Dear Chief Secretary to the Treasury,
I'm afraid to tell you there's no money left.
Signed, Liam Byrne

(Outgoing Labour Chief Secretary to the Treasury. May 2010)

Saturday, 29 May 2010

A new supermarket, FJF and the taxpayer.

Lauded by those who created it, this scheme was met with scepticism by some, including Faiza Shaheen in the Guardian who said
Without a clear focus, the £1bn fund will remove young people from the claimant count for 6 months only to see them return, more demoralised than ever.
The decision to close the scheme to new bids has been met with some opposition, including Richard Exell over at Liberal Conspiracy, who wrote
The Future Jobs Fund has shown what a Job Guarantee for all unemployed people could be like – it pays the minimum wage (and in some cases a bit more) for work that has to be of benefit to the community to get funding. FJF jobs are real jobs: they may only be temporary, but workers have the same employment rights – and duties – as any other workers.
So, let's look back at what FJF was supposed to do
The Future Jobs Fund is a fund of around £1 billion to support the creation of jobs for long term unemployed young people and others who face significant disadvantage in the labour market.

These will be aimed primarily at 18-24 year olds who have been out of work for a year.

If your organisation creates a new job, we will cover the cost of that post, at national minimum wage levels, for 25 hours a week over six months.
It does sound good, doesn't it. But ... there's always a 'but' somewhere or other and the Telegraph found it in July 2009
The list of new vacancies - most of which will be filled by 18-24 year olds - will include sports coaches, classroom assistants and social carers, department sources said last night.

However, in a move that attracted claims that public money is being wasted on "soft jobs", others include positions for forestry workers, loft laggers and child carers.

Jobs based around refurbishing council houses and in local recycling projects are also to be created.

"Soft jobs like these would be indulgent even in good economic times let alone in the current climate."
young adults who have been unemployed for a year will be forced to take one of the new jobs - or a place on another government training scheme - or have their benefits cut.
It sounds to Mrs R as if it was a bit like an extension of the work experience schools ensure their students do, but for a bit longer and with the benefit of a wage of some sort. Not a bad idea, on the whole, as long as those being pushed into work have some say over what they do. It wouldn't be very fair, for example, if they were made to do a job just because the job was there and it was something they had no interest in. And it wouldn't be right if they felt they were being used by an employer.

The scheme, on the surface at least, seemed to be offering a genuine opportunity to experience going to work, and all it entails, for a period of at least six months - and for it to be something useful to the individual as well as the local community. But, no point discussing it really, because it's in the past isn't it?

And that's why you're probably wondering what this post is about. You're probably wondering why Mrs Rigby has bothered to write about a scheme that's being dismantled. We know the coalition government has decided that no further bids will be accepted, although existing commitments will be honoured?

Well, it's because Mrs R read this in today's Telegraph. It's about a brand new, soon to be opened, 'co-operative supermarket' in London, which is to be the subject of a television documentary.

The article explains how this new supermarket is to be staffed entirely by volunteers who, in return for paying £25 to join the club and working hard, will be allowed to claim a 10% discount on anything they buy and benefit from member's only 'artificially low prices', such as "£1.85 to ordinary shoppers: £1 to members, loaf of bread".

Anyhow, the owner of the new shop needed 500 people to join, pay their £25 subscriptions, and commit to working one four-hour shift each month. So far there are only 110 names on his list, which isn't enough.

He isn't, however, in the least worried about trying to run a commercial business that relies on non-existent volunteers or volunteers who might forget to turn up, because
He is allowing for a 30 per cent no-show from volunteers, and intends to plug the gap with 18-24 year olds on the Future Jobs Fund.
Errrm ...?

And that, you see, is what left Mrs Rigby scratching her head, because it seems to her that this is either against the principle of the FJF concept or it's against the principle of the volunteer-run co-operative supermarket.

You see, Mrs R can't get her head round the business plan. She can understand how the idea of the supermarket is praised because, except for management, it's to be staffed by volunteers and run as a volunteers' co-operative. Members of the co-operative will choose what goes onto the shelves, although if their choices are too whacky (or uncommercial) they can be overruled by management. Then, if there aren't enough volunteers the owner of the co-operative plans (planned?) to plug the gaps by 'employing' young people who were to be paid by the taxpayer, via FJF. Either that or he's expecting these young people to do the same as all the rest, and be volunteers.

The owner goes on to explain why he hasn't managed to recruit enough volunteers.
"People keep on saying 'I can't spare the time' and 'What's in it for me?'," he says. "The minute they ask 'What's in it for me,' you know there is no point explaining the point."
So, Mrs R wondered what might be "in it" for anybody, anybody at all - including herself and the rest of the Rigby family. Selfish, isn't she?

According to the figures quoted in the article (and, initially, blithely ignoring that pesky 30% quoted - because there aren't enough volunteers) let's look at the figures. The business owner needs 500 volunteers, each working 4 hours a month. This makes 24,000 hours worth of volunteer staff over a year (12(500x4)=24,000) - which ends up at about 16.5 hours a day over 363 days - but up to the time the article was written has only 4,800 hours worth of volunteers ( (100 volunteers x 4 hours)x12 ). The shortfall is around 19,200 hours, significantly more than the 30% quoted, which could to be staffed, and funded, by the taxpayer via FJF.

Minimum wage for 18-21 yrs = £4.83 per hour.
It would cost £92,736 to employ FJF-funded staff aged 18-21 for 19,200 hours

Minimum wage for workers aged 22 years and older = £5.80 per hour
It would cost £111,360 to employ staff age 22 years or older for 19,200 hours.

But that's being silly and alarmist, so let's go back to the 30% shortfall that was mentioned earlier. 30% of the total 24,000 hours is 7,200 hours. Wages for FJF at an average of £5.31 = £38,268 - which is a whole lot less scary.

It could be how much the taxpayer would be paying to staff the nice new co-operative supermarket with 18-24 year olds, and it could be money the owner of the business never planned to spend on staff wages, because they planned for all their staff to be volunteers who would each pay £25 each to join the club and then work four hours a month and get cheaper food. The paid employees would be state funded via FJF.

So Mrs R wonders if this 'co-operative' was actually going to be 'state run', or not? You see, to her unbusinesslike eye (and she knows she's repeating herself) it would seem that, apart from management, the plan was that any 'temporary permanent' staff (i.e. not volunteers who only work 4 hours a month) were to be sourced from the pool of unemployed young people targetted by FJF, and whose minimum wage wages are paid by the taxpayer. And, you know, somehow that doesn't seem altogether right, so Mrs R is sure she's got the wrong idea - unless, of course, as a taxpayer she could turn up, fill a basket with food and demand a discount.

The idea of FJF was that long term unemployed young people and others who face significant disadvantage in the labour market would be employed, possibly even compulsorily employed for at least six months. There isn't anything, at least not at first glance, that says these 18-24 year-olds could be forced to be unpaid volunteers instead of earning money, and there isn't a suggestion that they should be used to provide temporary but full time, semi-permanent, staff for a permanent business, which would then be funded by the public purse.

Or was that bit hidden somewhere amongst the pages and pages of small print rules and regulations?

And maybe that is one of the reasons why FJF had to go.


JuliaM said...

"...for work that has to be of benefit to the community to get funding."

Now, there's a can of worms, if ever I saw oner. Who decides what's 'of benefit' to the community, I wonder?

I know one thing. It won't be the community!

Mrs Rigby said...


And what could be more 'community minded' these days than something run by volunteers - who end up with a loaf of bread for £1 when the supermarkets are selling it for significantly less.