CAUGHT! Homebase uses Workfare to cut pay costs

3:14 pm - April 5th 2013

by Sunny Hundal    

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An employee from Homebase in Haringey leaked this flyer to the Pride’s Purge blog.

It couldn’t be any more clearer about how employers are using the government’s Workfare to replace paid jobs.

Iain Duncan Smith maintains that the schemes help people into good jobs. We know that they are simply used by employees to get free labour, while people have to work full-time hours simply to get Job Seekers Allowance.

In other words the government is subsidising private employers to cut their bills, in the hope they’ll get better jobs later. Except, as a report found, it didn’t even do that.

As Pride’s Purge adds, ‘it looks like Homebase have accidentally let the cat out of the bag.’

Indeed. Over to you Iain Duncan Smith.

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Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments

Recall this news item in mid February?

Iain Duncan Smith: shelf-stacking as important as a degree
Ex-Tory leader hits out at graduates ‘too good’ to stack shelves, refusing to back down after ‘workfare’ schemes ruled unlawful

But then Iain Duncan Smith doesn’t have a degree and retired from the army with the rank of Major.

1 But it doesn’t say that anywhere, does it?

2 If it didn’t benefit the employer, they wouldn’t do it, would they?


Stuart (#2)

If it didn’t benefit the employer, they wouldn’t do it, would they?

I don’t think anyone is suggesting that workfare doesn’t benefit the employer.

The point is rather that it benefits neither the state nor the employee (extant or ‘workfare’)

In fact, it harms the state economy – as this flyer shows – by removing jobs from the market, at the continued expense of the taxpayer.

The question isn’t “what benefit does it provide for the employer?”

It’s What benefit does it provide for us?

What return is the taxpayer seeing on this massive investment?

I posted something on Homebase Facebook page on Monday about this, they pulled my post v quickly and sent me a reply.

Homebase is committed to recruiting the best people to serve its customers at all times. The company has not signed up to the workfare programme, but, on occasions, works with local organisations to help unemployed people into the workplace. A number of unemployed people have recently joined our Haringey store through JobCentre Plus in a short, voluntary programme, to gain work experience. They are entirely under no obligation to participate, nor will non participation affect any benefits. Colleagues at this store also have not been impacted by this programme in any reduction of hours.

It might not have any payroll costs, but there is still a cost to the business in “hiring” the workfare staff. They need to be mentored and trained and monitored. That requires staff that could be doing more productive work. So whilst the figures don’t appear on any accounts, they will appear in terms of staff being taken of customer facing roles or other roles to handle these untrained layabouts.

The rationale of many Conservatives is their enduring belief that unemployment is fundamentally attrributable to workshy sentiments – hence the unemployed must be compelled to work in order to continue to receive unemployment benefit.

Quite why workshy sentiments come and go in the business cycles we call recessions and why recessions tend to be internationally contagious remain eternal mysteries. Ignorance is strength.


As the retail industry has one of the largest take-ups of family credits, the tax-payer is probably subsidizing the majority of those staff who are not mentoring said layabouts. I don’t suppose that appears on any of their accounts either.

I’m disgusted to see this flyer, thanks for showing it. It seems now unemployed people are being used as servants, this really reminds me of 1930’s and even Victorian workhouse ethics regarding poor unemployed people, of which I include myself. The Conservatives are really laughing at us now.

*sigh* Another shop to boycott. Will it never end?

it doesnt benefit employers. in reality it
– cripples the consumer economy
– limits the ability to move from unemployment into paid work
– and rewards ineffective mismanagement

But think of the benefits for poor consumers from shopping at Poundland.

Looks like a blatant fake to me!

All Workfarce does, at the end of the day, is create more unemployment because greedy capitalistic companies will rather taken on free labour, than hire a person to work for a wage. This does not help reduce unemployment, quiet the opposite.

14. Barry, Ipswich

Yet another daft comment from someone who clearly doesn’t understand the labour market nor how businesses function.

Let’s take the flyer above…
To me it says: would 750 hours [ of free labour ] help your store.

It does not say: would 750 hours [ of free labour which would otherwise cost you 750 * minimum wage ] help your store.

The are necessary things to do around a store (or any business) that would justify a payment at the minimum wage. There are many unnecessary things to do around a store (or any business) that would not be economic to do at the minimum wage, hence they would not be done.

The principle behind the Workfare program is the same as the principle behind Labour’s compulsory jobs guarantee.

The idea behind Labour’s compulsory jobs guarantee is to use the taxes raised against bankers bonuses to create and subsidise jobs that would under normal circumstances not be necessary or economicly viable. This program leaves itself open to the same possibility of abuse as the Workfare program.

Sunny, what the economy needs is proper jobs, the product of which generates things that are of real use.

A wages policy, taxation and benefits system, that made it economically viable to generate the jobs to employ 100000 seamstresses making shirts, socks, suits etc would be more useful than either iof the job creation scheme discussed above.

This could be done by capping the minimum wage at £6 per hour, raising the tax and NI threashold for employees to £12,000 a year, and reducing the benefits system to such a level so that a job at £12,000 per annum was actually worth doing by someone who otherwise would be claiming benefits.

This notion of pushing up the value chain is not an option. This country, like every other country, has to compete against cheap labour costs in india, china and loads of other places. When politians realise that the only way to economic growth is the making of thing we actually use and consume then we have a way forward, and the daft job creation notions of both labour and the tories can be discarded.

15. Robin Levett

@Barry, Ipswich #14:

There are many unnecessary things to do around a store (or any business) that would not be economic to do at the minimum wage, hence they would not be done.

OK, let’s examine this proposition. Identify a few unnecessary tasks that would produce an economic benefit to the store, but not so as to justify payment of the minimum wage.

RL @ 15:

Filing? Cleaning? Meeting and greeting? Distributing flyers? And many one-off tasks?…To mention just a few….

Have you any commercial experience?

17. Robin Levett

@TONE #16:

Filing? Cleaning? Meeting and greeting? Distributing flyers? And many one-off tasks?…To mention just a few….

OK; let’s take filing. What happens if it’s not done?

18. Peter Gilkes

Nice one Tone. All those jobs not worthy of pay could be a nice little job for someone. Say, a Junior, getting to know what going to work regularly feels like, before going on to better things.

Have you any hold-up experience?

Ironically at the company where I work its only the cleaning out of that list that’s done at minimum wage (we get cleaners in, guess they’re on minimum wage), filing, meeting and greeting and distributing flyers are all jobs that get done by people earning well over the minimum wage. We’re only a small Ltd business too.

20. Robin Levett

@Cylux #19:

Indeed; and the point is that none of those jobs are either unnecessary, or not done because it’s uneconomic to do them.

Well, Homebase is lying in that case: I know for a fact that paid members of staff in that particular store have had their overtime cut.

22. Christine Beckett

Iain Duncan Smith a Major?

I don’t think he actually got above Lieutenant. There’s certainly no records I can find of him being promoted above that, and his star would have to be very high indeed for him to reach Major in the the 6 years he served.

A man with some very big questions to answer about his past……

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