Wednesday, October 27, 2010

Benefit Cuts: a case study (Part One)

The results of the Autumn Spending Review, announced last week, included major cuts to welfare benefits as part of the government’s deficit reduction policy. An estimated 500,000 public sector jobs are also being cut, and a similar number in the private sector are expected to follow. With the inevitable fall in the tax take, how is that going to add up?

I went to Rochdale to find out. A New Labour welfare-to-work programme is still running in the town, staffed by a dedicated team at the national charity Groundwork, funded by the local authority via a sub-contract with Serco. Under the current system, after 72 weeks of unemployment, claimants of Job Seekers Allowance (JSA) must undertake 4 weeks of ‘Mandatory Work Related Activity’. This may take the form of an unpaid work placement, and can also include employability training. On the day I visited, a group was nearing the end of one such course. What was striking was just how employable some of them were: they included an articulate IT support worker with 10 years experience, and a clearly capable shop assistant made redundant when the local branch of M&S closed down.

According to Lisa Brown, who manages Groundwork’s Middleton office, all that is available in the Rochdale and Oldham area are ‘entry level’ (minimum wage) jobs in warehousing, private care and retailing. But in the massive Stakehill Industrial Estate, built close to a major motorway network, half the warehouses stand empty. Many of the national brands (Woolworths, B&Q and others) that had used them as their distribution centres for the north-west have either gone bankrupt or moved elsewhere. Employability isn’t much use if there aren’t any jobs. The only thing this adds up to is a worsening of the living standards of claimants already struggling at or below the poverty line. More pictures here.

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