Victory claimed as GMB rejects workfare

What was a union's logo doing on a report recommending the privatisation of the employment and benefit service? Tony Greenstein reports

It began with a public meeting to launch a new Public and Commercial Services union pamphlet, Welfare - an alternative vision.[1] During the course of his speech last week in Brighton, PCS general secretary Mark Serwotka let it slip that an unnamed trade union had co-authored a report with a company looking to privatise the rest of the employment and benefit service - known as Job Centre Plus - and had specifically praised the US workfare company, America Works.

In response to questions from the floor, Mark revealed that it was the GMB which was the union in question. I think most of us were taken aback that any union, however rightwing, would collaborate with those who were poised to slit the throats of the public sector and even more so, given that many, if not the majority, of GMB members were employed in the public sector.

I immediately penned an open letter to GMB general secretary Paul Kenny,[2] which, among other things, called on him to resign. In the course of a somewhat heated correspondence, it became apparent that Paul Kenny had not read the report in question, something which he confirmed to Brighton GMB shop steward Holly Smith: “I had not read or seen the document until this all came to light and I have tried to ensure that the GMB position is explained to all who seek clarification.”

The report, ‘The road to work and opportunity in the 21st century’, was authored by four academics at Portsmouth University, including two criminologists. It transpired that the organisation which had commissioned the report, Kennedy Scott, was one of the many private parasites hoping to take a bite out of the welfare state. It had stuck the GMB’s logo onto its report, which was sponsored by accountancy group PKF.

Questions remain, of course, as to what were the circumstances in which the GMB came to have any relationship with this group, but that is for GMB members themselves to ascertain. The key thing is that whatever relationship there may have been has been blown out of the water. The report itself was launched at a House of Lords reception, at which GMB official spokespersons appear to have been present.

It proposes: “The government should recognise that best practice is for contractors to have a presence in job centres”, and talks 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 explains that “Redundancy can be a ‘once in a lifetime’ opportunity to start again” in the course of arguing that the higher end of the jobseeker’s market should be privatised first: “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.” Quite.

What, however, should have rung alarm bells, in whichever official was responsible, was the sentence, “Another idea the government should consider is encouraging welfare-to-work providers to have a presence in Job Centres.” Which, of course, makes sense for the private providers, but it would not take long before the squatters took over the tenancy. The Report informs us: “It is important to take account of the more generous benefits system (and the consequential greater difficulty in getting claimants back to work).” The obvious implication being that benefits therefore should therefore be lowered (it goes without saying that raising wages runs contrary to all notions of privatisation and the free market). The right calls this the ‘dependency culture.’

The report argues: “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.” Of course, what is best for the unemployed is not even mentioned. We are politely informed that “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 five years.” Well, that is one way of describing savage cuts to the disabled, massive cuts in housing benefits, the means-testing of child benefits, etc.[3]

At the same time as I was corresponding with Paul Kenny on behalf of Brighton and Hove Unemployed Workers Centre, Holly Smith was also writing, in somewhat more measured language. She said she was “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?”

Under the proposals carried in the report, employers would ‘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’! “Here’s how it works: America on Demand, a staffing company that is a subsidiary of America Works, places jobseekers in temporary positions. The employer has no obligations to hire at the conclusion of the subsidised wage period and has little or no risk during the period of subsidised employment because the staffing company is the employer of record. All of the paperwork involved in the programme is performed by the staffing company. The employer may terminate the arrangement at any time.”

In other words, the workers have no rights whatsoever and we have what is an agency worker system, in which the legal employer is the agency rather than the end user.

Persistence pays

But, whatever the origins of the GMB’s links with Kennedy Scott, when faced with the anger of his own members, the GMB general secretary made it clear that the union is opposed to any privatisation of the benefit or employment services. He stated: “The report you refer to was not ours, nor did we endorse it or support the type of comments quoted. I have written to Kennedy Scott making it clear we do not support private companies in these services, nor do we support ‘welfare to work’ or their views. I have made my views clear about anyone using our logo or implying our support for ‘welfare to work’.”

Paul Kenny’s explanation of how the union logo came to be on the report was that “the GMB had sponsored research from Portsmouth Uni, which we did to show the current system of payment by revolving door results is a complete sham”. He emphasised: “The GMB and myself are 100% opposed to workfare and the privatisation of any public service, including employment services.”

Kenny flatly denied that the GMB had “some sort of deal or partnership” with Kennedy Scott: “The union has by bitter experience seen the impact of private sector firms on all walks of public service provision. The Remploy database claims on how they have helped many thousands of disabled people into mainstream jobs is highly dubious. Placing people into charity shops or collecting trolleys at supermarkets is not what everyone wants to do. The PCS has our full support and that has been made clear to them. The GMB does not support ‘welfare to work’, nor will it.”

There are a number of conclusions to be drawn. The first is that the rot started under New Labour, when unions supported New Deal and the idea of private providers doing the work of the Job Centre and benefit staff and penalising claimants through sanctions. Having become accustomed to the role of private parasites like Atos Origin and A4E, it was not a big step for unions to arrange their own tie-ups with these groups.

There is no doubt in my mind that the GMB, or some of its officials, knew more about this report than they were letting on. Equally I have no doubt that, once the matter had been aired in public and seen the light of day, the GMB, notwithstanding its support for New Labour, was left with no choice but to dissociate itself from the document. Ironically the only person left supporting it was Andy Newman on Socialist Unity![4]

At the PCS meeting I spoke from the floor after the intervention from Colin Hampton of the TUC’s Consultative Committee and the Unemployed Centres Combine. Both these groups have presided over the demise of unemployed centres in Britain - down from 250 in the 1980s to about 30 now. Their ‘strategy’, in so far as one can call it that, was to doff their caps and act as lapdogs for the TUC bureaucracy. In return they got kicked in the teeth, as the TUC adopted the rhetoric and language of New Labour and its privateers.

Brighton Unemployed Centre, as one of the few independent centres in Britain, was not beholden to anyone and was able to therefore politically challenge the third largest union in Britain to make it clear where they stood. There is no doubt in my mind and those of claimants who have contacted us that we won a significant victory by not going through the ‘normal channels’.

But there is another lesson: only through the organised working class will the unemployed find their own voice.


  1. www.pcs.org.uk/en/campaigns/welfare-reform/index.cfm
  2. See azvsas.blogspot.com/2011/05/paul-kenny-judas-of-gmb.html
  3. The report can be read at www.pkf.co.uk/web/pkf.nsf/D13546DB143A24CA8025788B004F11EE/$file/Welfare+to+Work+report.pdf
  4. www.socialistunity.com/?p=8158