Zero hours contracts – £1bn+ pa added benefit cost to public purse?

One million working people are on zero hours contracts and here is how this must cost the state at least £1 bn extra each year.

1. A zero hours contract means work varies from week to week which necessitates a reassessment of welfare and housing benefits and tax credits every week for 1m workers.

2. If each reassessment costs a mere £20 in admin time to complete then this is a £20m per week public purse cost of these necessitated weekly assessments and reassessments

3. £20m per week is over £1 BILLION per year

If the cost of each assessment / reassessment is £40 per week it is £2 BILLION per year.

Admin Time? – Zero hours worker needs to present earnings details to DWP (welfare benefit) to HMRC (tax credits) and to local council (housing benefit) who have to make a fresh assessment then notify the zero hours worker.  Time involvement anyone of all of these public sector decisions?

When Freedom of Information requests were made available a few years ago the then Labour government said the cost should not exceed £600 per case and based that on public purse admin time of £27 per hour.  So if we say it’s now £30 per hour then £20 cost of assessment / reassessment equates to about 40 minutes.  Can the above be done in 40 minutes each week?  Unlikely!

Now imagine the coalition panacea known as Universal Credit which aims to bring together all of this admin time with one application and one decision from one department – the same basic UC claim process that takes 45 minutes at least to complete online by the claimant.  The same UC all bells and whistles system that even if it was not struck by huge delays is capable of producing 5,000 decisions every day if it purrs like a Lamborghini and has no problems.

Hang on 1 million zero hour reassessments per week is 140,000 or so per day for this £3.1bn folly of an IT system that has the capacity to decide on 5,000 claims per day we are told.

Yes the same all bells and whistles UC IT system that will need to deal with over 5 million housing benefit claims alone per year and HB is one part of one claim – and each HB claim has to be reviewed every year yet the UC IT system as 5000 cases per day purring like the Lamborghini can only deal with 1.82m full cases per year (365 days x 5000).

Baldrick put more pre-thought into his cunning plans than this inept coalition you say?

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10 thoughts on “Zero hours contracts – £1bn+ pa added benefit cost to public purse?

  1. Reblogged this on Grannie's Last Mix and commented:
    So who are the real benefit scroungers? It couldn’t be that democracy is an illusion, could it, nurtured by our politicians with corporate vested interests all over the place? Politicians who are either total bumbling idiots or know exactly what they’re up to….?

  2. this is all part of the conservatives plan to realign the way uk does business with the rest of the world ie slave labour with the undertaking of withdrawing the human rights of the sick and disabled and all who are unemployed

    in other words over the coming years along with the usa we will be aligning ourself with communist china albeit we will be dropping the word communism as the USA have done already

  3. Except Housing Benefit Departments refuse to do weekly recalculations even if your wages change every week. They ask for 5 weekly wage slips or two monthly wage slips and will only recalculate every 5 weeks or every 2 months. Even if I earn £200 one week and £50 the next – they refuse to recalculate an instead ask for 5 weekly wage slips and then work out an average wage.

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