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)