Don

I was quite interested in your post and the idea of trying to get young people into a job and giving them an opportunity to carve out a real future is a good one. I have work that needs to be done to help expand my start up business and I cannot yet afford the cost of a new full time employee, so I got quite excited and investigated further.

The guidance indicates that this scheme is aimed at public and “third sector” organisations and that “partnership” schemes are preferred. It is stated that the jobs created must help the community and that schemes to create fewer than 30 jobs are unlikely to be successful (so good luck taking on your two).

It seems clear that what we will get are gangs of youngsters employed by the council (probably in partnership with some parasitical training company owned by a pal of the Technical Services Director) to sweep leaves or paint fences for six months before being returned to the dole. They are not real jobs so there is no prospect of there being continuing employment.

How does this help the kids involved?

Meanwhile my job, providing a real opportunity for a young person to add value to a young and vibrant company and deploy their skills in the pursuit of creating some wealth, will remain unfilled for the moment.

This scheme illustrates one of the most unedifying sides of state socialism and the sooner it is binned the better. Purnell belongs in a politburo somewhere.

Really your last line is all that counts, whatever they say, they do the Neoliberal thing. So yes this will mean real jobs will be lost to Future Funded minimum wage people and there will be coercion. Surely Purnell’s entire ministerial history is enough evidence he is a careerist shit who will say anything to get power then attack the poorest, least powerful people to benefit capital. Why believe words when deeds are on record to indicate their true intent? Is he that charming? (can’t see it myself)
I seem to remember a similar scheme (YTS or equivalent) existed under the Tories under a different name and all it meant was lots of low paid jobs for coerced workers who mysteriously found their work was no longer needed when the subsidy stopped, then bingo a new face was in that job the next week and the subsidy cycle repeated. It is in effect a govt subsidy for private profit (unless these jobs also are by law in profit sharing concerns or…nationalised industries at living wages).

Hi pagar,

We’re subcontracting – so our local authority tendered to create 50-ish jobs and then we applied to them, hence how we can create 2 jobs rather than minimum of 30.

If you want to e-mail me any more info about what you’d be interested in doing (donpaskini AT liberalconspiracy DOT org) then I can make some enquiries if that would be helpful – what you would be looking for is exactly what FJF should be about.

Rick – I am the opposite of Purnell’s biggest fan, but this particular initiative is one which does seem to have its merits, albeit with the flaws which I mentioned and you identified.

Interesting that comment 1 says the scheme is state socialism and comment 2 says that it is neoliberalism!

Yes it’s like Fox News, Fair & Balanced…

I know a few people who have found work with local authorities and while their jobs aren’t exactly spectacular they are hardly the same as the old YTS schemes which amounted to little more than bending over a desk so someone could use your arse as a pencil sharpener.

Work Trials, although unpaid, have no element of compulsion so I don’t see why these should.

It wouldn’t be difficult to monitor employers who take on FSF staff only to sack them after 6 months to replace them with new FSF staff: you could transfer Compliance ( i.e. Fraud) Officers to look into employers exploiting the system rather than have them following single mothers with newborn children around to make sure their boyfriend isn’t staying over a couple of night a week.

Sorry, FJF not FSF.

The mandatory part of it isn’t really that you will be forced to take a job. It’s more that the FJF programmes are good – and if you don’t make efforts to get training or a job through it (and there really shouldn’t be too many who can’t) then you will go back to fND.

I agree in principle though that forcing would only serve to remove that opportunity from someone who wants it while actually moving the forced jobseeker backwards.

Pagar @ 1

“Meanwhile my job, providing a real opportunity for a young person to add value to a young and vibrant company and deploy their skills in the pursuit of creating some wealth, will remain unfilled for the moment.”

Quite right too. Why should the State subsidise the private sector to take on staff when there is every likelihood that many of these companies would have to employ these people anyway? Surely, as a Libertarian, you see the sense in that? I am already subsidising some of the most profitable companies on the planet, so providing these same companies with a steady source of ‘free’ labour I find pretty despicable. What are we going to do? Sack people then apply to the Government to provide ‘training opportunities’ to the same people?

“They don’t go into any detail about this, but a related concern would be what they envisage if the job doesn’t work out – would people lose their entitlement to benefits or face other sanctions?”

Well, this is a Purnell idea, so I’m guessing that people would lose their benefits, yes.

I mean, that’s what gets him out of bed in the morning – shafting poor people.

“It’s politically correct dogma”

No, actually it isn’t. It’s directly from the Richard Layard playbook and it’s very good economics indeed.

Take the Phillips Curve. Yes, I know Friedman demonstrated that there’s no reliable trade off over time between inflation rates and unemployment because of inflationary expectations. But Layard went on to point out that you can shift the curve as well as move along it.

Further: yes, lots of unemployed people will tend to keep wage inflation low: there’s lots of competitors for every job opening. However, lots of long term unemployed people doesn’t have this effect: for people become entirely detatched from the work force. So you can end up with millions of long term unemployed but still be having wage inflation (and thus general inflation and all that comes from that). So you get the worst of all worlds. People rotting on the dole and inflation (remember stagflation anyone?).

The answer is thus to force (yes, force, at threat of benefits cuts) the long term unemployed to become reattatched to the labour force. You do this by either training or creating jobs for them to do and insisting that they take them. We’ve now shifted the Phillips Curve and we can have more growth at a lower level of inflation and a lower total unemployment level. For we’ve moved those entirely detatched from the labour force into those attatched to it.

Note please, this isn’t my idea nor some ghastly right wing plot. This is the essence of Richard Layard’s work from the 80s and the justification behind things like Welfare to Work and so on.

It’s a very good idea indeed: straight and proper supply side economics. Reform the supply side of the economy for the better and the economy will get better.

Jim @ 8

I was not asking the state to subsidise my employee but clearly, if such subsidy is available, I would be foolish to ignore it, particularly as I currently get nothing from the state apart from demands to pay Council Tax, VAT and Corporation Tax.

Actually that’s not quite true. I did get a £500 grant for pretending to go through a DTI training programme for new business set ups. Sad to report that more the half of the people in my “start up cluster” were setting up yet more training companies ready to partner with yet more public sector initiatives.

I’m not attaching blame, but can’t you see what is happening here? Everyone involved in these processes are just sucking at the teat of public funding and nobody is generating any wealth. As we are about to find out in the next few years, that is an unsustainable model.

My point here, however, was not about what was good for my business but about what was good for the young unemployed person. Put yourself in their position.

1) You have the opportunity to do some kind of community work for six months, work created for you by the local council, after which time you are almost certain to be back on JSA.

2) You have the opportunity to get in on the ground floor of an ambitious high tech company which, if successful, will provide you with a solid career path and considerable potential prosperity.

Which would you choose?

Except that the way this scheme has been devised, you will never have that choice.

I wouldn’t be surprised if official unemployment climbs to over 3 million next year, as the government (Lab or Con) strives to shift 400,000 from IB to JSA, and public spending cuts start resonating (both in lay offs and double-dip recession).

Job vacancies during the last quarter stood at 434,000.

Meanwhile, Purnell’s boasting about creating 100,000 temporary jobs.

Let’s be honest, unless this Fund is seriously expanded, it’s barely going to make a dent in our massive labour surplus.

Purnell’s just rearranging deck chairs on the Titanic.

As others have said, this scheme sounds very 1980s sharing some of the attributes of YTS. Given that this is something that you know about Don, perhaps a few words on how it differs from previous schemes?

Whilst we are reinventing past interventions, shouldn’t we be looking at providing startup funds and giving tax breaks to the unemployed who want to go into business. From what I remember (anecdote warning), it was the only intervention that had credibility at the time. A family friend used government funds to set up her market garden business, and 25 years later it is still pottering along in modest fashion. That’s clearly an exception, because most small businesses have a short life span, but whatever. Government is already paying benefits to the unemployed, so government can afford to back riskier startups than banks.

Pagar @ 11

“as I currently get nothing from the state”

What? Nothing? You don’t benefit from living and trading in a relatively stable Country, with a relatively stable currency and (still) stable economy? You don’t gain anything from trading in an environment where the vast majority of people are reasonably well educated and have good communications, roads, health etc? I wonder how you would fare in a Country without a State?

Don’t get me wrong, I am not knocking you for seeking access to cheap labour, per se. I would argue that your prime motivation is profit, rather than any benefit to the community, but again there is nothing wrong with that, either. Profit is a perfectly valid pursuit, any positive side effects are to be valued.

If you are attacking these schemes for what they are trying to achieve then we are on the same side. Part time work for a six month period (in any sector) is at best, limited value to the claimant and at worst, a complete expensive waste of cash as well as being counter productive.

What this Country needs is an increase in full time valuable work, not more schemes or make work. I agree that there is work that is needed to be done. However, I would rather we employed people full time, with the necessary skills and at decent wages, than a cheap, badly thought out scheme.

The problem with such ‘training schemes’ is they are deeply flawed for many reason.

Employers and employees are extremely adept at spotting schemes with no value. I was brought up in an area of Scotland where the now defunct ‘silicon glen’ was born (different thread). Twenty five years ago when these electronic start ups were moving into the area, most long term unemployed male’s CV in the area had an entry for ‘dry stane dyking’. Not because the electronic industry were keen for such skills, not because the then Tory Government spotted that there was going to be a resurgence in farming, but because the guy who did it could ‘train’ dozens of people cheaply and without expensive offices.

We also had people who had a CV with twenty fives years of working down a pit and 13 weeks learning to type. Many of these people stubbornly ‘refused’ to work to work in the electronics industry, despite the ‘extensive’ training they had.

Further investigation revealed that the electronic industry had little need for ex miners who had copied a spreadsheet into ‘lotus’ or a form letter into wordstar or need a dry stane dyke, but actually wanted young people who could solder! The unemployed ex heavy industry people stayed unemployed, by and large, despite the huge investment in skills training.

No scheme will address the main problem. The huge surplus of labour means there is no incentive for employers to look at the least employable people in the workforce. These people are largely unemployable compared to the rest of the job market.

It is only when we see labour shortages in the market that we will see employers looking at these people.

Charlieman @ 14

“That’s clearly an exception, because most small businesses have a short life span”

Your little anecdote points out the rather piecemeal approach to finding work for the unemployed. Of course your friend’s success is to be welcomed and well done to keep in business for twenty five years. However, I wonder if their success means that another garden centre that had none of the start up help went bust or just suffered a cut in profits? Did the scheme increase the number of people employed or did it shift some into the market at the direct expensive of others?

No doubt the agency counted it as a success, but did it take the nett effect into account?

@14 Jim

The small businesses that were created by subsidy in the 1980s were very small. One entrepreneur and a few co-workers. I agree that there would have been competition effects on other businesses; I suspect minor effects; it is bloody hard to make people change brands.

What is the difference between a small business business founded on £5,000 of government money and one founded on £5,000 of bankers’ money?

charlieman @ 16

“What is the difference between a small business business founded on £5,000 of government money and one founded on £5,000 of bankers’ money?”

My best guess is that the bank is in it purely for profit and have a vested interest in that companies success and will examine a balance sheet and business plan with a fine tooth comb, Government are trying to reduce unemployment and measure ’success’ on a different scale.