TODAY the Government's back-to-work scheme is in chaos – ill thought through, poorly organised, implemented with bitterness and a poor understanding of the unemployed, and now declared illegal.

It is the flagship that sank. The only potential positive in the whole sorry affair that began in the aisles of Poundland and ended in the Appeal Court in London yesterday is that it will hopefully lead to a profound rethink of a blighted policy.

Cait Reilly, a graduate from Birmingham, and Jamieson Wilson, a former HGV driver from Nottingham, had gone to the court claiming it was unlawful to force them to work for free under pain of losing their Jobseeker's Allowance. The Appeal Court agreed and yesterday Ms Reilly, who was forced to work at Poundland, quite rightly celebrated her victory.

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It is important, however, to state what the court ruling is – and what it is not. It is certainly not a moral condemnation of the Government's policy, or a ruling that it cannot make the unemployed work for nothing to gain so-called work experience; it is a technical ruling that the Government did not obey the letter of its own regulations, which leaves open the possibility that the Government will simply rewrite the regulations to allow the back-to-work schemes to go ahead.

There are some signs this is what the Government intends to do No-one is denying, even Ms Reilly's supporters, that work experience can help the unemployed make themselves more employable, but what almost everyone objects to is the unsustainable assumption that the unemployed can be made to work for free. In Ms Reilly's case, it was clear that the fortnight at Poundland stacking shelves and mopping floors did nothing to help her get a job – the only beneficiary of the scheme appeared to Poundland, which got labour cost-free.

It is significant that in the wake of Ms Reilly's case, many high-street names took flight from the scheme, correctly concerned that the public would be appalled at its use of what was seen as forced labour.

What is especially worrying is the long-term consequences. The Coalition Government states that the aim is to increase the chances of the unemployed getting a job and therefore reduce the unemployment rate. In fact, the scheme is likely to achieve exactly the opposite. Why would Poundland, or any like-minded business, take on a paid member of staff when it can recruit workers for nothing? When that happens, the back-to-work scheme becomes one that keeps many out of work.

The Government must rethink the entire idea. There is unquestionably a major challenge to tackle in entrenched unemployment, particularly among the young, but the back-to-work scheme is not the way to do it. Pressure should be applied to the jobless – not least to reassure taxpayers that the welfare budget is being prudently spent – but a back-to-work scheme based on the fatuous idea that the jobs are out there but the unemployed are just too lazy to do them is not the answer.