Paul Kenny - the GMB and Workfare - Why Have You Signed Up to a Report with an American anti-Union Workfare Company?

The GMB's Endorsement of the Kennedy-Scott Report is an Attack on their Members and the Unemployed

Paul Kenny is the General Secretary of the GMB, a union which has traditionally been on the right-wing of the trade union movement. A largely manual union, it has only succeeded in retaining about 700,000 members through a series of mergers with small unions like the old Boilermakers Union. It has a series of regional officers who are not unlike the old barons of the T&GWU and its membership has little control over the Executive or unelected officers.

Historically however it was what one could call moderate right, in comparison with the far-right Electricians Union and the AUEW Engineering Union under Terry Duffy. Under Paul Kenny however that has changed. Kenny was put in position after losing an election, which was held to be rigged, to Kevin Curran. Kenny has twice been elected unopposed, latterly this year.

Kenny has now, in a glossy pamphlet produced with American Privatisation Company Kennedy Scott, accountancy firm PKF and Portsmouth University and 4 academics (including 2 criminologists – because being unemployed is now a crime) called for further privatisation of the job centres, more private involvement in cheap labour ‘welfare reform’ companies and given open support to workfare.

We call on the members of the GMB to sack its scab General Secretary Paul Kenny and all those on its Executive who played any part in the production of this Report. It is difficult to think of a comparable act of treachery by a trade union leader. One would have to go back to Jimmy Thomas of the NUR in the General Strike to provide a comparison.

A trade union leader who is actively complicit in attempts to demolish the welfare state and who encourages further privatisation of public services has clearly spent too long with New Labour ‘thinkers’ such as John Hutton, James Purnell and Frank Field. He has clearly forgotten, if in fact he ever remembered, that it was the bankers, the spivs and speculators – who have indeed received generous state support – who caused the present crisis. And it is the unemployed and disabled who are being made to pay the price for the follies of the rich. What we don’t expect is for trade union leaders to be complicit in an attack on the very notion of public service and to hold out the USA as some kind of model – a country where it is quite possible to be unemployed and starve, where 40 million have no medical cover, where the idea of the free market runs holds sway and where at the same time as massive personal wealth there is a huge amount of poverty. This is Kenny’s ideal.

Below is an open letter to Paul Kenny from Brighton Unemployed Centre followed by quotes from the Report that the GMB sponsored and a letter from a shop steward in the GMB in Brighton about the Report.

Saturday, 21 May 2011

Paul Kenny
General Secretary
GMB Trade Union
22/24 Worple Road
London
SW19 4DD
Fax to: 020 8944 6552

Dear Mr Kenny,

Two nights ago I attended a meeting to launch the Public & Civil Service Union’s new pamphlet ‘‘Welfare – An Alternative Vision’. Mark Serwortka, PCS General Secretary made mention of the fact that there was a trade union in Britain which had come out in favour of more privatisation of job centres in Britain and had even co-authored a pamphlet with one such pirate, the US Workfare company Kennedy Scott. It emerged that the union was the GMB.

Workfare is working for your dole, which is at the heart of the ‘Welfare Reform’ agenda. It originated in the Wisconsin W-2 program in 1997. As I am sure you will be aware, Wisconsin also ended recognition of public sector trade unions this year. I will leave it to you to work out the relationship between the two.

In 2001 GMB workers in Brighton occupied the waste depot in Hollingdean, Brighton. At that time the depot was run by the private company SITA. As a result of that occupation the service was taken back in-house by the Council. Brighton Unemployed Centre, as your national officer Gary Smith will confirm, gave total support to that occupation including loaning computer equipment and having activists stop scab vehicles from leaving a nearby depot and thus undermine the occupation. Perhaps you might like to explain why privatisation is wrong for the Waste Transfer & Disposal service but fine when it comes to running job centres?

If you want to know what the W-2 Welfare Reform programme means then the following is illustrative:

'W-2 truly ended the entitlement to assistance. Provision of cash grants is no longer based solely on income eligibility. Job readiness, rather than income, is the primary consideration for determining eligibility for cash assistance. Case managers can make a determination that an applicant is job ready, in which case the applicant will not receive cash assistance despite having low or no income.’

The Report you have co-sponsored, alongside PKF Accountancy Group and 4 academics from Portsmouth University, (including 2 criminologists!) argues for greater privatisation. The Report speaks of

‘the importance of outsourcing welfare to work provision to independent providers… The government should recognise that best practice is for contractors to have a presence in job centres’

‘the competitive tendering process, (the) DWP stressed its desire to contract delivery partners from the public, private and voluntary sectors.’

Who would have guessed that PCS and the civil service trade unions were unanimously opposed to CCT. The Report you signed up to informs us that redundancy can be a

‘once in a lifetime opportunity to start again. It is unlikely that the Jobcentre Plus will be able to provide suitable services for former professionals… conversely, a network is emerging which is based on voluntarism and social entrepreneurship.’

I won’t ask if you have officially become a signed up supporter of the Big Society but your support for ‘voluntarism’ and social enterprises, as some solution to unemployment, is indicative of your Tory philosophy and mentality.

In case you had forgotten, privatisation means lower wages and de-recognition of trade unions. Since Thatcherite privatisation, union membership has plummeted and that with the latest economic crisis (yes the bankers don’t get a mention in this report) it is the poor and working class who bear the brunt of restructuring capitalism (another word you don’t seem acquainted with). Yellow/business unionism is not the way out of this predicament, as the United States has amply demonstrated.

As with all PR documents with an academic veneer there is no mention of the less cuddly side of welfare to work, e.g. sanctions, i.e. starving people into work or the fact that workers who have paid national insurance all their life will be hounded the moment they are unemployed into accepting the first cheap labour job on offer.

The Report places great emphasis on America Starts in New York. Here is a description of what this success means:

‘Here's how it works: America on Demand, a staffing company that is a subsidiary of America Works, places job seekers in temporary positions. The employer has no obligations to hire at the conclusion of the subsidized wage period and has little or no risk during the period of subsidized employment because the staffing company is the employer of record. All of the paperwork involved in the program is performed by the staffing company. The employer may terminate the arrangement at any time.’

That a trade union, even a right-wing one like the GMB, should endorse and even encourage further privatisation of public services is an act of scabbing both on workers who have been made redundant and one’s own members.

These companies don’t create jobs they are parasites on the public purse, pure and simple. They get the state to subsidise low wages coupled with the employer being able to terminate the arrangement at any time. There are no employment rights because ‘the staffing company is the employer of record’ i.e. it is an agency employer.

If you have any decency you will resign forthwith and take your place on the Board of Directors of the companies you have given your support to. After all even Judas received his 30 pieces of silver and your entitlement should not be a penny less. If the trade union movement in Britain were to take your advice, it would become as marginalised and weak as US unions.

Yours sincerely,

Tony Greenstein
Secretary – Brighton Unemployed Centre

‘The government should recognise that best practice is for contractors to have a presence in job centres’
‘the Government should robustly monitor the sub-contracting market to ensure that competition is maximised’
The Report speaks of ‘improving the employability of the long-term unemployed group’ and

‘the importance of delivering welfare to work provision coming from the public, private and voluntary sectors’.

It speaks of ‘the importance of a more competitive Work Programme tendering process in the future.’

‘It is surely in the national interest that this happens (shorter periods of unemployment). The country is facing the biggest change to the welfare system in 50 years’
‘America has already had considerable experience of these initiatives and there is much to learn.’ It speaks of the ‘work and ethos of Kennedy Scott’ and quotes uncritically the Freud Report that advocated ‘(1) a tightening of conditionality for lone parents;... Significantly the DWP stressed a new personalised and responsive approach…’
‘In particular through the competitive tendering process, DWP stressed its desire to contract delivery partners from the public, private and voluntary sectors.’ But

‘Redundancy can be a ‘once in a lifetime opportunity to start again. It is unlikely that the Jobcentre Plus will be able to provide suitable services for former professionals… conversely, a network is emerging which is based on voluntarism and social entrepreneurship.’
‘Another idea the government should consider is encouraging welfare to work providers to have a presence in Job Centres.’
‘it is important to take account of the more generous benefits system (and the consequential greater difficulty in getting claimants back to work).’

In other words benefits too high and discourage work. Benefits therefore should therefore be lowered (because of course raising wages runs contrary to all notions of privatisation and the free market). The Right calls this the 'dependency culture.'

The Report speaks positively of ‘Outsourcing and contracting-out have a longer history with the 1988 and 1992 Local Government Acts requiring local authorities to competitively tender services such as street cleaning and refuse collection.’
as justification for introducing Kennedy Scott into existing programmes.

The Report speaks of ‘8 client groups ranging from jobseekers under the age of 25 to Employment and Support Allowance recipients who had formerly received Incapacity Benefit. Contractors will receive incentivised fees to deliver successful employment outcomes…. contractors will receive… thirteen four weekly sustainment payments of £215 to encourage in-work support and job retention.’

In short nearly £3,000 pounds which would have stayed with the DWP will be frittered away on parasites like KS whilst benefits are cut and wages lowered.

The Report speaks of a ‘full outsourced recruitment service’ and ‘The introduction of ‘Work Choice’ by the DWP is also to be welcomed as support for people with disabilities seeking employment,… '

There is of course no mention of cuts in disability benefits or the lack of real protection for the working disabled, i.e. it is easy to sack someone if they cannot perform the job. As CEO Cove argues:

‘Nothing spurs innovation like competition. Exposing the welfare-to-work industry to the vagaries of the market is the best thing not only for the taxpayer but for the industry’s clients, as well.’

And of course Kenny is happy for a special plug for KS, for which we will no doubt become an ‘adviser’ in the fullness of time. Included in its case studies is one Maria, a manager from KS ‘it’s possibly the most bizarre company that I’ve worked for… but it’s also an incredibly caring company…’ Very scientific!!

‘Unemployment has been rising and may rise even further if the private sector does not deliver on greater growth and more jobs.’ And being in polite company the Report doesn’t mention how it will deliver these jobs – by cutting public sector jobs and lowering wages and worsening conditions. And of course any attempt at insubordination will be dealt with in the American style, with the complicity of American-style unions like the GMB. Better left unsaid.

‘The country is facing the biggest change to the welfare system in 50 years and the new Work Programme will see up to 3.2 million people (6.3% of the adult population) go through its doors over the next 5 years.’
Well that’s one way of describing savage cuts to the disabled, massive cuts in housing benefits (which affect workers of course), means testing child benefit etc. Far better to describe it neutrally as ‘the biggest change’ as in ‘the accession of Hitler to power meant the biggest change in the situation of Jews in Germany’. No doubt others can improve on this ability to neutralise the political implications of any change.

If the GMB membership has any self-respect Paul Kenny will be given his marching orders and told that if he loves the private sector so much they can pay him.

Below is a letter from the President of Brighton & Hove Trades Union Council, Holly Smith, who is also a GMB Shop Steward, to members of her own branch:

‘As I am sure you are aware, the PCS trade union is currently holding their Congress in Brighton. I attended a meeting there yesterday at which they launched their new booklet ‘Welfare – An Alternative Vision’, an excellent straightforward and accessible booklet which sets out to debunk the myths around benefit claimants and reinforces why we should all be fighting to defend our welfare state.

Speakers at the meeting included Mark Serwotka, PCS General Secretary, and John McDonnell MP. They both spoke at length against the introduction of private providers into the welfare service, and were extremely angry about ‘a trade union’ that has come out in support of introducing private providers to work with the DWP, and the ‘welfare to work’ programmes. Eventually someone in the audience shouted out and asked who it was; I was appalled to hear it was the GMB.

I have spent this morning researching it.

In essence, the GMB has, through a report called ‘Welfare to Work in the 21st Century’ made recommendations that the DWP pilot a US Welfare-to-work programme developed by a company called America Works. The report has been authored by an accountancy firm called PKF (!). You can read the full report here:

Here are some choice selections from the report itself –
The report ‘reflects on the importance of outsourcing welfare to work provision to independent providers’

The report recommends ‘best practice is for contractors to have a presence in job centres’ And recommends ‘the Government should robustly monitor the sub-contracting market to ensure that competition is maximised’

I am incredulous that a trade union is actually recommending and encouraging a Tory Government to increase their free- marketeering! Why on earth are we encouraging the opening up of the public sector to private providers? Do we really believe that introducing a profit motive into the public sector ensures the best possible service??

I have been researching the scheme, and the companies involved, this morning. Here are some of my findings -

- The guy who set the company up, a Mr Cove, is described as ‘one of the nation's leading advocates for private solutions to welfare’

- Mr Cove ‘influences policy makers internationally in his belief that private-sector efforts must be tapped by government’. (taken from his own website).

- The company themselves state “work first was a better strategy to reduce welfare than education and training programs”.

- Candidates participate in up to four weeks of unpaid training, focusing on soft skills like ‘developing a positive attitude’

- Employers ‘try out’ each candidate for up to four months during which time they have no employee rights, and if they are found not to be suitable they are simply released!

At the launch of this report in the House of Lords, the GMB described it as ‘innovative’. How about ‘regressive’ or ‘oppressive’? In a statement Paul Kenny said “The GMB is looking at how best to support both our members who are facing redundancy as the public sector cuts bite and those suffering the scourge of long term unemployment. We welcome the idea of pilots across the country to evaluate how best to do this.”

Apart from the immense political and moral objections I have to opening up welfare provision to private providers, cheap labour, subsidising employers, the treatment of the workers who will be forced into these schemes, etc etc., then does the GMB not realise schemes such as this actually takes jobs away from other workers and serves as a mechanism for keeping wages down and profits up?? Why would a private company keep employing a unionised workforce who have fought for a decent salary and terms and conditions, when they could simply sack them all and rely on an army of cheap labour which they get extra subsidies for, who they can have on permanent rotation?

Of course the GMB should be advocating job creation and getting people into work – but absolutely not in this manner. Why not campaign for a massive house building program, that employs skilled labourers to create quality social housing to solve the massive housing crisis we have in this country? Why not push for creation of jobs in the civil service to tackle tax evasion? Why not push for manufacturing jobs in sustainable technologies? I could go on.

I had a meeting with the other shop stewards in my workplace this morning (who are copied into this email), to discuss this matter. We would like to know why on earth our trade union is actually advocating the further exploitation of the working class. We feel that this report is nothing but an opportunity for private providers to profit from exploiting workers, and is an attack on unemployed workers, an attack on workers in jobs, and essentially an attack on trade unionism and it’s core values.

I would like your advice as to how we progress this complaint further, and also to ask how we go about writing an emergency motion for this to be discussed at Congress.

Thank you. I look forward to hearing from you.

Holly Smith
Contracts Team & GMB Shop Steward
CityClean & CityParks
Brighton and Hove City Council
Hollingdean Depot

Further quotes:

'The current programs that involve tax credits and training to place welfare recipients and the unemployed in private sector jobs cost the state about $5.2 billion a year. But there is little to show for the expenditure. Labor Department programs that subsidize companies to train new workers are entangled in the red tape of government rules and regulations. The government is slow to pay the employers and companies have been wary of government coming in to audit books and review compliance.'

'Tax credits to encourage companies to hire also have been largely futile. There are two grave problems with tax credits. First, companies losing money do not need the credits to begin with. Second, the companies don't receive the subsidy until more than a year after the initial hire -- too late for business struggling in this economic climate.'

'But there is a program that has been effective. A $14 million subsidy program funded with federal stimulus dollars and managed by the state Office of Temporary and Disability Assistance has helped businesses keep people employed and actually created jobs. It might well be a model for tackling our seemingly intractable high unemployment.'

'Here's how it works: America on Demand, a staffing company that is a subsidiary of America Works, places job seekers in temporary positions. The employer has no obligations to hire at the conclusion of the subsidized wage period and has little or no risk during the period of subsidized employment because the staffing company is the employer of record. All of the paperwork involved in the program is performed by the staffing company. The employer may terminate the arrangement at any time.'

'The employer sees an offer to hire from the staffing company that is no different from an offer without a subsidy, except the net wage cost is lowered by the amount of the subsidy during the trial period. Companies have flocked to the program because of the streamlined process and because they do not have to wait for payment.'

'Only if the worker stays for 90 days in the job can the contractor receive the full reimbursement for its services from the state. This assures that the worker stands a good chance of being hired and staying in the job. In fact, in one program where more than 200 people have been placed, close to 100 percent have been hired permanently.'

'America Works also has on staff corporate representatives, otherwise known as case managers. Our Corporate Reps go out on the job sites and make sure that America Works’ clients are doing well on the job. If there is a problem with our clients, we will either fix the problem with the employer or we will send that company another qualified individual. Our Corporate Reps meet with our clients and, help them deal with any life problems they have that might prevent them from staying on the job – issues like day care, food stamps, work-appropriate clothing, housing, health insurance, and counseling, to name a few.'

Peter Cove

One other little item about Paul Kenny. When the TUC at its 2010 Conference sought to condemn Israel and the Histadrut for the attack on Gaza and the murder of 1,400 people, including 400+ children, Kenny sought to water the motion down substituting 'notes' for 'condemn'. Not surprisingly this scab is also a Zionist!