Lesley Riddoch: Doling out jobs instead of benefits is false economy

IN ANOTHER age – when the Sun and Daily Mail backed New Labour – such an announcement would cause ripples of delight across the front pages of Middle England.

But if today's Labour manifesto does indeed announce that Jobseeker's Allowance claimants must take state-funded jobs or lose benefits, who exactly will be cheering?

It's agreed that healthy, trained or educated people sitting inert and isolated at home create a burden on society – and on themselves. It's also agreed that some people cynically work the benefits systems instead of the jobs market.

Hide Ad
Hide Ad

Those two truths may be enough to swing a few votes. For everyone else some bigger, inconvenient truths loom larger.

According to the latest figures, there are 205,000 people unemployed in Scotland. Add in the self-employed, family firms and small companies where income has all but collapsed but no-one is yet signing on, the current cohort of graduates and school-leavers about to join dole queues this summer, and those currently shifting from long-term incapacity benefits to JSA and you have perhaps double that number.

Chasing how many job vacancies?

Labour says its benefits clampdown won't happen until a new raft of state-funded jobs and work placements have been created. Again, that sounds fine. Except that work performed by volunteers and apprentices is work not performed by full-time staff.

Don't get me wrong. About half of my own working life is spent on voluntary projects that create social goods. And that mix may become a rewarding new model for middle-aged, middle-class professionals whose former careers have disappeared.

But an economy based on work placements, volunteers and trainees is not a viable one.

If job creation is simply robbing Peter to pay Paul – or more correctly "Efficiency saving Peter's post to temporarily employ Paul" (and to "employ" Pauline, Patrick and Purvi on related work experience) – we are heading nowhere fast.

Just as companies churned in the "good old days" – poaching staff from rival firms instead of finding fresh talent – so churning existing jobs will only give the appearance of fresh economic activity.

If we had full employment then imposing sanctions on the workless might be sensible. Reducing benefits in a chronically over-supplied labour market is irrational. Even cruel.

Hide Ad
Hide Ad

Governments of all political hues could have tackled our structural problems of long-term unemployment and low productivity but encouraged migrant labour to fill the gaps instead.

So it's likely work placements for the unemployed will just drive down wages and conditions for other workers, maybe saving millions in the short term but making not an iota of difference to general employability.

This is not just an attack on Labour – the party has simply attracted attention by being the first to "crack" and reveal the absence of any radical new thinking on skills and jobs.

David Cameron wants every young person over 16 to do community work; the SNP wants short-term offenders to work in the community, not sit in jail; the Lib Dems want young JSA claimants to be back on paid training programmes after just 90 days.

All completely laudable – and all adding to the swelling ranks of people chasing the same static pool of work.

What about doubling up – Labour's good idea of offering apprentices to every small firm? Unfortunately, in Scotland no-one is matching up the kids, places, companies and arrangements. In England there's one central website for would-be apprentices to view current opportunities; here it's a free-for-all. In any case, small firms need contracts first and apprentices second.

And here's where the politicians could actually help.

Procurement policy means local small firms – the kind that take on apprentices and pump-prime by sub-contracting and spending locally – get carved out every time. The Scottish Government offers contracts that span so many different skills and trades that excellent, smaller, specialist Scottish firms cannot win. Several companies I know working in PR, communications and distribution have given up on the un-productive and time-consuming task of compliance with a Scottish Government process where it seems that only large multi-department London-based consultancies succeed.

If that's a roundabout way to encourage small Scottish firms to talk to one another, it doesn't seem to be working. Breaking contracts down into manageable, sectoral, skills-based chunks would be far better.

Hide Ad
Hide Ad

It's a terrible irony. The same councils that encourage sustainability and local business insist on applying best-value rules, which means sourcing cheaper goods from distant firms.

All parties want a shift towards green jobs, but according to a green employment specialist, they're going the wrong way about it. Tom Hopkinson warned in The Scotsman (Scotland "lacks skills" to fill 60,000 new green energy jobs, 10 April) that new green jobs will go to non-Scots unless a massive green skilling exercise begins now.

The easiest way to start the ball rolling is to remove the brakes.

Citizens will take a green future seriously when government does. Carbon-heavy contracts with distant suppliers must stop. The best-value requirement for procurement should be amended or scrapped and government – local, quango and central – should embrace a policy of localism. A Fife Diet for Enterprise.

For those furth of the Kingdom, the Fife Diet requires all food to be sourced from within a radius of 30km. New government catering contracts could easily require the same. Of course there will be legal obstacles – that's why the government employs lawyers.

This is also a form of "churn" – jobs at "national" businesses will go, while jobs in smaller local firms will be created or made more secure. And without breaking up our over-large, remote and ineffective council structure to create community-sized, tax-raising municipal local government, the social economies of small scale will not be fully realised.

I'll return to that dilemma next week.

But without shortening the distance between people and power, top down tinkering by Labour, Tory, Westminster or Holyrood governments will not create prosperity, let alone new jobs.