Who’s Really Getting Rich From the Benefits System?

Despite claims that welfare spending is ‘out of control’, the Government is handing out billions of pounds to a private sector actively involved in demolishing the welfare state.

One example: Atos, the global IT company, currently receives around £100m a year to carry out the Work Capability Assessment (WCA) on behalf of the Department for Work and Pensions. This crude computer-based assessment is used to determine eligibility for sickness benefits. The system has proved to be a brutal and expensive farce, with hundreds of thousands of sick and disabled people being denied benefits and forced into the Job Seeker’s Allowance regime, to face workfare and benefit sanctions.

People with life-threatening and even terminal conditions have been found ‘fit for work’ by the company based on a test which ignores the opinions of general practitioners in favour of a crude “tick box” approach. Only a tiny proportion are deemed genuinely unfit for work and placed in the ‘support group’ that entitles them to sickness benefits.  Most people who face the process either have their sickness benefits cut completely, or are placed in the Work Related Activity Group, which means that their sickness benefits are restricted to one per year.

An increasing number of suicides have been directly linked to the gruelling and relentless claims process. Even those found unable to work are often recalled for further assessments, and the British Medical Association recently voted to demand an immediate end to the WCA. The entire process is further discredited by the fact that 40% of appeals against WCA decisions are successful.

Despite the shambles, the government is planning to extend the same flawed model of assessment to everybody on Disability Living Allowance, which is to be replaced by the so-called Personal Independence Payment. The goal is to reduce disability benefits by 20% after the introduction of the new system. Atos have already been announced as a preferred bidder to carry out the assessments.

It’s not just Atos raking in staggering sums under the cover of welfare reform. The Government’s flagship Work Programme, aimed at cutting long-term unemployment, is set to cost a whopping £5 billion. The Work Programme is run by a host of Welfare to Work companies, including the fraud-ridden A4e (“Action for Employment”) and the national joke that is G4S, which just made headlines with a massive Olympics security blunder. These companies are paid a flat fee whenever anyone signs up to the programme and then receive another payment, which could be as high as £16,000, if someone takes a job.

Unemployed, sick or disabled claimants all face having benefits sanctioned or stopped if they fail to carry out ‘mandated activity’ as part of the Work Programme. Unemployed claimants have been sent to work in global companies such as Holiday Inn and Pizza Hut without pay. Other workfare schemes have seen thousands sent to work without pay at charities like the British Heart Foundation, or companies like Tesco and McDonald’s.

Recent figures suggest that the scheme is under-performing miserably. Only 25% of claimants on the programme are coming off benefits (but not necessarily into work) for a period of thirteen weeks. This may well be less than the percentage expected if people were expected to find jobs under their own steam.

By contrast, the private sector clearly benefits from the programme. The government has shelled out over £500 million to Work Programme providers so far, while those who are forced into the programme often remain without pay and benefits. The Secretary of State for Work and Pensions, Iain Duncan Smith, is also handing £2 billion to IT companies to develop Universal Credit, the new all-encompassing benefit regime. It is already behind schedule and over-budget, and it probably won’t work.

Welfare reform appears to be good business for everybody except welfare recipients. But ultimately, we will all suffer. The welfare state is good value for the vast majority of the population who would otherwise be forced to spend small fortunes on income protection and disability insurance schemes. Only those rich enough to withstand personal disasters will benefit from a reduction in welfare spending. Welfare reform is not about getting Britain working – there are no jobs to be doled out. The erosion of the welfare state is simply one more mechanism to transfer money from the poor to the rich.

By Johnny Void – (@johnnyvoid)