Saturday, 17 October 2009

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.


  1. so long as business does those schemes, so long as its profit motive, rather than altruism It will never work.

    An thats what a lot of these private companies do they dont care about you, or me, just ££££

  2. I deal with the public sector all the time. I would rather have the profit motive with shareholders who know that performance = £ than the ineptitude and wastefulness and bureaucracy of the state.

  3. Have you any evidence that "performance = £" etc. when providing services to people? We could have an interesting philosophical debate, and I would want to unpick your claim. But one point - A4e doesn't have shareholders.

  4. It's the ineptitude and wastefulness of the state that has allowed private companies, some of which still think they're in the Wild West, to make huge profits from these miguided welfare to work schemes.

  5. A4e has shareholders, the largest of whom is Emma Harrison. The company is also profitable. This information is on the public record at Companies House.

    The majority of their contracts have deliverables and failure must in due course result in less business. I am not stating that this means that all they do is fine, however it compares favourable to the waste and lack of accountability of the civil service.

  6. Other shareholders?
    I'm well aware that the company is profitable. But the way that these contracts are set up, and the way in which the procurement process works, do not mean that failure results in less business. There are more players in the market now, and that reduces the business available to each player; but as with many a privatisation situation. the design of contracts often means that only a few large companies can afford to bid.
    Your basic tenet is unproved, and if you look at the history just of New Deal the evidence is against you.

  7. My basic tenet is that private sector can often - not always - deliver better than public sector. I stand by this because entrepreneurs will use ingenuity, ambition and hard work to succeed. Customer choice will normally mean that the best service providers prosper and overtake those who perform less well. This does not always happen and public sector procurement does favour those who are large or are safe and who have a track record of previous contracts. This does make it hard for new providers.

    Don't forget that the idiots that run procurement come from the same pool that do public sector delivery. If they can't get their supplier contracts right why do we believe they can do any better carrying out the actual work?

    In this country success and profit are dirty words. We would rather have inept civil servants than effective but prosperous suppliers. Having worked in this space for some while (hence my anonymous posts) I despair at the waste.

  8. I appreciate your comments. But I disagree with your fundamental belief. We are not talking about running a railway or steel manufacture, but about the delivery of services to people. This is not the place to recount the history of New Deal, but I doubt any argument would sway either of us. I too have worked in both the public and the private sectors.

  9. This is a slightly edited comment from Advocatus Diaboli:
    Public sector inefficiency is a myth. What it boils down to is that public sector employees used to have rights which meant that their needs were taken into account. Now that the flow model of employment has been let loose in the Civil Service etc, continuity of service has gone, block treament is in and commercial fraudulence has replaced pride in a job done well.
    Nonetheless, BAE gets whitewashed when its corruption is exposed - highly efficient favouritism there, rich *** get their tax subsidies without delay and dodgy newspaper proprientors-satellite telly owners get the rules bent for them and bent MP's are 'asked' to repay their fiddles - just like a claimant who has been wrongly paid, NOT! The public sector is as efficient as the government wants it to be.


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