit cap has had a real impact in changing attitudes and behaviours, and now we have evidence showing that our welfare reforms are encouraging people into work.

“By putting an end to runaway benefit claims and introducing a system which guarantees you will always be better off in work, we are incentivising people find employment. Every month hundreds of people who have been affected by the cap are making the positive move into work – gaining the financial security and esteem that comes with a job and a pay packet.

“As part of our long-term economic plan, we’ll continue to support people to break free from welfare dependency so they can look forward to a better, more secure future for themselves and their families”.

The DWP cites London as a good example of the policy working.

‘In London where the highest number of people are subject to the benefit cap, scare stories claimed that people would be pushed out of the capital. In actuality, of those capped households living in inner London that moved, 84% continued to live in the central boroughs. In London there is also larger likelihood of capped households moving into work with those in scope for the cap being 70% more likely to go into work than their equivalents just below the cap’.

One interviewee in the research said: “It gave me the shock of my life. But it’s given me the kick I need. I can see what the gentleman was saying, why should we pay for your lifestyle. We should want to work. We shouldn’t sit on our backsides watching Jeremy Kyle. I genuinely do want to work.”

While the government may believe it is on the right track, it’s fair to say that not everyone is convinced that the controversial cap is working, however. Trades Unions, disability rights organisations, charities, anti-poverty campaign groups, churches and opposition political parties all continue to condemn the government’s ‘draconian’ welfare reforms. They point to record numbers of families using food banks as evidence that the welfare reforms are hurting poor families – both in work and on benefits.

There’s also doubt about how much – or how little – money is being saved by the welfare reforms. Today, the Institute for Fiscal Studies said savings from the cap were ‘small’. They say the cap affects about 27,000 families in the UK – less than 1% of working-age families who receive housing benefits – and saved around £100m a year.

More about the benefit cap

Introduced in April 2013 the benefit cap is set at a rate of no more than £500 a week for couples and families and £350 for single people – £500 a week is equivalent to a salary of £34,000 a year after tax.

Over 50,000 households have had their benefits capped since April 2013 and since then 23,900 are no longer impacted – 12,000 because they have found work or are no longer claiming Housing benefit at all.

Getting ready for work

‘We will not settle for a return to pre-recession levels of joblessness in young people’ – Roseanna Cunningham

Additional funding to help develop a world class vocational education system that supports joint working between employers, schools, and colleges is to be made available, the Scottish Government has announced. Local authorities will receive £6.5 million to help ensure young people are ready for work.

The announcement was made by Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham ahead of the publication of the Scottish Government’s new youth employment strategy, which will set out plans for implementing the recommendations of the report by the Commission for Developing Scotland’s Young Workforce.

Local authorities will share £6.5 million in 2014/15 to develop vocational and employment pathways open to all young people, strengthen links between schools and employers, and help vulnerable groups towards the labour market.

Ms Cunningham said: “Since the publication of the Commission’s report earlier this year, working closely with our partners, we have made significant progress in planning for a system of vocational education that is better equipped to help more young women and men into work.

“From a total £12 million made available this year, we have already invested £5.5 million in taking forward elements of the report. Pilots for foundation and advanced apprenticeships are already underway, and interest among employers in the new Investors in Young People accolade is steadily building. I will shortly outline in full how the Scottish Government will work with its partners to implement the report’s recommendations.

“Scotland’s local authorities are a central part of this process and I am delighted to be able to provide £6.5 million to maintain momentum at a local level, enabling schools to work more closely with colleges and employers. This approach will build on Curriculum for Excellence, benefiting children from early years onwards, developing their understanding of and skills for work and opening up high quality vocational pathways in their senior phase. That way, they will be better prepared to progress into sustained high quality employment.

“With this investment, pupils, parents and teachers will be supported to better understand the careers and routes open to young people and see opportunities in areas like science and engineering enhanced. Local authorities will also have a responsibility to ensure different routes are open to everyone, including those from vulnerable groups.

“We will not settle for a return to pre-recession levels of joblessness in young people, and the full extent of our ambition will become clear in the coming days with the publication of our new youth employment strategy.”

Edinburgh has already enjoyed some success in getting our young people into training or employment. At a ‘Celebrating Success’ reception held at the Scottish Parliament last week it was announced that 1252 young people have successfully progressed their careers though the Edinburgh Guarantee, a partnership between the city council, local employers and the voluntary sector.

Launched three years ago, The Edinburgh Guarantee is a vision that all sectors in the city will work together to ensure that every young person in Edinburgh will leave school with the choice of a job, training or further education opportunity available to them.

It seeks to increase the number of jobs, education, and training opportunities being made available to young people. Over 300 organisations have offered support so far, over 1600 opportunities have been identified including jobs, apprenticeships and placements and over 1,252 of those opportunities have been matched to young people.

The Edinburgh Guarantee has contributed £29m to Scotland’s economy since it ‘s launch, according to a report published by the city council last week. More than £17m of this has added value to Edinburgh’s economy.

This has been achieved by supporting businesses to match 1,252 young people into jobs, apprenticeships, internships or training. A further saving of £3.9m to the Department of Work and Pensions has been made from not having to pay Job Seekers allowance to 18-20 year olds.

A total of 757 jobs have been directly created for young people and as a knock on effect of this a further 575 other jobs have been created.

The findings were announced at a ‘Celebrating Success’ event, held at the Scottish Parliament, which brought together employers, potential employers and young people to celebrate and hear the news.

In addition to this, since 2009/10 the percentage of school leavers going into positive destinations has increased from 82.5 per cent to 91per cent in 2012/13. The most recent figures are due to be published at the end of this month.

Councillor Frank Ross, Convener of the Economy Committee, said: “This is a fantastic achievement and the figures announced today surpass all of our expectations. We must keep up this excellent work, however, as ensuring that Edinburgh’s young people have opportunities is vital for the economic success of our city.

“The year on year improvements that have been achieved since the inception of the Edinburgh Guarantee show that focused collaboration can make a real difference to many young lives. I am confident that with sustained investment and the support of our public, private and third sector partners these improvements will continue in future.”

Sandy Begbie, Chief Operations Officer, Standard Life: “We passionately believe in giving young people a chance to demonstrate their capabilities and helping them to achieve their potential. Since we agreed to take part in the Edinburgh Guarantee initiative we have welcomed over 90 interns into our business, all of whom have performed valuable roles within the organisation, while receiving The Living Wage.

“Over two-thirds have been successful in securing full-time employment with us, while the other third have moved on to further education or roles with other employers.

“The young people bring so much enthusiasm, energy and a refreshing new perspective to our business. We are delighted with the outcome, so much so we are now starting to roll out similar programmes to some of our other offices in the UK.”

One success story is seventeen year old Emily Lynch from South Queensferry, who completed a Modern Apprenticeship in Business Administration two weeks ago.

She wasn’t keen to stay on at school but wanted to continue in some form of training, so after hearing about Modern Apprenticeships Emily looked up MyJobScotland on the advice of her parents.

Emily said: “When I went on to the site, there were Modern Apprenticeships on offer for Business Administration in the City of Edinburgh Council.

“I looked up MyJobScotland because my mum knew about it and I remembered my guidance teacher talking about it when we had covered introduction to the workplace in school.

“Although I had been for interviews for Saturday jobs in the past, this was my first experience of a proper formal interview but we had done mock interviews in school so I tried to remember everything we had gone through then.

“Bits of the interview were good, I talked about myself, my interests, my hobbies, what I could bring to this job, so that was all fine. But to be quite honest, some of the questions they asked me about the department went right over my head!

“Let’s just say the phone call I made to my mum right after the interview finished wasn’t an optimistic one!

“The last week before the end of summer term, I get a phone call on the Tuesday offering me the Modern Apprentice Post! Suddenly everything changed, I wasn’t going to be at school anymore!

“The school were absolutely over the moon for me, and my guidance teacher sorted everything out and submitted my leavers form for me right away, so on Friday 28 June, I walked out of the school building, ready to start my professional career.

“Contracts had to be negotiated with the City of Edinburgh Council along with all the usual background checks and I started the post on 5 August last year as a Business Administration Modern Apprentice.

“Over the course of the year, I have learned and developed, been challenged, been frightened and been supported.

“Modern Apprenticeships are not just about the learning and curriculum, they are about every aspect of workplace skills. I had come from a school environment completely surrounded by people my own age, and suddenly, here I am in a team adapting to people of all different ages!

“Over the last year I have had fantastic opportunities to work in different areas of the Council.

“ I have been part of a number of different finance teams and gained a real insight into important functions including working with housing teams, putting through the charges for the repairs and maintenance bills on Council Houses, Assisting the Housing Finance Manager with work on the city wide 21st Century Homes project, which itself supports a number of Modern Apprentices. I have also worked on the Finance Administration of the City Car Club learned about the grant support of charitable organisations.

“I have also been asked on a number of project working groups, bringing a pair of fresh eyes to the table, someone who is fairly new to the Council and has a different outlook on things.

“One working group was BOLD, which is a team looking at creative ways to manage the Council budget. Another, looking at bringing more Modern Apprentices into the workplace.

“I can still hear my mum’s voice now saying “as long as there’s learning, as long as there’s training”. The saying ‘earn as you learn’ also comes to mind when I think about my experiences from the past year.

“I hope I will have the opportunity to apply for a permanent post within the City of Edinburgh Council. It is the organisation that gave me my opportunity, trained and supported me and somewhere I would like to stay. No one knows what the future holds; if that doesn’t happen, I am ready for the workplace. “

Apprenticeships at Scottish Parliament

Open Day Friday 21 November

An apprenticeship scheme to employ 20 young people in the Scottish Parliament over the next four years has been launched by the Presiding Officer Tricia Marwick.

Successful applicants will have the opportunity to work in a range of areas including Visitor Services, Events, Security, HR and IT.

An Open Day for young people interested in hearing more about the available opportunities will be held in the Parliament on 21 November.

Presiding Officer the Rt HonTricia Marwick MSP said: “The Scottish Parliament is an employer in its own right and we hope to lead by example. This apprenticeship scheme will provide opportunities for young people to build the skills to help them in their future careers. We will offer a range of positions to help build skills and to develop confidence.

“From today, through a dedicated website, young people aged between 16-24 can access details of these opportunities and next month we will be hosting an Open Day at which I hope to welcome young people from across Scotland.”

Clerk and Chief Executive of the Scottish Parliament Paul Grice said: “The Scottish Parliament is a vibrant and modern workplace and we want a workforce that reflects the diversity of Scotland’s population. We know the talent is out there – and we want to see it in the Parliament.

“This scheme provides a great opportunity for young people from all backgrounds to use their different abilities and to develop new skills to help build a successful career. We are always looking for people with initiative to inject different ideas and fresh thinking and, in return, we offer a great organisation where young people can begin their career.

“Young people have much to offer the Parliament and we have much to offer them – a supportive work environment and the first steps on a career path.”

The Parliament piloted a Modern Apprenticeship programme in 2012 and one of the successful applicants, Lynsey Mackay, backed the scheme. She said: “I wasn’t sure what to expect when I applied to the Parliament. But I quickly realised there were lots of different roles here and I was encouraged to experience them.

“Nearly two years on, I now have a vocational qualification and can compete for full-time posts within the Parliament – all thanks to the apprenticeship programme.”

Another apprentice, Tess Schmigylski, said: “Some people might assume that the Parliament is a very dry, boring place to work. Well I can safely say that I’ve enjoyed every minute of my time here – my colleagues have been very supportive and there is always so much going on.

“I feel far more confident now about my life and my career than when I first started and I would encourage any young person who is unsure what they want to do with their life, to find out more about the Parliament’s apprenticeship programme.”

Apprenticeship A4 Open Day poster – v4

Community Renewal at Millennium Centre

New Job Club at Muirhouse Millennium starts 27 August

Community Renewal will be present at this centre to assist anyone job seeking on Wednesday afternoons from midday to 2pm. The team will have an up to date list of job vacancies, and assist with CVs, covering letters ad offer general advice on job seeking. This will be a drop in activity with no appointments required.

We hope that our community will take advantage of this free service on their doorsteps, with the centre’s facilities -including our café – at their disposal.

Job Club at Muirhouse Millennium Community Centre starts on Wednesday 27 August.

James McGinty, Muirhouse Millennium Community Centre

Flexible working rights extended to all

‘Unfortunately the right to request is only the right to ask nicely’

From today (30 June 2014) every employee will have the right to request flexible working, giving a boost to workers and to business. Up until now, the right has only been available for carers or people who look after children but this has now been extended to all employees. However trades union leaders say it’s still too easy for employers to say ‘no’.

Today’s extension of the right to request the chance to work flexibly means more than 20 million employees can now benefit.

Flexible working helps people balance their work with responsibilities, keeping more people in long term employment and enabling companies to keep hold of top talent.

It is expected the new right will be of particular interest to older workers who want to work differently as they approach retirement and to young people entering the labour market who may want take up additional training or learning while they work.

As part of the right, employees can expect their request to be considered in a reasonable manner by employers – this will be much simpler than the previous process businesses had to undergo before making a decision.

Deputy Prime Minister Nick Clegg said: “Modern businesses know that flexible working boosts productivity and staff morale, and helps them keep their top talent so that they can grow. It’s about time we brought working practices bang up to date with the needs, and choices, of our modern families.

“Today is a crucial milestone in how we can help people balance their family life with work and caring responsibilities. And from next year, Shared Parental Leave will allow mums and dads to be able to choose how they care for their new-born in those first precious months.”

Business Minister Jo Swinson said: “Extending the right to request flexible working will help to create a cultural shift towards more modern, 21st century workplaces where working flexibly is the norm.”

Firms that embrace flexible working are more likely to attract and retain the best talent and reap the benefits of a more motivated workforce. Employees will benefit from being able to balance work with other commitments in their lives. It also helps drive a cultural shift where flexible working becomes the norm.”

Businesses have reported benefits to their firms in allowing staff to adopt more flexible working practices. This includes more than half reporting an improvement in their relationship with their employees and staff motivation, 40% reporting a boost in productivity and 38% seeing a drop in staff absence.

Acas (the Advisory, Conciliation and Arbitration Service) has published a short code of practice to help employers understand the extension to the right and how to process requests.

Acas Chair Brendan Barber said: “Our experience from working with thousands of employers is that flexible working is both good for business and employees.

“The new Code will help employers handle flexible working requests in a reasonable manner and fit their specific circumstances and procedures. We have also produced a good practice guide with practical examples to help employers and businesses consider some of the key issues that may pop up.”

Susannah Clements, Deputy Chief Executive at CIPD (Chartered Institute of Personnel andDevelopment), said: “The extension of the right to request flexible working to all employees is recognition of its growing importance to both employers and individuals. Employers increasingly recognise the strong business case for flexible working, including enhanced employee engagement and the attraction and retention of a more diverse workforce.

“Flexible working can also help meet the demand from an increasingly multi-generational workforce. Many younger workers are seeking greater work-life balance, while those looking after ageing parents or relatives are also requiring more flexibility to manage their caring responsibilities. At the same time, older workers are demanding more flexible routes into retirement, looking to work fewer hours rather than seeing retirement as a “full stop” to their working lives.

“The new accompanying code of practice, which encourages employers to deal with flexible working requests in a ‘reasonable manner’, will help assuage the concerns some employers have about managing flexible workers.”

The Government has forecast 182,000 requests per year, with the new right accounting for 81,000 of the new requests. Of these, it expects 144,000 to be granted – 64,000 of which would be employees taking advantage of the extension of the right.

Employers can still turn down a request for flexible working, however. Valid reasons for turning down a request are:

burden of additional costs
detrimental effect on ability to meet customer demand
inability to reorganise work among existing staff
inability to recruit additional staff
detrimental impact on quality
detrimental impact on performance
insufficiency of work during the periods the employee proposes to work
planned structural changes

So while welcoming the new right for helping make it easier for all employees to better balance their work and home lives, the TUC is concerned that it is still too easy for employers to say no to any requests they receive.

TUC General Secretary Frances O’Grady said: “It’s not just parents and carers who can benefit from flexible working. This sensible and modern approach to work is something that can improve the lives of everyone.

“Now, thanks to this long overdue change in the law, employees of all ages will be able to ask their boss to alter the way they work, regardless of whether they have dependents or caring responsibilities.

“If they have an employer who gets why flexible working makes sense, workers who want to take time out to train, volunteer in a local community project, or simply avoid travelling at rush hour will now be able to transform their lives.

“But those with old-fashioned bosses who expect all staff to stick to the same rigid hours day in day out and always be in the office won’t be so lucky. Employers will still find it all too easy to block any requests for greater flexibility.

“Unfortunately the right to request is only the right to ask nicely. There is nothing to stop employers saying no. Of course not everyone in every company or organisation is able to work flexibly – some requests will always need to be turned down. But without the right to challenge employers, many workers will continue to lose out.”

Acas has published new advice and guidance for employers to help them consider requests. The advice can be found on their website www.acas.org.uk/flexible

Thirty thousand respond to Zero Hours Contract consultation

Zero Hours Contracts: fair deal flexibility or a licence to exploit?

The Westminster government received more than 30,000 responses to their consultation on zero hours contracts which closed last week. Business Secretary Vince Cable acknowledged there has been ‘some abuse’ but said the controversial contracts do have a place in today’s labour market, but the TUC believes government proposals fail to tackle the exploitation of workers on zero hour contracts.

The Office for National Statistics estimates over 580,000 employers and individuals are currently using zero hours contracts, and that that number is on the increase.

The twelve week consultation was launched in December by Business Secretary Vince Cable, following a review of evidence on the extent of the use of zero hours contracts conducted last summer.

The consultation focused on two key issues that were raised in the summer review: exclusivity in employment contracts and lack of transparency for employees.

Commenting on the consultation, Business Secretary Vince Cable said: “It is clear that a growing number of people are using zero hours contracts. While for some they offer welcome flexibility to accommodate childcare or top up monthly earnings, for others it is clear that there has also been abuse around this type of employment, which can offer more limited employment rights and job security.

“We believe they can have a place in today’s labour market and are not proposing to ban them outright, but we also want to make sure that people are getting a fair deal. This is why we conducted research last summer (2013) and launched a consultation looking at the key concerns, such as exclusivity clauses and the availability of clear information.

“We don’t think that people should be tied exclusively to one employer if it unfairly stops them from boosting their income when they are not getting enough work to earn a living. We also want to give employees and employers more guidance and advice on their rights and responsibilities around these types of employment contracts. The consultation received a high level of interest, with over 30,000 responses. We will publish our response to the consultation in due course.”

However government proposals to clamp down on the abuse of zero-hours contracts will fail to stem the widespread exploitation of workers, according to the Trades Union Congress (TUC). Responding to the government’s consultation, the TUC submission highlights how zero-hours workers are dogged by low pay, under-employment, and job and income insecurity.

Half of all zero-hours workers earn less than £15,000 a year (compared to 6 per cent of other employees) and two in five want to work more hours, according to recent research by the Chartered Institute of Personnel and Development (CIPD).

Three-quarters of zero-hours workers report that their hours change each week. These varying hours – and the unstable, irregular income they provide – make it hard for staff to organise childcare, pay monthly bills and plan ahead, says the TUC.

The TUC is concerned that zero-hours contracts allow employers to evade basic employment rights such as maternity and paternity leave and redundancy pay, while some companies pressurise workers to remain available on the off-chance they will be offered work. None of the proposals contained in the government’s consultation deal with any of these problems, warns the TUC.

The TUC instead wants the government to introduce compensation, including travel costs, where shifts for zero-hours workers are cancelled at short notice, as well as written contracts with guaranteed hours where a zero-hours worker does regular shifts. The TUC would also like to see the government simplify employment law so that all workers get the same basic employment rights.

The submission supports the government’s proposal to ban exclusivity clauses – which prevent people from working for anyone else – in employment contracts, though this recommendation on its own will fail to meet the government’s stated aim of ending the abuse of zero-hours contracts.

TUC General Secretary Frances O’Grady said: “The growth of zero-hours contracts, along with other forms of precarious employment, is a key reason why working people have seen their living standards worsen significantly in recent years. These contracts are commonly associated with poverty pay, poor terms and conditions, and leave staff vulnerable to exploitation from bad bosses.

“We welcomed the government’s belated acknowledgement last year that abuse of zero-hours contracts needs to be stopped. It’s disappointing therefore that they’ve failed to back this up with any meaningful policies to tackle exploitation.

“If the government wants to be on the side of hard-working people it needs to put proper policies in place to curb exploitative working practices, even if this means ruffling the feathers of a few business lobbyists.”

The government’s response to the consultation findings will be published ‘in due course’.

Letter: Making it work

Dear Editor

I wrote to NEN in 2010:

‘The struggle of the labour movement, trade unions and others has always been to ease the burden of work and to improve wages and conditions of work. It has been a long struggle, great sacrifices being made but always holding out the hope that, at long last, the nation will be able to look after the youngest – giving them all the care and opportunity needed, and giving the oldest respect, dignity and the care they need. This is how it should be and the nation will be judged accordingly.

‘Now despite all the evidence of the correctness of that struggle there are serious moves to undo the good. Raising the retirement age from 65 – to 68 initially, then later on to 70 – is a thoroughly backward move. I believe the majority of people, having worked for an average of fifty years, welcome relief from the daily grind. There should not, of course, be a compulsory retiring age if an individual wishes to continue working.’

It is now November 2013 and:

there is a situation where there are over one million young people out of work, and older people are told they will have to work for years beyond 65. This is creating new problems for the labour movement and the trade unions to solve: how can we tackle these problems and obtain the best results?

As a counter-proposal to raising the retirement age, I suggest an individual option lowering the retiring age to 62. The skills, knowledge and experience of those taking the option can be used for the benefit of their communities by agreeing to do a maximum of nine hours paid work for those three years.

No doubt this example will raise many questions and problems, but organisations representing working people must discuss what options there are and which are beneficial to all.

The scheme would release jobs for young people.
The skills and experience of the older person would be available to the community
The older person would have some work satisfaction, respect and dignity and a better quality of life
There would be a steady replacement of people taking part for the benefit of the community.

Comments and ideas needed!

Tony Delahoy

Silverknowes Gardens