The Curious Tale of the CLAC Annual Report

The CLACs are A4e's two contracts, together with Howells solicitors, to provide advice services to people in the local authority areas of Leicester and Hull. The Leicester one has been going for a year, but it was the Hull CLAC which stirred up a hornet's nest when the CAB, now deprived of funding, was facing closure. At that point the government decided that the CLACs weren't such a good idea; and it has since given some funding to the Hull CAB (which has amalgamated with the East Riding CAB).

So how are they doing? An interesting announcement appeared on A4e's website on 23 July; the 2008 / 09 Annual Report of the Leicester CLAC was available - download here. Only the link didn't work. A few hours later there was an alteration - to get the report, email A4e's marketing department. Naturally, I did. And, naturally, I used one of those webmail addresses that don't proclaim one's identity. Two days later I got a reply - but not from A4e. It was from Golley Slater, a "marketing solutions" company. "I wanted to drop you a line," said the employee, "as I handle the PR for A4e and saw your email re: the Leicester CLAC. We are just finalising the report and will send it over to you as soon as we can. Are you writing for a specific publication as it would be good to have a chat?" Evidently they believed that I was a journalist. I reassured her that I wasn't working on a specific project - at the moment; I said that I was interested in comparing the CLACs with what they had replaced, and that I looked forward to getting the report.

Naturally, I was interested in this PR company. I'm sure it's pure coincidence that the CEO is called Chris Lovell and A4e's executive chairman is Mark Lovell. Golley Slater work not only for private companies but for government quangos. And there's a description of their work for A4e on their website:

A4e Network Case Study

The Brief

Complex brief to build profile and understanding for UK market leader in public service reform ensuring:

Strong retention of nation and region ‘personality’

Need to be seen as thought leader by key decision makers

Need to embrace PA dimension in Scotland and Wales

Regional relevance; national ‘multiplier’

Multi-layer programme of public relations

The Response

Build a multi-site team co-ordinated through a central account director to ensure a programme of independent yet linked campaigns:

Regional relevance; national ‘multiplier’

Multi-layer programme of public relations

Results

Media volumes increased >25%

Media understanding of Wales and Scotland offer; established as preferred commentators

Understanding of media at regional level and ability to release stories improved

Introducing more robust measurement values

Fascinating stuff which explains a lot. But I had expected, since the CLAC is a contract with the Local Authority, that the report would be a straightforward account of the year's work, signed off by the Council and the Legal Services Commission. Perhaps I was being a little naive. But why is a PR company "finalising the report"? And why isn't it available from A4e without questions and the opportunity to spin it?

While waiting to see if it would arrive, I looked at Leicester City Council's website for news. You really have to hunt for the CLAC, through a host of other advice links. And when you do find it, it's a typical A4e site, replete with propaganda. There's no link to the annual report, but a helpful summary of customer feedback dated 18 June 2009; 12 quotes from delighted users of the service. Still waiting, I turned back to the brief introduction to the report on A4e's website: "The centre, jointly run by A4e and Howells Solicitors and financed by Leicester City Council and the Legal Services Commission, has had a significant impact across the city since launch, meeting the advice needs of over 700 people with 94% of clients rating the service as excellent or very good." 700 people. In a year. Assuming that they work 50 weeks of the year, that's 14 a week. Less than 3 clients a day. That's a "significant impact"? And the feedback figures are irrelevant unless we see the form which clients were asked to fill in and know when the feedback was gathered - immediately after the interview, or later when the quality of the advice has been tested.

Well, they've had a week, and it's clear that I'm unlikely to get the report; and that it would be of no value as a source of information if I did. This is simply a PR exercise - and a rather clumsy one.

Ofsted report for A4e North East, East Yorkshire and Humber, Programme Centres

On 26 June 2009 there was an Ofsted inspection of A4e's premises in Hull, York, Bridlington, Goole, Grimsby and Scunthorpe (it was during A4e Hull's nightmare week). The full report can be found here. As with all of A4e's inspections under the current contracts the overall grade is 3 - satisfactory. (There are 4 grades; 1, outstanding, 2, good, 3, satisfactory and 4, inadequate.) The summary says:

Key strengths

 Good development of confidence and motivation

 Good links to external organisations to provide specialist support

 Particularly effective management information system to monitor performance

 Good management of subcontractor

Key areas for improvement

 Very low progression rates into jobs

 Insufficiently individualised target-setting and action planning

 Insufficiently thorough quality arrangements

They point out the very low progression rate into jobs of 18% in 2008 / 09, while recognising that "the number of participants joining the programme has increased significantly from 203 participants in the first three months of 2008/09 to 585 in the last three months of 2008/09".

One paragraph which surprised me stated that "Procedures for safeguarding participants do not meet current government requirements. A4e currently does not have a suitable safeguarding policy and procedure. Staff have not had appropriate background checks and have not received training covering safeguarding vulnerable adults."

The report makes interesting reading for anyone who has been on an A4e programme or has worked in the sector.

Inquiry into contracted employment programmes

Parliament's Work and Pensions Select Committee has announced an inquiry into "Management and administration of contracted employment programmes" and has invited submissions. They seem to be asking the right questions, obviously prompted by recent revelations.

• Are there sufficient safeguards in place to prevent providers from making fraudulent claims for outcomes they have not achieved?

• Is there sufficient protection for employees who raise concerns about their employers’ delivery of a contracted employment programme?

• Does DWP’s contract management approach ensure the quality of service received by customers is commensurate with the level required under the contract terms?

• Do DWP and the National Audit Office effectively monitor the accuracy of providers’ management information systems, provider performance against targets, and the evidence on which provider payments are claimed?

• How has the centralisation of contract management in DWP impacted upon the role of Jobcentre Plus and both provider and customer experience of outsourced employment programmes?

• Will the customer charter proposed by DWP ensure that customers, Jobcentre Plus and contractors know what they can expect of employment programmes?

• Will contract management in the prime contractor model be transparent and effective in monitoring quality throughout the supply chain, and in maintaining a role for sub-contractors?

If anyone wants to make a submission - and I just might - they should read the guidelines carefully.

Why it's so hard to claim job outcomes

New Deal providers can only claim a job outcome if the job is intended to last for 13 weeks or more and is 16 or more hours per week. A4e fell foul of this when they agreed with a recruitment agency to put temporary jobs down as permanent; but they were unlucky, since many providers have done the same thing. The problem is that so many jobs these days are on a short-term contract or casual basis. An article on the Recruiter website illustrates this. A big waste management company, Veolia, has engaged a recruitment company, Barker Ross, to supply "flexible" staff. We all know what that means. Then we're told "Barker Ross is also to supply locally-based staff to Veolia’s Sheffield site and is working with Action for Employment and the Jobcentre to place candidates." Great news for people who get work. But if the agency places A4e clients as "flexible" staff, without guaranteeing them 13 weeks work, they can't be claimed as job outcomes.

Online Seminar

There's a seminar taking place this afternoon, 23 July, online at 2.30 pm, when "The UK Commission for Employment and Skills will be making serious and far-reaching recommendations to Government later this year about what employment and skills services in England should deliver; how to make best use of public funding; and how to reduce the complexity of organisations and initiatives." (See their page here) Among those taking part will be Jon Trigg of A4e, and there's the facility for other people to get involved. Could be interesting to watch, and if you've got views, why not share them?

A4e on HubPages

With the helpful widget on the right you can read the latest bits of PR from the company. HubPages is a free mini-blogging site which has been used before now by people on A4e's programmes to express their boredom. For A4e it's a way of getting out some free advertising. Its latest piece, "A4e and the British Heart Foundation", shows how New Deal providers have had to make a virtue out of a necessity. The intention was that clients would spend most of their time out on work placements, but amenable employers have been very hard to find. So providers have turned to the voluntary sector and thousands of clients find themselves working in charity shops and in other such roles. Define "volunteer".

Note the rather sad statement at the bottom of A4e's main HubPages page - "A4e has no fans".

Questions to the Secretary of State

theyworkforyou.com records a written question to Yvette Cooper on 15 July, asked by David Davies, Con, Monmouth. He asked: "how many training and skills contracts her Department has with A4e; what percentage of people who have attended such A4e training and skills courses have been placed into permanent employment; who supervises and inspects sites where A4e are giving such courses; and if she will make a statement." Yvette must be away. He was answered by Jim Knight, who always gets put up to answer awkward questions: "The Department currently has 47 contracts with A4e for the delivery of a range of welfare to work provision. On those contracts where we count job outcomes, during the period 2008-09, 20 per cent. of people starting provision delivered by A4e have started work. Some customers, however, will still be on provision. The delivery of provision is monitored by the Department and is also subject to external inspection by Ofsted in England, and Estyn in Wales. Areas for improvement identified at inspection are addressed through the Department's contract management process."

theyworkforyou.com gives you the chance to vote on whether you think the question was answered properly. Do you?

The A4e Community

In need of some advice? Some inspiration? Try the Community on A4e's website. There you will find such gems of wisdom as "Council houses are houses which are owned by local councils"; "People are the foundation of any good business. If you don’t have the right people who are happy and motivated, you don’t have a business"; and "Being a lone parent is tough". You're allowed to leave comments. But, strangely, only one of the posts on the July page has any comments at all, and they are not exactly critical. Could they be moderating out any criticism?

By the way, if you do go to A4e's website, run your cleaner afterwards - it leaves a cookie.

Newsnight discussion

With unemployment soaring, there was an interesting discussion on Newsnight (BBC2) tonight about, specifically, youth unemployment. One of the young people interviewed was a graduate who had signed off JSA rather than continue with a 13-week New Deal programme. He said it was a waste of time, in overcrowded, drab surroundings, and was actually preventing him looking for work. The provider wasn't mentioned. The minister, Jim Knight, said he would look into who the provider was, but admitted that the programmes were not designed for people with higher skills. Well-qualified, well-educated people have been saying this for a long time!

A Socialist Reaction

You would expect the Socialist Party to be hostile to private sector involvement in welfare to work. And an article on their website, headed Private Companies Caught in Jobcentre Scam, sets out the antipathy that they, and the PCS union, feel about it. Particularly interesting is the reference to A4e's involvement in Israel. You may recall that A4e got its contracts in Israel in a welter of criticism in 2005 that they had been helped by the British government despite the fact that working in occupied territory was against the government's policy - see EI Exclusive: Britain's Double Game. Now well ensconced in Israel, A4e are known there as Amin. Those who have been clients of A4e in Britain may like to look at Amin's web page on the rights and requirements of a participant there.

Some recent blog posts

Here is a selection of the most recent News & Comment posts from the old website:

On 30 June the first lot of bids for allocations from the Future Jobs Fund will be considered. This is a £1 bn fund aimed at creating real jobs, mainly for young people, and the government is stating that it wants local authorities, regional bodies and the like to lead, in partnership with public sector and "third sector" bodies. No mention, you notice, of private sector companies, so A4e can sit this one out. But no. A4e is attending the Local Government Conference in Harrogate next week and "we'd like to hear from anyone who would like to partner with A4e to maximise the impact of the Future Jobs Fund to benefit your local community." (A4e's website) After describing what the Future Jobs Fund is, they say, "As a market leader of Welfare to Work services, A4e has capacity and capability to design, develop and deliver front line public services that benefit individuals, organisations and communities. This includes partnership working with the private, public and third sector organisations." We shouldn't be surprised, of course. Just by chance I came across a quote from Emma today: "There are three things that you should spend you time doing: Marketing, marketing, marketing. It is the most important thing that someone growing a business should be doing. If you are not prepared to do that, then everything else is irrelevant." Yes, if there's public money on offer, A4e will be there.

A4e is at the centre of a fraud enquiry, the Observer reports today. "The DWP started its investigation into A4e's Hull office in May 2008, after discrepancies emerged in "confirmation of employment" forms submitted by the company. Two recruiters filled in forms meant for employers who agreed to take on workers. In some cases, employers' signatures were falsified. One of the recruiters had also entered into a fraudulent deal with a local temp agency. In January, the recruiter was sacked, while the other resigned. "It had the smell of a conspiracy," a source close to the company said. An A4e spokesman said it had found only 20 fraudulent claims. It remained unclear last night why the DWP investigation has been going for 13 months, when A4e was a bidding for major government contracts. A4e is expected to repay £15,000. Another recruitment company has been asked to repay £48,000 following a DWP inquiry." Wow! It's small-scale stuff, but the Observer points out the government's "individual learning accounts" fell victim to the same sort of fraud and had to be scrapped. The article says that Yvette Cooper, the new DWP secretary, has said that the multi-million pound contracts could be cancelled if widespread fraud is discovered. Don't hold your breath.

Tonight Channel 4 News carried a report which will dent A4e's image even further: The piece sets out to show that fraud is common in the New Deal programmes, but that the DWP doesn't publish the results of its investigations so it's hidden. The first part of the piece concentrates on Working Links, who forged clients' signatures and paperwork in Glasgow in 2007. Since that investigation, more fraud has been uncovered in Brighton, North Wales and Hackney. Then they turn to A4e, which is decribed as one of the biggest names in the industry. The fraud that the Observer reported on yesterday is mentioned, malpractice which took place over a 4 month period in 2007. But, says Channel 4, there was another case towards the end of 2008, also in Hull. An A4e employee was found to be colluding with an employment agency to state that factory jobs were intended to last for 13 weeks, and therefore attract a payment, when they were only ever meant to be temporary. A4e says that this was a "rogue operator" and two members of staff have been sacked. (In fact, it's common practice.) Terry Rooney MP, who is the Chair of the Work & Pensions Select Committee, said he had no idea that investigations had taken place, and wants the National Audit Office involved. Jim Knight MP, employment minister, says there's no evidence of systematic fraud. But the piece has shown that significant amounts of public money are being wasted on fraud which is being covered up. Not a good few days for A4e!

The local BBC TV news in Hull has carried a piece which will cause A4e more grief. Vicky Johnson talked to two clients, Simon and Steve who said they spent more time doing quizzes than developing their skills. They retraced one of the quizzes, out on the streets in the city - one way of getting rid of the clients for a while. The two said that the programme was a waste of money and they were very disappointed. The only useful element had been the updating of their CVs and being able to give A4e as a reference. Jonathan Davies, the local A4e manager, said that they had just had an Ofsted inspection and had some "very positive feedback". We'll await this report with interest.

But no doubt A4e are regretting the proximity of their Hull office to the BBC Centre.

It hasn't taken long for A4e's dealings in Australia to be called into question:

Basically, it alleges that A4e had contacts with the most influential politicians before the bidding process started for the welfare-to-work contracts there. The implication, of course, is that the private meetings influenced the destination of the contracts. Perish the thought! A4e wouldn't do anything like that, would they? Despite all the meetings that went on, the government department denies that there was anything wrong. But the article, which points out that "A4e has strong links to the British Labour Party and is being investigated by the UK Government for alleged fraud involving work placement contracts" also draws attention to an intriguing fact. "A4e executives met Ms Gillard's [the Employment Minister's] deputy chief of staff, Tom Bentley, in February last year to discuss the Government's plans to reform employment services for Australia's unemployed. A4e had no contracts in Australia at this time." Now, this same Tom Bentley "worked in Mr Blunkett's ministerial office as a special adviser on school reform and social inclusion" in 1998/99. It's worth reading the whole article. A4e's reputation has travelled, and the Australian press is saying things that the British press daren't.

Other contracts

• Train to Gain is a government scheme under which employers are encouraged to release members of their staff to take an NVQ Level 2, by paying their wages for the time they spend on the course. A4e won a large number of these contracts in the short term, but created a tortuous administration which hampered the scheme, and the company subsequently lost many of the contracts.
• Recruitment services, particularly in education and the NHS.
• Online business courses for Learndirect.
• OLASS - Prisoner education contracts in four areas of the country. Perhaps A4e saw this as similar to training the unemployed but with less chance of the clients dropping out! Certainly they saw the benefit (to them) of tacking the New Deal stuff onto the education programme. One problem they hit was in staffing; they had to take on existing teaching staff but could not join the teachers' pension scheme, and this meant that staff were worried about a possible reduction in their pensions.
• Money advice Courses on money management are provided to schools. Stoke Council have given A4e a contract to give money advice to council tenants, in a scheme which in July 2009 claimed that "Almost 2,800 residents have been helped to reschedule £9.6 million worth of personal debt and receive over £3.5 million in unclaimed benefits". All this has inspired Emma to go further. She wants to start a bank aimed at the poor. She said recently that she hopes to have three trial branches operating within 18 months. Encouragingly, a partnership with RGMR consultancy has secured a titbit from the Treasury to pilot generic financial advice initiatives.
• A4e were, on 14 January 2009, announced as one of the "partners" in a Money Guidance pilot programme in the North West and North East, along with genuine advice agencies like the CAB and the Consumer Credit Counselling service.
• Social Care As the government pursued the idea of direct payments for social care, A4e was in there, waiting to grab a slice of the cake. By late 2008 it had 12 contracts across the country, including Middlesborough and Somerset.
• CLACs Intentionally or not, the government created another opening for A4e when it sought to reduce the bill for legal aid. Local authorities which used to fund advice charities like CAB now have to put these out to tender, seeking bids from partnerships between solicitors and advice organisations. The first of these was in Gateshead, where the voluntary sector managed to win the contract. But A4e got its act together for the next offering in Leicester, and won the contract. In Hull it was also announced as the preferred bidder, and despite a determined campaign by the CAB the Hull CLAC opened its doors in December 2008. The government has since had to rescue the Hull CAB, and has decided that CLACs are not a good idea.
• Choice Advisors Along with Centra, A4e have the contract for the Choice Advisors Support and Quality Assurance Network, which "supports" people in local authorities who advise parents on school admissions.
• An education business link organisation consortia (EBLOC), which organises work-related learning activities across the four local authority areas of the Tees Valley. This gives A4e a foothold in schools.

It's a Frequently Asked Question - how has A4e managed to insert itself into so many "markets"? With the reputation it has, how does it secure contract after contract? There are two main reasons:

1. When considering bids for a new contracts, government departments are not allowed to take into account the previous records of the bidders. Odd? Yes, and it means that you can bodge one contract but secure the next.
2. Local authorities which feel that they can't, or don't want to, provide a service in-house have to go through rigorous procurement processes. They have to accept the bid which offers "best value", which is not necessarily the cheapest - but if it's not the cheapest they have to have a very good reason, and not liking a particular company isn't good enough.

Welfare to Work

A4e's core business has always been in contracts to deliver "welfare to work" programmes, and these have enabled the company to sell itself around the world as "Britain's leading provider. Contracts existed before Labour's election victory in 1997, but the gravy train started with NEW DEAL. A4e's success in winning these contracts baffled competitors and led to suspicions that they were being helped by people in high places (suspicions fuelled by their venture into Israel, and by the paid involvement of David Blunkett when he had ceased to be a minister).

In 2006 the government decided to sack a lot of the Jobcentre staff who had been responsible for organising the back-to-work schemes and contract out this organisation region by region. A4e won many regions, mainly by promising a 55% success rate. Everyone in the sector knew that this was ridiculously optimistic. Given the numbers of people forced onto the schemes who are, for various reasons, unemployable a good rate would be around 30%. And the results for the year to March 2009 show that the highest rate that A4e achieved was 33% (with the FTET group). With older clients the job outcome rate was 22%. There have been no moves to sue for breach of contract.

There are several New Deal programmes, but they boil down to two types. One is Gateway, a two-week course for under-26s, aimed at providing an intensive programme of support and encouragement. All other programmes last for 13 weeks, and preclude the kind of genuine skills training that was integral to the old New Deal. Only very short training courses can be undertaken, and the costs of these have to come out of the provider's budget, so there is little incentive to fund them. Clients are supposed to be placed with employers for work experience, but there is a severe shortage of employers willing to take them on, so increasingly the placements are with the voluntary sector. A4e developed the practice of paying voluntary organisations small sums to take these clients. As unemployment increased rapidly in 2009, the pressures became severe, with higher numbers of clients being referred for "training" which they increasingly saw as pointless. A piece on Radio 5 Live in 2009 exposed the discontent of many clients at the poor service they believed A4e to be offering, and Ofsted's poor opinion of the company. In June 2009 BBC's Look North programme in Hull reported on criticisms by two A4e clients of the waste of time and money of the programme.

The New Deal contracts encourage providers to maximise profits by minimising costs, and the costs are principally staffing and facilities. The effects of cost-cutting were exposed in March 2008 when the Manchester Evening News reported Jobseekers treated "like cattle" Similar scenes were reported in Sheffield and in Newport, South Wales, usually on local forums or private blogs. Such complaints must be treated with a degree of caution; most of the people on the schemes don't want to be there. But a picture emerged of clients kicking their heels in poor facilities with inadequate (and under-skilled) staff. There is a maximum payment to the provider for each client, and it is paid in two ways. "On programme payments" are made for each week, or part-week, that the client is with the provider. Job outcome payments are made when the client gets employment which is certified to be of 16 or more hours per week and expected to last for 13 weeks or more. If the client leaves the programme for a job before the 13 weeks are up, and stays in the job for 13 weeks, the provider can claim the "rolled-up weeks", the on-programme payments for the remaining weeks.

Pathways to Work is a new variant aimed specifically at those who are on incapacity benefit.

Increasingly A4e is entering into small scale contracts, such as that with Manchester University in June 2009.

BY SPRING 2009 A4e HOLD A TOTAL OF 46 CONTRACTS FOR WELFARE-TO-WORK PROGRAMMES ALL OVER THE COUNTRY. THESE INCLUDE 7 ESF CONTRACTS, FUNDED BY THE EUROPEAN SOCIAL FUND TO A TOTAL VALUE OF £23,086,770.

Flexible New Deal (FND) A4e have secured contracts in 5 areas for this revamp of New Deal. It will be more difficult to make profits under the new system. Payments depend much more heavily on job outcomes.

FRAUD In June 2009 it was disclosed that the DWP had investigated fraud charges against A4e and money had been clawed back. Paperwork was being fiddled to claim payments for non-existent job outcomes.

OFSTED Until 2007 inspections of training providers were carried out by the Adult Learning Inspectorate. The function was then transferred to Ofsted. The inspectors award grades on up to 7 aspects of the office's work, and an overall grade can be arrived at. So an organisation is rated 1) Outstanding, 2) Good, 3) Satisfactory or 4) Inadequate. Six A4e New Deal offices have been inspected since 2007. Bear in mind that offices have notice of the inspection and so have time to get their paperwork in order and plan what to do on the day, or days, of the inspection. All of the 6 were awarded a grade 3 - satisfactory; the best is Cumbria with grade 2 in a couple of areas; the worst is Northumbria with a grade 4 for equality and diversity. Note that none of A4e's New Deal offices have achieved an overall Good grade.

The inspection reports detail strengths and weaknesses. Many of the weaknesses are common to sveral of A4e's offices:

• Low job outcomes (4)
• Insufficient identification of participants' needs or barriers to employment (2)
• Weak target-setting (4)
• Inadequate or slow approach to quality improvement (6)
• Insufficient use of data and monitoring (3)
• Inadequate use of teaching or resources (3)

History of the company

In the 1980s a small engineering training company was set up in Sheffield to take advantage of the Conservative government's willingness to pour money into such companies for uncertain returns. The owner, Harrison, took his daughter, Emma, into the company, then quickly skipped to Germany. This part of A4e's history has acquired the aura of legend. Emma Harrison was a young graduate, suddenly landed with a company to run, and an absent father who was busy draining it of money. In 1991 Emma renamed the outfit Action for Employment (quickly abbreviated) and set about making money. She remains almost the sole owner.

The breakthrough came with the Labour government's New Deal programme. A4e rapidly became the "preferred bidder" for contracts to provide back-to-work training. Their success baffled their competitors, who knew they were putting in equally good bids. This led to rumours that it was Emma's connections who were responsible. Someone high up in government, perhaps? A Sheffield MP name of Blunkett, maybe? But there was no evidence for this, and rival training companies went out of business as A4e prospered.

Business Link - questions in the House In 2001 the Business Link organisations, which had been formed locally, were put out to tender by the government. A4e bid for all of them. In their determination to get the contracts they were prepared to stretch the truth. In Somerset they had stated that local leaders, including the leader of the Council, supported the bid. That was news to the gentlemen in question, and the bid had to be withdrawn. In Humberside it was felt that something similar was happening, but government ministers seemed intent on awarding the contract to A4e. The company scooped up the majority of these contracts nationwide. They lost many of them in 2007.

EI EXCLUSIVE: Britain's double game In 2005 suspicions were heightened when A4e was able to work in Israel, in contravention of British government policy but apparently with British Embassy assistance. The contract also marked the beginning of A4e's expansion into the international market. They have been able to boast of their success in Britain in "reforming" public services, and by 2008 were being described as a £120m global organisation. In Israel, business appears to be going well. See an article in the Jerusalem Post, where A4e's genius for propaganda is well demonstrated. The company is now known as Amin in israel.

A4e operates in a growing number of countries, trading on their claim to be "the UK’s largest private provider of public services in the labour market and social integration sectors, including the welfare to work programme ‘New Deal Prime Contractor'". They are established in France, Germany and Australia. We also learn from a Polish journal that it "currently manages two projects in Poland, in Szczecin and in Zabrze, supporting 550 people back into work by the end of 2008". Another developing market is India, where A4e have a foot in the door. Turkey looks set to be the next opportunity, and they are trying to establish themselves in South Africa.

A4e's philosophy is now simple: bid for everything. Currently they employ over 60 professional bid-writers. The drive to diversify in the last few years has been partly the result of a drop in profits. In 2002 -03 A4e was worth £50 million on the basis of profits of £4m and sales of £60m. In 2004 - 05 the figures were £3.9m in profit on £75.7m sales. Note that these "sales" are the money spent on meeting the contracts; profit is what they manage to keep. Profits declined sharply in 2007, as a number of contracts were not renewed. Undaunted, Emma said that she was "proud that the company has sustained pure organic growth at a phenomenal rate" and forecast an increase in profits to a £500 million turnover by 2014.

A4e has set up the Foundation for Social Improvement, which apparently aims to encourage the "third sector", especially smaller charities, to depend on them for training and access to government. They are "proud to be working in conjunction with Communities and Local Government (CLG) to deliver Connecting Communities Plus scheme". The FSI is a "social enterprise", an organisation which blurs the line between the voluntary sector and for-profit businesses. It's another example of the company's ability to infiltrate all aspects of the government's dealings with the most disadvantaged.

A4e - a company that makes its money from government contracts

In 2008 I set up a website to keep watch on the Sheffield-based company A4e. On 14 July 2009 they got it banned as "defamatory". To them, the truth is too uncomfortable. But truth is not so easily suppressed.

A4e is one company among many which has made huge profits from the contracting out of public services. Some, like Capita, have concentrated on "back-office" services which involve systems more than people. A4e, however, has made its money from contracts which deal directly with people - the poorest people in the country. That's not how they put it, of course. They are "improving people's lives". That claim must be examined. They say that they're about "public service reform". You can read all this rubbish on their own website. The Labour government has continued the work that the Conservatives began of outsourcing public services, enabling them to sack civil servants and "reduce the size of the state". This has brought no benefit to the public, and it has transferred taxpayers' money, in vast quantities, into private hands. In A4e's case, this means the hands of one person, who has become a very wealthy woman. Money intended to provide services to the those most in need goes instead into the bank account of Emma Harrison. This is now considered normal. We challenge that.

WHO THEY ARE

Emma Harrison is the Chairman and founder of the company. The Executive Chairman isMark Lovell - "An entrepreneur and business leader focused on high growth business strategy in public service markets, Mark has led the strategy for the growth of A4e Ltd from start up to a £100m business over the last 16 years." - so says A4e's website. Bob Martin is the Group CEO; he was recruited from Capita, the largest company benefitting from government contracts. Rob Murdoch is responsible for managing the competitive tendering and business development arm of the business. He has worked in the education and training sectors, as well as the finance and equity markets, and recently went to Istanbul to push A4e's business. The Sales Director is Rod Newey. He went from running a business to running the Merseyside TEC. He headed A4e's Business Link involvement, and now leads the push into the international market.

A4e's staff, certainly at the lower levels, are paid poorly in comparison to public sector workers. Many are temporary staff or on short term contracts, are minimally qualified. This is inevitable but goes some way to explaining the poor service which many clients experience.

FRAUD

2009 brought plenty of bad publicity for A4e with a Radio 5 Live piece on its welfare-to-work programmes, then an Observer article on fraud investigations and a Channel 4 news piece which backed up the charges.

From The Telegraph 9 September 2008 "The latest register of members' interests shows that the former home secretary's incomings over the past year or so were boosted by a £30,000-a-year salary from a Sheffield-based international training and support services company called A4e. This is supplemented by the £50,000 he receives each year from the Sun newspaper, £30,000 from a Texas-based security company called Entrudler he had with Kimberly Quinn, the former publisher of The Spectator. Blunkett, 61, the MP for Sheffield Brightside, has garnered some useful headlines for his new employers A4e with the Star newspaper in his constituency reporting in January: "A4e's free legal line wins Blunkett's approval". That was shortly before Blunkett took a job with the company."

This came as no surprise to anyone who had followed A4e's fortunes from the early days, and who suspected that there was a friend in high places who was instrumental in securing all those contracts. But it does raise questions about how an MP can be employed by a company which has government contracts.