Reporting the data loss

There has been remarkably little interest in the theft of a laptop containing personal client data from an A4e employee. Most of the coverage has simply repeated A4e's own press release. And some of the descriptions of A4e, such as "the jobs club firm" reveal a lack of knowledge of the company and its activities (although that particular description on the Register site also mentioned the fact that A4e administers the Home Office test for would-be citizens) . Even the BBC's local news filmed outside A4e's offices in Hull and referred to the company's "legal department" without mentioning the CLAC. One client of the CLAC said that the apology from A4e wasn't good enough and asked why the data was in someone's home. The news item drew comparisons with other data theft scandals, and Jo Blundell was put up to say that A4e are taking all the action they can.

The Guardian went with "Review to look at fairness of incapacity benefit tests", saying: "The contracts will in many cases not give private firms any money until they have found work, with the fee rising probably after someone has stayed in work for six months, 12 months or even two years. Emma Harrison, director for A4E , the largest private contractor, said she was delighted that the government was merging the different welfare to work schemes into one work programme, saying it would cut time and the cost of bidding for many small contracts. She said contractors were in discussion with banks to see if they would provide loans to cover the new regime of payment by results."

Oops!

Quite an embarrassment for A4e - "Laptop with personal data of 24,000 people is stolen". It's the data from the two A4e-run CLACs in Hull and Leicester, and was on the laptop of an A4e employee stolen in London in a domestic burglary (the laptop, not the employee!) The fact that all that information could be on someone's laptop kept at home is really startling. It's Bob Martin, group chief executive of A4e, who's had to make the apology. "We sincerely apologise to all those affected by this incident. It should not have happened. While we are advised that the risk to clients is low we are taking every precaution to ensure their interests are protected."

Meanwhile, the "framework agreement" has been published by the DWP. It stresses that "organisations are expected to have good financial standing and arrangements that will enable them to manage the risks associated with the delivery of business under this framework agreement. As a minimum, organisations must have the ability to deliver across an entire Lot and manage the financial demands of delivering at least one package of business without undue risk to the specific requesting contracting body." So only the big companies need bother applying.

There's a neat story about the Work Programme on the thisismoney site, which suggests that providers will get a "nominal" sum for those clients they don't get into work. How nominal, one wonders.

The transition

We reported last week Freud's reassurance to the FND providers "that all providers currently performing well will take a full place in the new programme and as long as they worked hard, they had no need to worry." That came after Emma Harrison's apparent assumption that A4e would have contracts. On Wednesday a written answer in the House of Lords shed a little more light on the situation. Lord Kirkwood of Kirkhope (who was, as Archie Kirkwood, a Lib Dem MP), asked "what is their [the government's] estimate of the legal costs of cancelling last year's phase 1 contracts with employment providers to deliver phase 1 of the Flexible New Deal." (See theyworkforyou.com). The answer from Lord Freud was, "We have embarked on some very productive meetings with FND1 providers on how between us we best manage the transition from Flexible New Deal to the new work programme. It is too early to provide an estimate of the likely costs of making this transition and indeed some of this will depend on whether existing FND1 providers are successful in bidding for the work programme." What that means is that the ideal scenario from the DWP's point of view is that the current providers bid for the new contracts and are acceptable, so that there is a cost-free transition. If any of them decide not to bid they will be entitled to compensation for the premature ending of the FND contracts. And that gives the "primes" like A4e a lever to extract concessions in the WP contracts, and little hope to any new providers who want to come in.

But according to Ben Brogan in the Telegraph the DWP is giving cause for concern. "Iain Duncan Smith is admired for his commitment to reform and the passion he brings to the issue. But the jury is out on whether he has the skills necessary to translate ideas into action, let alone deliver them at the helm of a complex bureaucracy. The ideas are great, but the detail is a killer. Some speculate that Chris Grayling was put in there to provide the executive oversight, after he made a success of the DWP brief in Opposition. But civil servants report that Lord Freud is roaming beyond his area and wonder whether he might turn out to be the Frank Field of the outfit if his frustrations with IDS begin to be felt. To cap it all Mr Field is being given a role to involve himself in welfare issues and the department fears that like some unmanned drone, he will keep circling above the battlefield, launching occasional deadly strikes." So nothing is certain. and it's still a case of "wait and see".

An award for Emma Harrison

A4e's Emma Harrison has won an award. It was part of something called the First Women Awards, held in association with Lloyds Banking Group and supported by the CBI, with patron Sarah Brown. See the Real Business website and various other versions. Harrison got the Public Service award: "Emma founded training company A4e in 1991 and has built it into a £200m-turnover business operating in 11 countries and employing over 3,300 people. Her Sheffield-based business works with people and communities to tackle unemployment and deliver skills, advice, guidance and enterprise. Emma is a mentor and supporter of many small businesses and is a non-executive on the board of the Institute of Directors." She shared the award with Caroline Shaw, chief executive of The Christie NHS Foundation Trust. One could regard this sort of thing as of interest only to the people involved, but we learn that "The ceremony was attended by more than 450 guests including Home Secretary The Rt Hon Theresa May MP, Minister of State for Security Baroness Neville-Jones, Helen Alexander of the CBI, Fru Hazlitt, soon-to-be ITV’s managing director of commercial and online, and royal biographer Penny Junor," so it's part of the networking with influential people (I don't include Penny Junor in that.)

Meanwhile, Australia has a new Prime Minister, Julia Gillard, and that has revived the controversy surrounding A4e and Ms Gillard's department when she was Employment Minister. There's a summary here. David Blunkett figures in that story; but he no longer lists working for A4e on the Register of Members' Interests.

The Budget

Yesterday's budget contained few real surprises, but one of the measures which will affect A4e is the abolition of the Regional Development Agencies. The North West Development Agency in particular have funded a number of projects which gave work to the company. Whatever replaces the RDAs will have less money to spend, and cuts in public spending across the board will mean slimmer pickings.

Unemployment is set to rise, providing clients for the Work Programme contractors, but fewer possibilities of getting them into jobs and thereby earning outcome payments. And yet the government has made the plight of the unemployed even harder by increasing benefits in line with consumer prices inflation, rather than retail prices inflation, from next year, which means a smaller rise; and by reducing housing benefit by 10% for people who have been on a jobseeker's allowance for 12 months or more. Will this be an incentive to find work?

Round-up, 18 June 2010

There is still no news of the Channel 4 programme, "The Wager", featuring the A4e boss whom the Guardian called "the ubiquitous Emma Harrison". But it's Rob Murdoch, the company's Executive Director, who has been in the news this week - or, at least, in the Telegraph. On Thursday the paper called on him, and on Alex Pollock of Avanta, for a comment on the fact that "Long-term jobless soars to 13-year high despite £2.8bn public spending". Later in the same day the headline had changed to "New jobseekers 'squeeze out' long-term unemployed in rush for jobs" but it was still Pollock and Murdoch who supplied the point of view of the contractors. They have something of a balancing act to perform at the moment. They can't very well disagree with government policy, past or present, and so have to insist that the contracts to assist the long-term unemployed have "worked". At the same time they need to talk upthe difficulties of finding jobs for this group, as new contracts are drawn up.

There has been the usual crop of PR pieces for A4e in the local press, but an item on their own website, on the success of a student at Vox, their private Pupil Referral Unit in Stockton, may indicate more than a passing interest in the government's education policy. Many of the "free schools" announced today will be managed by private companies on behalf of groups of parents, teachers or charities, and we know that Serco is one of several companies involved. At the moment these schools are meant to be "not for profit", but for companies like A4e and Serco which are already heavily involved in education it makes financial sense to take this next step. We must continue to wait and see.

Small charities and big business

It is, according to A4e's Emma Harrison, "Small Charities Week", "a major celebration of the small charity sector and its huge impact on communities across the UK". You can listen to her talk about it on the MyA4e site or read about it on the ThirdSector website. The writer of that article, Anne-Marie Corvin, sees some irony in this, pointing out that "A4e, the private company Harrison founded in 1991, frequently competes with charities for government contracts. Two years ago Hull Citizen's Advice Bureau was left facing an uncertain future after A4e beat it to a contract to provide legal advice, and the Migrants Resource Centre accused A4e of 'gross exploitation of the voluntary sector' when the firm asked it to work as a partner without payment in 2008."

Meanwhile, there's the business of new contracts. More scrutiny of the Work Programme proposals has raised another disconcerting fact. According to Chris Ball, Chief Executive of TAEN: "The emphasis will be on sustainability of jobs; proportions of fees will be paid after one, two and three years in the job – an idea meant to encourage providers to work much more closely with the employers in which clients have been placed. There will be downsides for providers compelled to wait for their money however." It might also be seen as a "downside" for the client who faces up to three years of ties to the provider.

On Friday Michael Gove will fire the starting gun for the "free schools" race. We know that several private companies, including Serco, have arranged with parents' groups to run these new schools, ensuring that this is, in effect, the beginning of the privatisation of our education system. It is unlikely that we will get a list of which companies are running which schools.

Round-up of the week

It's been an interesting week. After Sunday's TV appearance by Emma Harrison we had to wait for statements from ministers Chris Grayling and David Freud to find out what she meant by her "whole families" claim and her assumption that A4e would be delivering the new contracts. On Thursday Freud spoke at the Queen's Speech Forum (reported on the Indus Delta site) and "reassured the audience that all providers currently performing well will take a full place in the new programme and as long as they worked hard, they had no need to worry." He also promised that "providers will have the freedom to carry out their work – with no meddling from government." The latter statement raises the spectre of unaccountable private companies whose clients have no right of appeal to their Jobcentre or MP, because government must foot the bill but not "meddle". No wonder Emma was happy.

There is still no sign of the latest Channel 4 programme featuring Ms Harrison, although it is thought to be scheduled for this month. But, like any other public performer, she has the services of an agency to promote her interests. "McLean-Williams Management is a theatrical agency set up to provide a first class service for actors, actresses and creatives" says their website, and Emma Harrison is listed as a client under "presenters". (Mind you, her CV page doesn't seem to have been updated for a while.) What is next for Emma as a presenter, one wonders. The GMTV sofa, perhaps; they seem to be losing presenters at the moment.

Ministerial statement

Chris Grayling has issued a written statement giving a bit more detail about the transition to the Work Programme. There are details on the Indus Delta site and on the CarleyConsult site. It contains nothing really new, but we now know that FND1 providers (Flexible New Deal phase 1) are being given 12 months' notice of the termination of their contracts. The worry now for those providers is whether they will be the preferred bidders for the new Work Programme contracts. A4e's Emma Harrison certainly gave the impression on Sunday that she expected that to be the case; and Graham Hoyle, Chief Executive of the Association of Learning Providers, has said that Freud has suggested as much, and wouldn't it be odd if they weren't, "unless of course any had not been able to cope with the current opportunities". It will be interesting to see whether a provider's record will be taken into account.

No decision has apparently been made about the future of Work for your Benefit.

The new buzzword is "framework". This appears to mean that a number of selected providers will do not only the basic WP stuff but also any other work-focussed services required by other "public service commissioners". How this framework will help to include smaller organisations, except as sub-contractors, is not clear.

Urgent questions

The basis of Emma Harrison's claim yesterday that A4e would be allowed to work with "whole families" appears in a speech to providers by David Freud:

"It will be designed to allow you, the people who work at the coalface, to run your own operations as you see fit and provide more personalised help where that works for the individual," he said, and went on, "If a jobseeker needs intensive support from day one and is referred to you, it will be up to you to decide what support they get. One programme also means you can tackle the collective issues of family members in a coherent way – rather than splitting them up into different programmes."

Harrison cited the IB claimant who is supported into getting a job and then goes home and is talked out of it.

This raises some urgent questions:

• What qualifications will A4e employees be required to have for this work?
• What constitutes a "family"? Is it only the dependants of the claimant, or does it include those who are not themselves on benefits? What about claimants who live with parents and / or siblings?
• If a family member declines to co-operate with A4e employees will the claimant be penalised?
• Will A4e employees be able to access personal information from professionals such as teachers, GPs and social workers?
• What rights to privacy will claimants have?
• Will claimants still have the right to appeal to Jobcentre Plus in the event of a dispute with A4e?

Emma Harrison called this a "massive breakthrough". It certainly has huge implications.

Jumping the Gun?

Anyone watching the BBC's Politics Show in the North today would have to assume that the Work Programme contracts are already done and dusted.

The introduction to the item talked about a "Sheffield company" which was going to do what is already done in Germany, work with whole families. They then looked at Orchard Park Estate in Hull, where unemployment is very high and women say there are no jobs for the majority who want to work.

Cut to Emma Harrison of A4e, even more ebullient than usual. Cities like Hull, she said, need more support. A4e are going to be allowed to work with whole families, isn't that wonderful? The new Work Programme will mean "a massive breakthrough" because of this working with entire families. Cut back to a Hull councillor. who said that the programme was about cutting benefits rather than creating jobs. Back to Emma, who talks about the trap of Incapacity Benefit, and how the "radical reforms" will stop this.

A brief studio discussion followed, in which a Labour MP said that the last government did focus on whole families, and this was just re-badging. A woman from the Taxpayers' Alliance talked about making work pay and the need to create jobs.

So what are we to make of this? The company have been pushing for this "whole families" concept for a long time, and it looks like all that lobbying of ministers which Harrison brags about has paid off. The new government's advisers are oblivious to the dangers of giving the employees of a private company the right to interfere in the lives of families. Presumably where A4e has the current FND contracts they will accept the new, "re-negotiated" WP contracts, and that's why Harrison appears to be jumping the gun. If their clients in Hull want to question the new approach they can always seek legal advise - from the CLAC run by A4e.

A new competitor

We've speculated that the new Work Programme contracts may prove so unattractive to the likes of A4e that they decide to leave them alone and concentrate on other areas of business and on foreign contracts. However, if they do it seems that there are companies waiting to take their place.

One fairly recent entrant is Serco, a British company with fingers in so many pies that one newspaper called it the company that runs Britain. And now another company with its roots in the security industry is advertising for Welfare to Work Senior Management Team and Supporting Roles. It's G4S which says it "delivers services in over 110 countries" and is "the largest private sector employer in the world" in their advert on the Indus Delta site. Rather worryingly, G4S is citing its work with offenders as the basis of its suitability for the welfare-to-work contracts. "G4S already work with over 100,000 offenders and young people each year - transforming their life chances through care, supervision, training and rehabilitation. We want to take that work further. G4S are investing heavily in creating the very best solutions to support the 5.5 million people of working age who are currently on benefits to move from dependency into self-sufficiency and a decent, lasting job."

It's worrying that any company should see those who are not in work as being in "dependency" and in need of the same sort of treatment as offenders. But that may well chime with the ideologues in the goevernment.

That meeting

Some news of the meeting between Chris Grayling (with David Freud, the designer of the Work Programme) and the New Deal providers, from the Carley Consult site. It looks like there will be a new tender process in the FND phase 2 areas, while in the phase 1 areas, where it's already operating, the existing contracts will be renegotiated. The government wants interim contracts to tide them over to the full roll-out next year. Each of the current providers will be able to put their views to the ministers in separate meetings.

One paragraph needs some decoding. "There was a strong preference shown for greater collaboration and partnership, with the inclusion of the third sector and smaller providers likely to be a minimum specification requirement, and effectively ending the notion of sole provider delivery models. The needs of an increasingly diverse customer group, with a growing emphasis on customers on health related benefits, underlined the drive to bring together a mixed economy of provider expertise. Indeed, the direction may see traditional prime provider rivals working on a true consortia basis for the first time." I don't see a great deal of difference between that and what exists at the moment; it just means that the prime contractors have to get more smaller organisations on board before they bid.

Apparently the ministers stressed their commitment to payment only for outcomes, and "some providers continue to seek reassurance that such a model will pay in practice".

"Providers of New Deal to voice concerns"

There's to be a meeting tomorrow, 2 June, between the "minister for work", Chris Grayling, and the body which represents the New Deal providers. That body, the Employment Related Services Association (ERSA) is chaired by Rob Murdoch, who is an executive director of A4e. The Financial Times reports on this today, and says that the providers "have spent millions bidding for the second wave of Labour's Flexible New Deal contracts". It goes on: "Those contracts were put on hold just as they were about to be awarded when the general election was called. But the existing providers also hold contracts under the first wave of Flexible New Deal that run to 2014." Current stop-gap contracts are due to stop taking on new clients next month, and the government wants the Work Programme up and running by April next year. Given that the government wants to roll up all the various existing contracts into one provision and put people on it much earlier, it "implies larger scale contracts", says Murdoch. He points out that if providers are only going to get paid for outcomes, it "has big implications for cashflows". If an organisation has to wait longer for payment, only the biggest companies can afford to bid for the contracts and stump up the money. Murdoch also has a threat for the government. "If they breach contracts, that would be very negative for how the provider market looks at the changes."

This is something which, presumably, the government has thought about. They have suggested in the past that they want to get smaller organisations and the "third sector" involved, but that will only happen if they act as sub-contractors to the big companies.