A scheme to help give unemployed people the skills to find a job, run by the General Workers’ Union, has cost the government €30 million but has only helped 44 participants move on to productive work.

This figure represents just 5% of the 839 long-term jobless persons who have been taken off the unemployment register since 2016 and moved into the training scheme.

The scheme is operated by the GWU’s Community Work Scheme Foundation under a five-year concession in return for ‘management fees’ that, according to a National Statistics Office report, amount to just under €1 million a year.

The purported aim of the scheme is to help people find alternative employment by giving them new skills. But according to the findings of an audit carried out by the NAO, it is not delivering results.

The NAO also found that while the scheme was originally intended to cater only for the long-term unemployed, hundreds more people have been added to its payroll, considerably boosting the management fees paid to the GWU foundation.

And Jobsplus, the government’s employment agency, does not have the tools to monitor what is going on at the scheme, the NAO has concluded.

The scheme was originally introduced in 2009 and was administered by the Employment and Training Corporation (ETC), which has since been superseded by Jobsplus. It was known as the Community Workers Scheme, providing a number of hours of training per week to participants, who received 75 per cent of the minimum wage.

At the time, participants were kept on the unemployment register.

However, in 2016, the government decided to ‘privatise’ the scheme and outsource its management to a private entity. A call for tenders was issued and won by the GWU foundation.

About 600 unemployed people were put on its books on a full-time basis while receiving a full minimum wage. These people were struck off the unemployment register and, for national statistics purposes, regarded as working in the private sector.

Participants reluctant to seek more gainful employment

The NAO audit, published a few days ago, found that no adequate training had been given to participants to help them move on to alternative employment. Instead, they have been performing minor jobs at schools, local councils and NGOs.

The audit found that only 44 of the original participants have so far left the scheme for alternative employment. At the same time, contrary to the stated intent, the number of unemployed placed into the scheme has ballooned by about 300, reaching 839 by the end of last year.

This has not only raised the cost of the scheme to taxpayers but has also considerably boosted the amounts in fees payable to the GWU.

According to the NAO, when it was introduced the scheme was costing taxpayers nearly €7 million but that figure has since doubled, reaching €14.5 million last year. It has so far cost €30 million.

At the time of the 2016 agreement, the foundation was being paid €980 per participant per month, from which minimum wage and NI contributions were deducted. That amount has more recently been raised to over €1,280 to go towards an increase in salary.

The government has never revealed exactly how much the foundation is making off the scheme.

However, the NAO has queried the management fees and their cost to government, as well as the lack of checks and balances. 

“Jobsplus is not reviewing the financial statements (of the GWU Foundation) for any significant and unusual transactions,” the office pointed out in its report.

“A case in point relates to the management charges payable of around €822,000 and €959,000 quoted within the 2016 and 2017 financial statements respectively,” it said.

“To date, Jobsplus has not enquired with the foundation as to what these amounts represent.”

The NAO said that based on its assumptions related to the productivity of its participants, the scheme may still be cost effective for the government, when considering the amount of unemployment benefits those on this scheme would be entitled to if jobless. However, Jobsplus needs to pull up its socks in its monitoring.

The NAO noted that the government lately decided to increase the salaries of those on the scheme by some €200 a month but this, in reality, works against the aim of the scheme.

“Such an increase does not incentivise participants to seek alternative employment, particularly within more productive sectors,” the NAO report says.

“Given the improved working conditions, the risk exists that the scheme becomes an end in itself as participants became increasingly reluctant to seek more gainful employment within more productive sectors.”