Pathways - why it's not working

When delivering a public service such as helping the unemployed to find work there will be some crucial differences between public servants and private contractors. These differences are highlighted in a report on Pathways to Work, which looks at the "impact of outcome-based contracting". Pathways is a programme to help people with health or disability problems. The report, done by the Policy Studies Institute for the DWP, says that the programme is failing for a number of reasons. The Jobcentre Plus website says: "The help is tailored specifically for each person taking part in the programme." But instead what's happening is "creaming and parking". Inevitably, if you pay by results, i.e. job outcomes, contractors will cream off the clients most likely to get jobs and park the ones who have little motivation or who have serious problems. The economic situation has meant serious financial problems for the contractors. "As providers were not meeting their performance targets and service fees were not sufficient to cover running costs, it was widely reported that prime and partner delivery organisations were experiencing financial strain as a result of the contractual agreements." It has also meant that the prime contractors are leaving it to their sub-contractors to deal with those clients with specialist needs. "Service innovation on the part of prime providers was largely focused on reducing operational costs and achieving performance efficiencies." The conclusions of the report are polite but pretty damning. But they don't include the scrapping of these contracts and returning the service to people who are resourced over the long term and are motivated by the desire to do a good job and deliver a service to the public.

Famous, Rich and Jobless

More details have been published of this series. "Back to work tsar and chairman of A4E, which rehabilitates the long-term unemployed, Emma Harrison is to appear in a new BBC TV series, Famous, Rich and Jobless where ‘unemployed’ celebrities will experience joblessness." Given the list of celebs taking part, it reminds you of "I'm a Celebrity, get me out of here". And all lovely national and international publicity for Emma and A4e, paid for by our licence fees.

Contracts and Amin

There is some confusion at the DWP over what to do about contracts which are in the pipeline. Yesterday it was announced that the publication of results of bidding for Work Choices has been delayed. (This is the programme which replaces Workstep, for those with support needs in employment.) But today the providers who have been successful at the PQQ stage of something called the "progress2work-LinkUP and Welfare Reform Drugs Recovery Pilot" have been published. What is that? There's a partial explanation on the DWP's website. The results here show that A4e have been shortlisted in 11 of the 19 contract areas. So while, as we reported on 19 February, the government is pressing ahead with pilot contracts for integrated "Personalised Employment Programmes" it is persisting, or perhaps not, with specialised provision for those with special needs.

Perhaps we should look to places like Israel to see the future here. An article in the Jerusalem Post describes A4e's success there (where the company is called Amin). Bearing in mind that this is probably a PR piece like those which the company gets into British local papers, it is an interesting description of the regime for the "chronically unemployed" (how long before that phrase appears over here?). And it points out that the Israel contract (won in controversial circumstances) "led it to expand to other countries, including France, Germany and South Africa, and even has the company looking toward expansion to India."

PS: I received a comment from someone who claimed to have taken part in the forthcoming "Famous Rich Jobless" programme. If that person will send me another comment (it won't be published) with some evidence, I'll consider it.

"We've got the funk!"

That's the title of a story in the Star, Sheffield's local paper. I really can't think of anything sensible to say about it, so I'll leave you to read it here.

Can this be true?

This item has just popped up on the Telegraph website, in the City Diary section: "I understand one of the Government's favourite private sector partners Emma Harrison of A4E (it gets the long-term unemployed back to work) is preparing a new BBC TV series called Famous, Rich and Jobless where Emma deals with the work issues of the, well, rich and famous. First up on the show is Oasis rocker Noel Gallagher's ex-wife Meg Matthews, EastEnders actor Larry Lamb and society girl Emma Parker Bowles. Best of luck." OMG, as they say.

Two new contracts

With a general election not much more that 2 months away, the government is pressing ahead with new contracts in the "welfare-to-work" area. The DWP has announced the shortlisted bidders for two contracts, and A4e are on both shortlists. The first is for round 2 of the Community Task Force, which is responsible for work experience placements under the Young Person's Guarantee. 43 organisations have their hats in the ring for this one. The second contract is for the Personalised Employment Programme. The DWP describes this as follows: "The Personalised Employment Programme will combine provision for JSA claimants, ESA claimants and parents with younger children in a single, integrated, flexible employment programme. Through this multi-client group contracting approach the pilot will test a radical new way of tailoring support to individual needs and helping those with multiple barriers to employment back to work. The pilots will also trial the conditionality framework recommended in the Gregg Review and we are exploring the feasibility of testing an innovative ‘accelerator’ funding model in the Personalised Employment Programme pilot areas."

There is a fuller description at the tendersdirect site. The shortlists have been announced for two contract areas, in a pilot for a scheme to replace existing New Deal and other provisions. Whether a new government will press ahead with this remains to be seen.

Insight, prisons, quangos and unemployment

LDC is a private equity company and it is part of the Lloyds Banking Group (much of which you and I own). It wanted to support a management buy-out of JHP, a training and skills company which has been in existence for 25 years and is a competitor of A4e. So who better for LDC to bring in to do the due diligence than A4e? Its Insight consultancy arm "was able to draw on in-depth understanding of both the employability and skills markets, and used its knowledge and experience to provide detailed insight into the likely prospects for JHP". Yes, of course. And A4e "were also able to provide a unique insight into JHP’s positioning as an integrated provider of both employability and skills, an area of increasing importance to policy makers in all parties."

LDC went on to invest in JHP, so they were happy with what they learned. Now, I'm probably naive about such things, but isn't this a bit like asking Tesco to tell you whether it's worth investing in Sainsbury's?

The latest edition of that excellent publication Private Eye has two items which touch, albeit indirectly, on A4e. The first concerns prison education. A4e had a number of contracts including 8 in Kent; but it pulled out of those early because it was losing money hand over fist. They were taken over by Manchester College, which is now the largest provider with contracts in 96 institutions. Now they too are losing money and having to sack teaching staff. "Not all colleges failed to foresee the hidden costs," says the Eye, pointing out that two London colleges withdrew from a tendering process because there wasn't enough money in the contracts. But this is surely a case of the inability to undo a botched privatisation.

The second item concerns the PADA (Personal Accounts Delivery Authority). We reported that this quango has the job of enrolling millions of low-paid employees in a pension scheme based on stock market investment. One of its first actions was to dish out a large contract to 35 firms, including A4e, to do market research. PADA has become what the Eye calls an "old mates' club", staffed by people with surprising CVs who just happen to know each other. It's worth reading the article; it's entitled "Nest of Vipers". Let's hope that if David Cameron becomes PM he keeps his promise to do away with all these quangos.

And finally -- the unemployment figures which came out in recent days included the fact that "long-term unemployment, covering those out of work for more than a year, increased by 37,000 in the quarter to December to 663,000, also the highest figure since 1997." (Channel 4 news). So what is the point of New Deal?

Blunkett's Johannesburg trip

If our favourite minister is Jim Knight, our favourite ex-minister must be David Blunkett MP, who was once Secretary for Work and Pensions then went on to work for A4e. The Times carries a piece today about a trip he took to Johannesburg in South Africa in 2008 on behalf of A4e. The story isn't about his job with A4e; it concerns the fact that he turned up at the airport with his son only to find that the travel agent had failed to book the tickets; so "an embarrassed Blunkett contacted Julia Simpson, director of corporate communications at British Airways, who was previously his head of press at the Home Office and an adviser to Tony Blair. She arranged for him and his son to board the plane without tickets. They were given upgrades from premium economy to club class for the trip to Johannesburg and from premium economy to first class on the return leg. Blunkett’s travel agent went on to pay £4,468 for tickets for him and his son that were worth £12,676." Well, why not use your contacts?

As the story continues: "Blunkett, who is leading Labour’s attempts to raise £10m for the general election campaign, made the trip on behalf of A4E, an employment and training firm. It pays him £30,000 a year to act as an adviser. It paid the £4,468." The trip was obviously successful. A4e's South Africa website describes how they are "Bridging the skills gap - City Of Johannesburg". "We are working with the municipality," they say, "as they prepare to issue a tender for the delivery of a Welfare to Work program for 10,000 unemployed people, through the Jobs Pathways programme following a pilot."

Spin

There's a fascinating example of spin this week in the tale of our favourite minister, Jim Knight MP, and his visit to Plymouth. The local paper, the Plymouth Herald, reports it in a straightforward way, no doubt aided by a hand-out from the minister's press secretary. There is something called a "Backing Young Britain roadshow" which is "touring Britain's cities, encouraging employers to give jobs to people aged 18 to 24." There is no mention of Flexible New Deal or A4e.

The local MP, Linda Gilroy, has her own spin on this event on her website. Here we learn that "the Minister also called in to A4E Plymouth." To prove her interest in the topic of young people and unemployment she cites a speech she made last year and provides a link to it. The only mention of A4e in that speech is: "I want to mention the work that the local strategic partnership has developed, bringing together the public, private and voluntary sectors to identify our strengths and to develop action plans that play to them. The DWP values its work. Partnership working between the DWP and organisations such as Working Links and A4e in my constituency is important, and making common cause with the Learning and Skills Council is also part of the recipe."

So far A4e is hardly central to the story. But the company's own website sees it differently. Mr Knight, we're told, had a brief meeting with Paul Dingle, A4e Pathways operations Manager, who said that, "The Minister told local A4e bosses he was very positive at the work being done across the region & especially Pathways to Work." Then Linda Gilroy is quoted: “A4e are delivering some fantastic programmes in the city and I wanted the Minister to hear directly how unemployed people are being helped to find sustainable job opportunities through training, educational and work placement schemes being organised by A4e.”

Same story, slightly different interpretations.

Report on the Jobseekers' Regime

Anyone concerned with Flexible New Deal will be interested in a report by the DWP on "early findings from the evaluation of the revised Jobseekers Regime and Flexible New Deal (JRFND), the Six Month Offer (6MO) and Support for the Newly Unemployed (SNU), all of which went live in April 2009. The JRFND is being rolled out in two phases; the first from April 2009; the second from April 2010." The report can be downloaded from this site; but beware, it's 196 pages long. There are detailed analyses of the early stages, but not, of course, of the stage at which "customers" are referred to private contractors. One conclusion it reaches (and I confess I haven't read the whole lot) is that the longer someone is unemployed the less likely they are to get a job.

The Waiting Time

This is a waiting time for private contractors. We're eight weeks from a general election, the outcome of which is still anyone's guess; and local councils are finalising budgets and working out how to save money. We can be certain that a great deal of lobbying is going on behind the scenes, with companies like A4e seeking to influence decision-makers both locally and nationally. But nothing much is happening at the moment.

I suspect that, whoever is in power after 6 May, New Deal (Flexible or otherwise) is dead. If Labour is returned they must surely try to bring some coherence to the various programmes aimed at getting the unemployed into work. Contracts will either be renegotiated or allowed to run down. We have no figures as yet for FND but we know that, ironically, it has cost jobs. The providers need fewer staff because clients only have to put in the occasional appearance; and sub-contractors are largely redundant, except where the specialist skills of sub-contractors like FE colleges have been picked up by those running local schemes. The Conservatives are determined on their "Work Programme" but this will not be viable (and will attract no bidders) unless it embraces all the unemployed, not only the long-term, and that would drive out local initiatives. If there is a hung parliament, it's all up for grabs.

Local councils will be more promising ground. We've already seen Tory councils contracting out all their services to the likes of IBM, and more are promising to do so. This may well be where the action is for A4e and others.

Jim Knight answers a question

Jim Knight couldn't tell Mark Lancaster MP the figures for A4e programmes in his own constituency of Milton Keynes or for England as a whole. But he could tell Hazel Blears MP (coincidentally, no doubt, a member of his own party) "how many young people in the City of Salford have participated in the New Deal for Young People in each year since its introduction." (See TheyWorkForYou.com) Not that the table of figures he provided enlighten us about its success or otherwise. But perhaps that was the point. The DWP certainly keeps stats on outcomes, and it analyses them by provider. The information is published, but not in a constituency by constituency form. It appears that the Department is happy to provide information to MPs on participation in New Deal in their constituencies, but not on outcomes.

No answers

The Conservative MP for North East Milton Keynes has been quite persistent lately in asking written questions to the Secretary of State for Work and Pensions about unemployment issues, with a particular focus on A4e. On 25 January he asked "how many hours of training A4e staff working on contracts let by her Department undertake annually" and was told by Jim Knight that "Staff training is an internal matter for A4E and therefore not one that the Secretary of State can offer information about, or comment on." Yesterday Mr Lancaster homed in on results, asking more or less the same question in two ways: "what percentage of people who have attended A4e meetings as part of programmes delivered under contract to her Department have found work within six months since the inception of those contracts in (a) England and (b) Milton Keynes?" and "how many people who have attended A4e meetings in Milton Keynes as part of programmes delivered under contract to her Department have found work within six months since the inception of those contracts?" Reasonable questions, one might think. But he got the same answer from Jim Knight to both: "This information is not available in the format requested." One hopes that Mr Lancaster is not satisfied with this non-answer.

Petition

My attention has been drawn to a petition which has been accepted by the 10 Downing Street website, submitted by R Ravji. It can be found here and reads: "We the undersigned petition the Prime Minister to call a Public Inquiry to establish whether paying private companies to reduce UK unemployment represents good value for the taxpayer?" Under "more details" he says, "Private companies like A4e have been paid millions of pounds of taxpayers money to run programs like New Deal (now replaced by Flexible New Deal) to help the unemployed find work. But these private companies only found employment for about 20% of particpants. And much of that employment was part-time and short term (less than 6 months) whch resulted in many of them claiming benefits again!"

There's little doubt what the response will be, but anything which encourages scrutiny is welcome.