Emma Harrison CBE

A4e's owner, Emma Harrison, has been given a CBE in the New Year honours list. It's "For services to Unemployed People and to the Voluntary Sector." The Derby Telegraph expands on this a little. "In 1991, she founded A4e Ltd to deliver social change on behalf of the government. Managing £300m of government contracts, A4e now employs 1,500 staff in offices nationwide and Emma anticipates the organisation will more than double in size over the next two years. She was appointed as the chairman of regions of the NSPCC Full Stop Campaign and donated more than £1m to the charity."

Melanie Phillips on unemployment

Anyone interested in the issue of unemployment will want to listen to a Radio 4 programme at 8.00 pm next Monday and the following Monday. "Journalist Melanie Phillips embarks on a personal journey to explore what work means to some of the most vulnerable and socially-excluded people in Britain. Melanie is known for her uncompromising views on the 'workshy' beneficiaries of the welfare state but will her theories stand up in the face of the complex and difficult lives of the people she meets?" So says the BBC website. Phillips' "uncompromising views" are, in fact, increasingly common among those with no first-hand experience. "In this first programme," we read, "Melanie travels to the north-east of England to meet unemployed young people who are struggling to find their way into the labour market and a married couple who are desperate to move themselves into work and away from dependency." It will be interesting to see if there is any mention of New Deal and the various private companies involved. In episode 2 "Melanie spends time with cleaners and catering staff working on the minimum wage and asks what motivates them to work. Would Melanie's own assiduous work ethic survive night shifts, low pay and cleaning lavatories?" Good question, but I suspect the answer is yes.

Privatising your local council

Exciting times for the private sector. Essex County Council has privatised itself. Well, not quite. But it has "signed a pioneering deal with IBM worth up to £5.4 billion to manage and provide public services in a new wave of privatisation supported by David Cameron" (reports the Times). It's not disclosed whether any UK companies tendered for this massive contract; one would have expected the likes of Capita and Serco to be interested - perhaps even A4e - but it went to the US firm because it had done similar work in Canada. IBM's contract "will cover almost all the authority’s services, including schools management, social care, highways and libraries in stages." They will review existing contracts, and every service will be up for grabs. If things can be done cheapest in-house, fine. But inevitably loads of jobs will go altogether, and others will become "flexible" i.e. insecure and worse paid.

Expect much more of this if the Conservatives form the next government. And expect a feeding frenzy as the private companies seek their share of the spoils.

From Britain to Israel and back again

Readers may remember the controversy that surrounded A4e's venture into Israel. It's summarised here. But the UK government and A4e have long since distanced themselves from this controversy. The Foreign and Commonwealth Office's website UK in Israel carries a newsroom piece proclaiming that "A4E - improves people’s lives and delivers social change (14/12/2009)" As an advert for A4e, this is great stuff. And, of course, it's the job of the Foreign Office to promote British business interests abroad. But this is hardly what you'd call objective.

Back in Britain, there are more PR pieces masquerading as news items in local papers. The Stourbridge News carries a piece entitled: "Help for credit crunch casualties" which tells us that "A4e - Action 4 employment - has found permanent jobs for 17 clients since bringing the Government’s Flexible New Deal programme to the borough in October." Out of how many clients? The Stourbridge man who is cited as one of the successes got a job with ..... A4e. Some unemployed people might take issue with the main thrust of this piece, which is that clients need "coaches" who can "work on a one-to-one basis with each customer, identifying their goals and, if existing, their barrier to go to work [sic]. These barriers can be anything from childcare, debt issues, substances abuses, housing problems etc." Well, some do. Many, however, have no "barriers" other than the fact that they can't find work. They may well be qualified and experienced. The piece continues: “Once these individuals are ready to work, they work exclusively with an assigned employment coach who will focus on preparing them for work, helping them with their CV, job search, interview techniques and so on.” This is tarring all the long-term unemployed with the same brush.

"Emma Harrison: Delivering on a Dream, The 30 Million Woman Who Won’t Get Out of Bed For Less" is the heading of a piece on the Oriona Ltd business website. You've heard it all before. But one statement, which has been repeated elsewhere is "There is no budget attached to each person." Emma is talking about current contracts, presumably FND. But it's puzzling. Each client comes with a payment from the government, the bulk of it to be paid if s/he finds a job. There's a minimum and a maximum. So it's not clear what she means.

Zimbabwe - and closer to home

A4e's African arm is now involved in education in the troubled country of Zimbabwe. The company, described as "an international non-governmental organisation", has joined up with Teaching Zimbabwe in a project to set up two academies as centres of excellence and to "lure other local and international investors to pour resources into the country’s education sector". The project is described on the website of the Education Minister, Senator David Coltart. The venture could increase speculation that A4e would seek greater involvement in education in Britain if a Conservative government pursued its plan to allow parents' groups and other organisations to take over the running of schools.

Meanwhile, back in Britain, there's an interesting use of statistics from Jo Britto & Associates, a firm which provides, among other things, Employability Coaching. A4e have used their services with some success. “When Joe came to A4e, we were struggling to meet our outcome targets. Within six weeks, as a result of his motivational coaching, client outcomes in terms of work trials and jobs went from 25% to 55%” says a testimonial from A4e. We are not told where this happened or how many clients were involved.

A4e and the PADA

Ever heard of the PADA? I hadn't. It's the Personal Accounts Delivery Authority, a body set up by the DWP to "set up a national, trust-based pension scheme called ‘personal accounts’ that will help millions of people on low and moderate incomes, who do not have access to a good-quality workplace pension, save for their retirement." What better way to get this worthy organisation off the ground than to give out £3m worth of contracts to the private sector? According to a news information system, "A4E Ltd., Sheffield, United Kingdom, won a 3 million GBP multiple awardees contract award from Personal AccountsDelivery Authority to provide social, economic and market research services. (Official EU Ref. No 305010-2009)." If you're wondering what a "multiple awardees contract" is, so did I. But according to the PublicTenders.net site, there are 35 companies, many of them recognised research companies like Yougov, which have a slice of that £3m contract. Still, 1/35th of £3m is nearly £86,000.

"Our Shared Promise on Customer Care"

It's headlined "A shared promise to those participating in welfare-to-work programmes" and can be read on the Jobcentre Plus website. It "was developed by ERSA, the representative body for independent providers of publicly funded welfare-to-work programmes and is supported by the Department for Work and Pensions, including Jobcentre Plus, the Association of Learning Providers (ALP) and the British Association for Supported Employment (BASE)" and was launched by Jim Knight MP. All the providers, including A4e, have signed up to it. "It includes commitments from providers to:

• Listen to customers and provide support based on each customer’s circumstances and needs
• Help customers identify and make the most of their strengths
• Make the best use of the customer’s time, taking account of personal circumstances and by being clear when things need to happen"

and there are equally unexceptionable commitments required from customers. Nothing wrong with that. But I can't help wondering why the providers need to state this, when one would assume that it was required in their contracts.

Must try harder

For reasons best known to themselves, A4e have a blog called A4elivenews on a free blogsite. Whoever is responsible for it should bear in mind that a company with interests in education and training needs to avoid basic grammatical errors such as "Whose getting bored of TV?" (should be "who's", of course, and "bored of" is dubious) and "The media of late has been quick to voice parental concerns" ("media" is plural, so the verb should be "have", not "has").

And there's an interesting post on Realbusiness.co.uk from Jan Cavelle, who runs a furniture company. Jan went to the Enterprising Women Awards and heard Emma Harrison speak. "Now, Emma," she writes,"is clearly an amazing lady – a sort of cross between a female Lord Sugar and Sheffield’s answer to Mother Theresa – and no doubt the most phenomenal success story. Her talk was natural, fascinating and funny." But she was less than impressed with her speech. Emma was dismissive of people whose lack of self-confidence stops them doing something; and of those who don't have a mentor and are therefore bound to fail. Jan Cavelle concludes, "But I know that even though I am mini-league business-wise, I have – without a mentor – made a success of things in many people’s eyes, against some odds. In doing so, I provide employment for 30-odd people. I am sorry, Emma, but if I can keep progressing on working on myself and at least ensure security for them, overall I reject your tag of failure."

A4e and healthcare

A4e and healthcare - the terms don't go naturally together. But yes, A4e is involved in healthcare.

NDCs (New Deal for Communities) were set up by the government in some of the most disadvantaged parts of UK cities to provide regeneration and improvement. Large sums of money were pumped in to improve housing and, often, to build large facilties for community services. One such NDC is Aston Pride, and part of it is the Community Outreach Family Support Service. Now, search the site and you won't find any mention of A4e. But there's a document online which tells us that they "Successfully commissioned all Primary contractors for the COFSS Programme, including the Health and Regeneration Management Team awarded to A4e Ltd following an open competitive tender".

Not that A4e is reticent about it. On its own website the company tells us that "If you live in Aston, A4e can deliver healthcare to you and your family in the heart of your community". Services include "Support for pregnant women and expectant mothers" (Pregnancy, Birth and Parenthood Workshops, Ante Natal classes and ‘Meet your Midwife’ sessions) and "Wellbeing support that offers much more than healthcare…" which consists of Family cookery lessons, Welfare benefit & debt advice, and Confidential domestic violence support. And on an A4e blog site we learn of an event they're holding on 5 December which "will offer the community free help, support and information on: Immigration, Asylim [sic] claims & status, welfare, debt, pregnancy, birth, health and wellbeing to mention only a few."

Again, one is reminded of the super-contract idea, where every conceivable service is rolled into one contract.

A4e's answer to Facebook, and other oddments

An article on the website onrec.com describes A4e's launch of "The UK’s first ever social networking community to help reduce unemployment". "The site," says the article, "MyA4e Community, has been specifically designed for Flexible New Deal (FND) employees, with each having their own unique personal profile which converts into a copy of their CV and provides access to forums, messaging, available jobs plus news and events in their local area." A jobseeker from Hull describes the site as "very similar to Facebook." Now, I'm not disparaging this idea. I think it's a good use of technology, and it will be interesting to see how it works out in practice. Linking up a lot of unemployed people could have its drawbacks.

Meanwhile, an intriguing piece appeared on a Polish website (in English, I hasten to add!). A4e has welfare-to-work contracts in Poland. The piece is about using the private sector in social housing (I hate that term). One paragraph reads: "Michael Dembinski, the BPCC’s head of policy, mentioned PPP projects in the UK that linked social housing with training and resocialisation, delivered by private sector benefits-to-work companies such as Chamber members Reed in Partnership, Working Link [sic] or A4E. He described one such project in Glasgow, run by Reed in Partnership, where participation in a 20-week course leading to vocational qualifications in the construction sector was linked to the provision of social housing." Alarm bells started ringing. Does it mean that your tenancy is linked to undergoing training by private providers? Apparently not. The only link I can find is on a presentation by Reed in Partnership, delivered in March this year, which says "DCLG and DWP are working more closely together on the housing and worklessness agenda. Nine Flexible New Deal Phase 1 proposals with partnership working with housing associations as a key focus across all." I can't find any suggestions of taking this further. Maybe Reed and others have been over-egging things slightly. But it does remind one of A4e's ambition to have super-contracts from local authorities which would encompass most of the public services accessed by the disadvantaged. While neither Labour nor the Conservatives have indicated any appetite for this, it could well be that some cash-strapped authorities (especially after the May election) could find it attractive.

The Emma Harrison Story

The business world likes big, colourful personalities like Sir Richard Branson, Sir Alan Sugar and Sir James Dyson. Some entrepreneurs achieve huge status because of their ethical stance; Dame Anita Roddick comes to mind. It's harder to gain that kind of reputation if your business depends on government contracts and your income is mainly from the public purse. But A4e's Emma Harrison is trying.

Back in 2005 the Independent published an article "Lord and Lady of the Dance". "Putting on a 'Strictly Come Dancing' bash for 300-odd guests is par for the course for the party-mad Harrisons, says Simon Beckett". It was "in aid of the NSPCC Full Stop Campaign, of which Emma is chair of all the regions."

Thornbridge Hall, the Harrisons' Derbyshire mansion, is featured on another website where we can read not only about the house itself but about the Thornbridge Country House Brewing Company that's part of the Harrisons' business. Jim Harrison, Emma's husband, also has a small food company, Novantia.

Lately, the Emma Harrison story is appearing more often. A year ago the BBC Local website for Sheffield and South Yorkshire published a long piece about her by Stephanie Barnard which is unashamedly sycophantic (and not very literate): "I’m sat there without an agenda, no questions. I just want to know who Emma Harrison is…" she writes. This must be the definitive version of Emma's autobiography. In September this year another rehash of it appeared on a website called Sooperarticles. Curiously, the article is way out of date. Its last paragraph reads "In addition to Make Me A Millionaire, Harrison is also chair of the NSPCC's Full Stop campaign, for which she aims to raise £1,000,000 by 2006. She is also starting a project with Anita Roddick to enable women victims of abuse to create their own small businesses." Anita Roddick died in 2007.

I'm sure that Emma is aware that there are dangers in all this.

Global Entrepreneurship Week

Yes, it's Global Entrepreneurship Week this week, and the event was launched today at the British Library One of the speakers was A4e's Emma Harrison. "Emma Harrison, chair of A4E says entrepreneurs will always find their own way through the system. She tells her own entertaining story about illegal tuck-shops, blagging her way onto a university course, and running her Dad’s firm after 18 days. Emma’s top tips for entrepreneurs having transformed her business into a £200 million turnover success. On leadership: inspire, encourage and elevate, find your passion, purpose, a mentor and do four marketing activities a day to get your business out there."

Channelling the money

A4e has benefitted greatly, along with other companies, from the government's determination to take powers away from democratically elected local councils and hand them over to unelected bodies. And now that they want to channel funds through local councils they're increasingly finding that they can't.

Take the Future Jobs Fund. This was designed actually to create jobs, albeit temporary, for young people, so bids were invited from councils and from "partnerships" which could cover a wider area. But these partnerships tend to include private companies. In the Plymouth area, for example, the contract has gone to a group headed by the Wolseley Community Economic Development Trust, an organisation mainly funded by the council and European money, working with JCP - and A4e. (Just how much involvement A4e will have isn't clear.)

Then there are the Regional Development Agencies. These have often come under fire for being very expensive quangos soaking up money that should be going into development and regeneration, and the Conservatives have made noises about abolishing them. The NWDA, operating in the North West, has been more criticised than most. At the end of last year it was revealed that it had spent nearly £90,000 on attending party conferences, and the Taxpayers' Alliance branded it an expensive failure which had proved ineffective in creating new jobs, attracting investment and bridging the gap between rich and poor. One of the NWDA's operations is called Business Start Up which is run by A4e. "Business Start Up is a new funding initiative operated by A4e on behalf of the Northwest Regional Development Agency (NWDA) aimed at encouraging business start ups and advising fledgling businesses within hard to reach groups and areas in the Northwest. The fund is operated locally by A4e’s Northwest based consortium. Access to Business Start Up and any other business support products in the region can be found through Business Link Northwest, the gateway to business support in the region."

But not every council is happy with this arrangement. In Sefton on Merseyside the council wanted to run their own Business Startup scheme with the money on offer, but were told they could not. A report to the council's cabinet said: "Initial discussions ...... indicated that an additional cash contribution was required from participating organisations in order to co-fund the Business Start Up programme in their area. Organisations not providing an additional contribution would have delivery managed by an intermediary (A4E)." The council thought that they had arranged the required funding but "the Agency declined this offer, without clear reasoning, and offered instead direct contracting by the Agency (through its project manager A4E)." Council members were not happy, but were helpless to do anything about it.

Perhaps more councils will start to question the wisdom of distributing funding through private companies.

"Joined Up Moving Up"

A4e's news page reports: "The Welfare to Work Panel’s report 'Joined Up Moving Up' was launched today at a well attended and successful event in Central Westminster Hall. The Welfare to Work Panel’s report 'Joined Up Moving Up' was launched today at a well attended and successful event in Central Westminster Hall. Employment Minister Jim Knight spoke alongside panel chair Keith Faulkner from Working Links, Rob Murdoch from A4e, Chris Ledgard from Collinson Grant and CBI Director of Public Services Susan Anderson."

This panel was formed by the CBI, so you would expect that it would lean towards private business interests. Its Chair, Keith Faulkner, is also Chairman of Working Links (Employment) Ltd, one of A4e's competitors. Selections from the contributions at the launch can be watched here. A4e's Rob Murdoch talks about independent providers bringing "fantastic innovation", a personalised service and reduced expenditure on benefits. We need to capture that innovation, and develop more dynamic services to get people into work. The role of prime contractors is to ensure that all the services in an area are meeting the needs of the customer. The "supply chain" must be healthy and thriving to provide the best services. There was also a heavy hint about A4e's ambition to provide a more holistic service, one which can have an input into many aspects of the life of an individual or family - the super-contracts which they advocated to the DWP. Murdoch said that welfare reform cuts across all departments because it impacts on all fronts. Customers have a multitude of barriers, and they want to work with customers on all barriers to provide a more coherent service.

The FND advertising campaign

We reported on A4e's "Know Hope" roadshow, marketing its Flexible New Deal offering. So it's interesting to read on The Drum, a website for the marketing industry, an account of the campaign by a firm called Deviate: - "Deviate creates Flexible New Deal Work for A4e".

Of course at this stage success can only be measured by the amount of attention the campaign raised. "Daily blog reports encouraging visitors to track the tour’s progress helped generate almost 7,500 website visits in the first three weeks with a further 1,500 people visiting A4e’s online Flikr photo-gallery. A4e’s dedicated site for employers www.fnd4you.co.uk, also created by Deviate, was promoted by direct mail and online and print business media coverage." Perhaps JCP also has some indication of its success in the number of clients choosing A4e over the competition. As to the success of FND - that will be another story.

Connecting Communities Plus and A4e

You may never have heard of "Connecting Communities Plus". An official document tells us that " Connecting Communities Plus, Community Grants (CCPlus) were announced and launched by the Home Office in October 2005. They formed part of the Government’s agenda for community cohesion outlined in Improving Opportunity, Strengthening Society (IOSS) (Home Office, 2005). The funding was designed for local community groups and aimed to foster both racial equality and community cohesion." The community grants scheme came to an end in 2006 and was followed by another £18m of funding over 3 years for strategic grants, project grants and community grants. The scheme is described here. If you read to the end of that document you will see that the grants administrator for the strategic and project grants is A4e.

There's some slight confusion, in that A4e states that it was its Foundation for Social Improvement that was responsible, but also has a separate website for the scheme.

I'm certain that A4e did the job properly. My question is why a private company needed to be involved at all. I don't know whether they were paid for the work, but if so it would have been no more (and possibly less) than a quango would have cost. But it does seem that this is another area where A4e is establishing itself as the expert.

On a lighter note, one of the places in Britain that I really want to visit is the Eden Project. The Plymouth Herald reported in October that Eden has appointed a new chairman and three new members of the Eden Trust - one of whom is A4e's Emma Harrison.

A disappointed customer

An interesting article in the Telegraph says, "Employers have questioned the quality of the recruitment services provided by Jobcentre Plus and private contractors such as A4E after trying to hire staff." It describes the experience of "Richard Cook, director of London-based Champion Communications" who "said he had two vacancies and had approached A4E for help but had been left disillusioned by the experience." The A4e office was not prepared for that sort of enquiry, asked whether he could take on non-graduates, but didn't ask what his business did. "He does not know to this day that we are a PR company or that we focus on technology and media branding, which are fundamental questions to ask," Mr Cook said. "It did not stand up to the commitment that this organisation has in getting people back into work."

The Telegraph lumps this incident together with a survey by the Federation of Small Businesses which reported that 34% of its members thought that JCP was ineffective when they wanted to hire staff. (That's a minority, by the way!)

A4e has, of course, apologised, and promised to get their act together.

Insight

It has always been A4e's strength that it continually diversifies into new business opportunities. As welfare-to-work becomes a more crowded and less attractive business in the UK, A4e has spread into other areas such as education; and it's doing that in Germany as well. A German news report describes its certification as a vocational trainer.

Another new project is A4e Insight, slogan "Worldwide Business Experience you can Trust". "A4e Insight is the Research and Consultancy arm of A4e, a market leader in global public service reform and in the design, development and delivery of front-line public services that benefit individuals, organisations and communities" says its website. The four case studies it cites provide something of a puzzle. Two of them are in areas of business where A4e has a large stake. Money guidance is a new but profitable field for the company, and here it's presented as testing a pilot scheme for the Financial Services Authority. We also have A4e's contracts in "Invest in Skills" and "Train to Gain" described as work on behalf of the Learning and Skills Council of Yorkshire and Humberside. But the other two case studies seem to be departures for A4e. It did some market research for a Global provider of CAD/CAM software; and it provided help with the bidding process for "the country’s leading provider of civil enforcement services" which "has significant contracts with both central and local government." (If you're wondering what "civil enforcement" means, its the bailiffs.) So it seems that A4e's undoubted expertise in writing winning bids for government contracts can be sold to other companies.

A4e - an "environmentally responsible company"

From time to time a correspondent finds something I've missed, and I'm indebted to one for this piece from the Low Carbon Innovation Network. It's dated July 2008. Enjoy.

Select Committee Enquiry - a summary of submissions

We reported a while ago the submission that A4e made to the Work & Pensions Select Committee's enquiry into the "management and administration of contracted employment programmes". There are now links to all the submissions on the House of Commons website; and they are helpfully summarised on the Indus Delta site. There are some very interesting points from providers, representative bodies and the DWP. The Public and Commercial Services Union make powerful points which are treated rather patronisingly in this summary, and it's worth reading their submission in full. The union's stance is summed up in "PCS believes that it is wrong to allow private sector contractors to profit from the unemployed." But they are a lone voice in this welter of opinions.

Pathways results

Pathways to Work is the programme aimed at getting people on incapacity benefits back to work. The results, published today, are well below target. The average of all the providers is 12% job outcomes. A4e actually did better than its main rivals (Ingeus and Shaw Trust, which had similar numbers of clients) with 14% outcomes. The totals include both those who volunteered for the programme, and those who were "mandated" onto it; and, not surprisingly, the volunteers did much better then the coerced. But the overall results show once again that these contracts are not value for money.

Work for your Benefit

"Work for your Benefit" is a pilot scheme cooked up by Yvette Cooper and the DWP aimed at people who have been out of work for two years. It's explained on the DWP website. It consists of "up to six months" of "intensive work experience which will help improve their employability." You may suspect that this is punitive, or pandering to the "make 'em work" brigade, but of course that's not how it's portrayed.

The two pilot areas are Greater Manchester and East Anglia, and the PQQ results have been published. Twelve providers have been successful at this stage in each area, and they include A4e as well as other companies like Serco and Seetec that we're becoming familiar with.

As the Indus Delta site says, "The future of WfYB is uncertain under a Conservative government, so shortlisted organisations will have to decide whether it's worthwhile bidding for the contracts." But even without a change of government, this scheme seems unlikely to survive. It's hard enough to find work placements for the recently unemployed, and any contract that depends on guaranteeing getting people into such placements is not very attractive.

How is FND going?

There's an interesting blog (see Interesting Sites on the right) following an ex-offender's experience on Flexible New Deal. He's going into detail about his introduction to the programme, and comes to it with experience of the old New Deal. And he's aware that as an ex-offender he faces more obstacles to employment than most. Such clients are not attractive to FND providers (and will be even less so under the Tory proposals) when so much of the payment comes from getting and keeping a job. One new job title the blogger has come across is "Career Coach", the new name for what A4e used to call advisers.

Meanwhile, the stories about the government preparing to sell off parts of the nationalised banks to create three new banks, to be sold to firms that don't at the moment do banking, raises some intriguing possibilities. Is this what A4e, with its Capitec Uk Ltd bank lying dormant, has been waiting for?

Just for laughs, there's a story in today's Sun about an A4e employee in Northumberland.

ESF Phase 2 - nothing for A4e

The announcement of the successful bidders for ESF phase 2 has been made. (For some background on the European Social Fund see this website.)

Now, when the PQQ stage shortlist was announced, A4e had succeeded in 8 of the 12 areas in making the shortlist. But they haven't won a single contract. The biggest winner is Seetec, with 4 areas. Ingeus and Intraining each have 2, and ESG, Reed and Working Links have one each (Cornwall is still to be decided).

Interesting.

A Brief History of Welfare-to-Work

A recap of some history. The last Conservative government faced growing unemployment, particularly amongst young people, and the fact that employers would not train their own staff. They introduced various schemes - YOPS, YTS and so on - which encouraged the growth of numerous private training companies. Some of these companies were simply scams. Of the ones which were not scams (including A4e) few survived the end of the Tory government.

Labour introduced New Deal. This focussed first on young people, and offered a much more structured approach to training and support for the unemployed. It was followed by New Deal 25+. Private companies were central, naturally. New Deal was about genuine training, and private companies of various kinds - FE colleges, industry training bodies and specialist organisations - were best placed to deliver that training. But it was Jobcentre Plus which organised this and issued the contracts. By 2005 a budget was allocated to each JCP region and it was the JCP region which decided how to allocate the funding. Programmes ranged in length from 6 weeks to 52 weeks. The providers could interview prospective clients and take on only those who were willing and able to benefit from the course. Clients then undertook vocational courses such as NVQs while doing a real work placement. Providers were rigorously audited, and payment was on the basis of weeks on the programme, qualifications gained and job outcomes. There was a great deal of flexibility, with new courses such as Basic Skills being introduced, and scope for local schemes. For one quarter, Oct - Dec 2004, there were 34,410 starters on NDYP and 24,580 on ND 25+. In the following quarter the figures were 38,910 starters on NDYP and 22,630 on ND 25+.

But the then Secretary of State for Work and Pensions, David Blunkett, decided in 2005 that "new contracts for relevant and affordable provision should be put out to competitive tender, to come into effect from April 2006 onwards". What this meant was that private companies would organise New Deal region by region. Jobcentre staff could be sacked. One company that did particularly well in gaining these contracts was A4e.

The three years which followed showed just how bad an idea it was. The structure of the contracts was such that they were almost bound to fail. There was no filtering of prospective clients; everyone unemployed for the required period, regardless of whether there was any chance of them benefitting, was sent on a 13-week programme. There was scope for only minimal skills training. Clients were supposed to be put into work placements, but there were far too few genuine placements available, and many clients spent weeks working with voluntary organisations, or kicking their heels in the training centre. The system encouraged "creaming and parking"; the effort went into those clients who were most likely to get work, while those for whom a job was very unlikely were largely ignored. To win the contracts providers had promised job outcomes of 50%. This was always unattainable, and even before the unemployment rate started to climb the outcome rate averaged about half that. The definition of a job outcome (16 or more hours per week and expected to last for 13 weeks or more) was shown to unrealistic as available jobs became increasingly casual and part-time.

Back to the drawing board? Flexible New Deal is supposed to remedy the defects of the previous contracts. Clients will be offered training suitable to their needs, and not be required to sit in a training centre for weeks on end. The only attendance requirement is for 4 weeks of work placement. There is even an element of competition between providers. Clients have a choice between two providers in each area - hence A4e's roadshow to advertise their presence. And payments are dependent on outcomes to a much larger extent - 80% of the total - so the pressure to get clients into work is even greater.

Jobcentre Plus has been overwhelmed by the numbers of newly unemployed, and have had to take on more staff. But this is a temporary measure. On the basis of public-sector-bad, private-sector-good, JCP Support contracts are in place, with private companies offering the kind of support to claimants that they would once have expected from the Jobcentre itself.

The Conservatives promise an even smaller role for Jobcentre Plus. Their "Work Programme" will see the renegotiation of current contracts to convert them into a programme which more nearly expresses the ideas of David Freud. Private sector providers will only receive full payment if their clients stay in work for a full year. How many will want to bid for these contracts remains to be seen.

The ideology of the free market has prevailed over evidence and common sense.

Public v. Private

An interesting discussion has broken out after a recent post. A proponent of private enterprise is defending it against what s/he sees as the waste and inefficiency of the public sector. This is a huge area of debate, and I am neither an economist nor a politician; but it's worth setting out my beliefs on the subject, and later (possibly) relating the history of welfare-to-work as an illustration. There are, of course, many books on the subject which will reinforce whichever stance you take.

It is ironic that much of "nationalised" industry in the 20th century was forced on governments by the failure of private industries; coal-mining, railways and steel all came into public ownership that way. The NHS was the result of the failure of the private sector to provide universal cover. At the level of local government, council housing was necessary because the private sector couldn't house people adequately. In case we thought that nationalisation had had its day, we now own many of the banks because private enterprise failed.

Socialists take the view that most industries and undertakings should be publicly owned. That ideology gave way to the view that a mixed economy works best. But the pull to the right has been inexorable (the banks notwithstanding), and the prevailing orthodoxy is that markets provide the best mechanism for all industries and services. Profit is the best motivator. Public servants will always be underworked, overpaid and uncreative. The only actual evidence ever produced for this assertion is the catastrophic failure of the economies of communist countries, which has no relevance to modern, mixed economies.

Political parties took to promising to "reduce the size of the state". In practice, this means sacking civil servants and contracting out the services they delivered. At local government level, councils were, for example, forced to sell off housing and prevented from building more. They were forced to "deregulate" local transport, often resulting in a worse service. When the need for new services arose, it could often make sense to employ private companies to deliver them; "back-office" functions, heavily dependant on IT, could reasonably be contracted out. But often privatisation has been the result of government or local councils being unable to justify employing more people themselves. For instance, when government came up with the idea of direct payments for social care local councils had a choice; they could set up their own departments to deal with this, as most did; or they could find themselves bound by staff-cutting policies and fall back on private companies.

The only "market" in the delivery of public services is the competition between private companies to provide exactly what is required at the lowest possible price. It means that front-line civil servants, usually on very low wages but with job security, are replaced by even lower-paid people on short-term contracts. No entrepreneurship or creativity is involved, and hitting targets takes precedence over shaping an effective service. Large companies elbow out smaller ones, and a handful - Capita, Serco, A4e - come to dominate. Public monopolies rapidly give way to private monopolies.

That's where I stand. If you disagree, please give evidence.

The A4e Bank

A4e's aspirations to run a bank for poor people have been mentioned before. But it's a reality!

Back in January this year Mark Lovell described it on his blog as seeing "the potential for A4e to develop a relevant offer". A4e's bank is called Capitec Uk Ltd, and derives its name from a South African bank, Capitec. Lovell says that Capitec "helped us shape our thoughts and ideas on banking for people in poverty" but it is not clear whether there are closer links.

By the time that Lovell was writing about this, A4e's bank had already secured a grant of £1m from the Regional Industrial Development Board in Yorkshire, as we see from the minutes of Yorkshire Forward's board.

Yet the company is now dormant. What happened?

Two Memoranda

Two memoranda submitted by A4e to the Work and Pensions Select Committee make interesting reading.

One, EP 07, is the formal response to the inquiry into "the management and administration of contracted employment programmes." It's a long document, responding to the cases of fraudulently claimed job outcomes in Hull. A4e says that it has introduced a procedure whereby 50% of all claims are routinely checked by an independent team which phones the employer to verify that the client is working there, and can check with the Jobcentre that the client is off benefit. Para 3.11 states "A4e encourages whistleblowing as it serves as another important mechanism for identifying fraud. A4e has strengthened its whistleblowing procedures to encourage other staff members to disclose concerns about malpractice. A4e also believe that an independent body acting as an Ombudsman for the industry may be an effective way of regaining a sense of openness and accountability in the industry. As more responsibility for delivering the government's targets for employment is vested in the industry, the market needs to respond by placing an increased emphasis on transparency and accountability." The new admin systems for FND make fraud harder. All sensible stuff.

The second, CP 02, is on the subject of child poverty, submitted in May this year. It's a shorter document, summarised as:

§ A4e supports the Government's 2020 vision for eradicating child poverty;

§ A holistic approach should be adopted in the consideration of issues relating to children that considers educational and emotional, as well as economic, dimensions of child well-being;

§ The proposed 'building blocks' that make up the Government's 2020 vision should not be allowed to develop as silos since the issues they address are related;

§ The welfare-to-work and childcare agendas need to be more closely co-ordinated;

§ The system of benefits and tax credits should be less complex and easier to use;

§ Local government should take the lead on reducing child poverty, but fresh approaches to funding, commissioning and delivery are needed.

This sounds eminently reasonable. But in discussing "A Leadership Role for Local Authorities" A4e's ambition becomes clear. Para 17 says, "A4e believes that far-reaching improvements and efficiencies could be achieved by pooling existing pots of funding under a single overarching contract. Services aiming to reduce child poverty could be combined with worklessness and recession-beating initiatives to create a larger fund. Major national and international providers in the welfare to work and wider public service industry markets experienced in frontline delivery would then be able to compete for contracts and use their expertise for the benefit of local communities. Service and cost efficiencies could be more easily achieved. Combining projects would eliminate duplication and reduce the commissioning and contract management burden on the local authority." Guess who's best placed to deliver such contracts. Well, para 19 gives a clue, describing A4e's "Advice 4 Stoke service on behalf of Stoke-on-Trent City Council, which has been independently confirmed to have a substantial positive impact on reducing poverty."

Nothing seems to have come of this inquiry yet.

Private Eye's prediction

Private Eye magazine continues to take an interest in privatised welfare-to-work. In its current issue it's the failure of the recently defunct contracts that comes under fire. It has a rather odd, but illuminating, way of proving the point, saying, "Only 2 percent of firms involved in the Intensive Activity Period (IAP) scheme reached their target of 40 percent of entrants finding a job" and producing similar figures for BET, ETF and Gateway. And it points out that FND actually raises the target to 50%, "with pleas by the DWP select committee to ministers to lower targets ignored." Private Eye believes that "the failure of the Flexible New Deal is all but guaranteed". Well, the providers themselves probably believe that too - witness the negotiations that went on before the contracts were signed.

A4e is one of the providers who are putting a lot of effort into promoting FND as new, improved and generally brilliant. It does away with the worst aspect of the old contracts; the sitting about uselessly for 13 weeks. The only laid-down attendance requirement is for 4 weeks in a work placement. But anyone newly unemployed today will not be eligible for FND for a year (or 6 months in some cases). During that time s/he will have access to the growing number of schemes put in place by local councils and partnerships; schemes which don't receive national funding or make a profit for anyone, but which offer most of what FND offers, including relationships with local employers. It follows that anyone who is still unemployed after a year is likely to be among the "hard to help"; or there just aren't any jobs out there. The job targets for FND are "not just jobs, but jobs that pay and offer opportunities for progression, with an emphasis on sustaining and progressing in work to ensure all customers who need help to develop their skills have access to the relevant pre-employment and in-work training" (DWP website). A tall order. And providers get little income unless and until the jobs are secured and maintained for 13 weeks.

So Private Eye, and many other people, will probably be proved right. But let's applaud the efforts that A4e and others are putting into trying to make it work.

Thought leadership

We reported that A4e were sponsoring discussions at the party conferences. Private Eye picked out their appearance on the Labour Party's agenda (another firm, Avanta, was also involved) and were very scathing about the motives of such events. Now the Training Journal website has given both companies a chance to respond. I particularly like the phrase from A4e, “Thought leadership has long been an important activity for us."

Jobcentre Plus Support contract winners

The winners of the JCP Support contracts have been announced. These are to support what the Jobcentres do for people who are newly unemployed or threatened with redundancy. Or if you prefer, they are to do what Jobcentres should be doing if they had enough staff. Of the 24 contract areas, A4e has won 6, more than any other provider. Next is JHP Group with 4 areas, and then Ingeus (formerly Work Directions) with 3.

Education and A4e

Remember Vox4Tots and A4e's vocational education centre in Mansfield? The Guardian carries a piece about it. One sentence which might surprise the reader is "A4E, which also runs work-related programmes for prisoners and the long-term unemployed, has around 700 secondary school pupils in six centres across the north and the Midlands." The extent of A4e's involvement in education is far less well known than its welfare-to-work programmes. It's summarised on the company's own website here and here. The heartland is clearly the Tees Valley, where A4e has the contract for the EBP - Education Business Partnership - run out of the Thornaby Community School. This contract includes the STEMPOINT programme (see its website) focussing on science, technology, engineering and maths. So far the media have taken little interest in these activities, because welfare-to-work has an impact on more people. But they shouldn't be ignored.

FND Phase 2

For what it's worth, the list has been published of those providers who have been successful at the PQQ stage of Phase 2 of Flexible New Deal - in other words, the shortlist. A4e has been successful in 8 areas, including West Yorkshire and London. That's fewer than some other providers like EDS, Reed and SEETEC. It's an unusual shortlist, because between 10 and 23 providers have been listed in each area instead of the customary 5 or so.

Of course, it may never happen.

Medex and the care home industry

An article in the Yorkshire Post tells of a deal between Medex Training and the care home multi-millionaire Lawrence Tomlinson to provide training for 500 new staff for 11 new homes. What has that got to do with A4e? Medex is part of A4e. It was originally formed in 2005 to provide courses like first aid and resuscitation to people who worked in various medical areas. In 2006 Emma Harrison made it "part of the A4e group of companies" and extended the sort of training Medex provided, focussing on the care industry. Presumably it was a good fit with New Deal, enabling A4e to put clients through short courses relatively cheaply. And it's an even better fit with FND, if the deal with Tomlinson is anything to go by. The article doesn't say whether the new staff are coming from the FND client list, but it would make sense.

Is FND finished?

The Flexible New Deal contracts have only just got under way, but already seem irrelevant. The Conservatives have said that they will "renegotiate" them to transform them into their (or David Freud's) idea of welfare-to-work. The Tory proposals would pay providers only for outcomes - and 12-month "sustainable" job outcomes at that. Anyone with a glimmering of knowledge of the current jobs market knows how scarce such permanent jobs are. FND providers were concerned that it wouldn't pay; and that was with 80% of the payment on job outcomes of 13 weeks or more. Who will want to bid for contracts with 100% on job outcomes of a year? Even if some up-front money is provided to help cover costs, will the only bidders be institutions like FE colleges, who have the necessary infrastructure anyway, and large companies like A4e and Serco which can bear the costs? We shall see.

Meanwhile, A4e continues to look to other areas of business. In Northern Ireland they've been awarded a £400,000, 2-year contract to provide a free debt advice phone line.

A4e's New Star

A4e have found a new person to be their media face - and she's good at it. Jo Blundell, their Group Development Director, was on BBC Breakfast and on Radio 5 Live this morning explaining FND as it goes live.

The TV item was brief. After a quick explanation by the presenter, she was asked what is the point of FND. It's so "no one gets left behind" and to "keep investing in them". Why do it with a private company? Because there are a "very vibrant and experienced set of providers". ("Vibrant"?) And 80% of their money will come from outcomes.

The Radio 5 Live interview was longer, but she coped well. FND is personalised, tailored to the individual. They'll be with their customers for a year, get to know them well, become like a life coach. Why not just give the money to people? Because they need motivating, have issues which are not simple, need quite a lot of help. But there are no jobs. It depends where you are. The job market in London is okay, for instance, but it isn't in Hull. It's not the ideal time to be launching the scheme. Yes it is, because FND will give everybody a chance. Who are you targetting? isn't it a scattergun approach? No, it's individualised. What's the incentive for firms? Won't they just get rid of a current employee in order to take on someone from the scheme to claim the incentive, and keep doing so? Blundell didn't really answer this question but waffled valiantly. What about people who say that wages are too low and it's not worth working? Yes it is, even though it can be a close call at first. What are the targets for A4e? Across the 5 districts where they have contracts, it's 50% into 13-weeks-minimum jobs.

I was impressed. The slogans had gone; no "improving people's lives" or being "passionate". Blundell was articulate and personable. Now we have to see whether the reality of FND in A4e's hands matches the hype.

Tory policy - how new is it?

The Conservatives are making much of their welfare-to-work policy. But the BBC's Nick Robinson, on his blog, has pointed out that the plans are pretty much the same as Labour's, and that both parties are exaggerating the differences between them. One of those keen to make the distinction clear is James Purnell, the man who presided over the late, unlamented New Deal contracts and devised FND. On the Demos website he points out the "Holes in Conservative welfare plan". And for a view from the left of both of Tory and Labour, read Dave Osler's article on the Liberal Conspiracy site.

Meanwhile, FND is up and running. It was interesting to see that when the BBC's Working Lunch today wanted a view from one of the providers they looked to Serco.

Good news from the Tories

The Conservatives' plans for a "Work Programme" will hearten all welfare-to-work contractors. "Tories would force jobless to work" reports an article in the Times, describing a plan to "tackle the dependency culture". "The welfare plan is the brainchild of Lord Freud, the former Labour adviser who defected to the Tories earlier this year. It would abolish the Labour government’s New Deal programme designed to get the long-term unemployed into work. It would also effectively mean the end of Jobcentre Plus, where bureaucrats design training programmes for the unemployed." Presumably Lord Freud thinks private companies can design better programmes than "bureaucrats" - and I did speculate recently that JCP would be next for privatisation. As the article says, this plan is based on the American model.

People like Lord Freud are evangelical about the role of private profit in getting the jobless into work. Good news for A4e and all the other contractors.

Guardian interview with Emma

The Guardian today carries an article based on an interview with A4e's Emma Harrison; you can also read it on the UTV website. Written by Amelia Gentleman, it starts out as a disconcerting piece of PR for FND, as Emma is being interviewed in a mocked-up FND office (it doesn't say where) that A4e have been using to train new advisers. 'Emma Harrison, A4e's founder and chair, bubbles with enthusiasm for the new approach, which she is certain will have a better success rate than the outgoing, one-size-fits-all, classroom-based formula central to earlier government New Deal employment programmes. "We knew something different had to be done," she says with an impassioned energy that will be familiar to those who saw her star in recent television shows The Secret Millionaire and Benefit Busters. "You can't sit everyone in a classroom for 30 hours for 13 weeks. It's just wrong, and it doesn't work. It's like going to a hospital and everyone getting the same treatment."' There's a lot more in that vein. But then Gentleman gets on to the fact that "the regime is tougher than before, and those who do not comply risk seeing their benefits cut for up to 26 weeks." And we are told that the target off 55% job outcomes has now been abandoned. "Commercial sensitivity means that none of the companies successful in their bids will reveal exactly how many people they are contracted to get into work. Jo Blundell, A4e's group development director, will say only that, to begin with, it could be as little as half the original target." (There is no mention of the fact that the number of projected clients on FND has now been reduced by 35%, leaving all providers with redundant staff and facilities before the programme even starts.) We then get a rather curious statement: "Even without the extra difficulties posed by the recession, many thought these targets were wildly over-optimistic. Commercial considerations also make the success rate of private companies difficult to access, but leaked figures earlier this year showed that organisations delivering the earlier New Deal – in a more benign economy – got only 25% of their clients into work. A parliamentary answer earlier this year revealed that A4e had got just 20% into work during 2008-09." I say "curious" because the success rate isn't all that "difficult to access" - try the Ofsted reports for starters. 'Harrison says the figure of 20% is not one she recognised. She puts the company's success rate at between "20% and 45% for the older programmes".' True, but the average comes out at 25%. Emma is then confronted with the "uncomfortable juxtaposition" of her mansion and the acute poverty of her clients, as seen on "Benefit Busters". But profit margins are kept to 4%, she says. And for anyone who recalls that on BB she seemed unaware that the system made it impossible for people to take casual work, and it takes weeks to get back onto benefits, we're now assured that she is very interested in "benefit buffering". "It is a concept that Iain Duncan Smith's Tory thinktank, the Centre for Social Justice, put forward in its recent proposals for benefit reform. Although A4e has benefited hugely under New Labour, and David Blunkett is a paid adviser with A4e, Harrison stresses that the company is "apolitical" and ready to work with any administration." The article ends with an explanation of Emma's wish for a "family-centred approach".

Read the whole article.