Tuesday, 5 April 2011

Toynbee article. And why it matters

There's an excellent article by Polly Toynbee in the Guardian, looking at the "benefits bonanza" of the Work Programme contracts. She points out that the big winner, Ingeus Deloitte, is run by a former director at the DWP, and that the company underbid the other providers to a worrying extent. She expresses surprise that previous performance is not taken into account, talking about the failure of A4e and Reed in the Pathways programme. We have pointed this out before, and it continues to startle people that a company can bodge one contract after another but still get the business. Toynbee asks why the providers would want these contracts now, and says that there are two reasons: "in previous contracts when they ran out of money they ganged together, demanded more – and got it. The government had no option. Not one company has ever been terminated for missing its targets. So price is flexible. The other reason is that these contracts are small beer, loss-leaders for large companies with their eye on massively lucrative future contracts in the great Cameron outsourcing bonanza."
But why does it matter if a private company provides a public service? Who cares. as long as it's provided efficiently and cheaply? Successive governments have taken this view, and David Cameron has been explicit about it. There is a market place, and the private sector can compete with the public sector to deliver the goods. Those of us who question this philosophy are regarded as socialists (a dirty word) or stupid. But I'll try to explain why it matters.
If my local council decides to contract out the maintenance of its housing stock, that would seem to be simply a matter of getting the best deal for council tax payers. But there are problems. Council tax payers won't be allowed to know how much it's costing, because the contract is "commercially sensitive". One firm may under-bid to secure the business, buying up its competitors, and then go bust, leaving my council to pick up the pieces. A contract may turn out not to serve the interests of residents, but can't be re-negotiated. One could regard these as matters of practicality rather than morality.
There are areas, however, where questions of morality are inescapable. There has always been a market in healthcare and education, the result of people being able to buy their way out of public provision. When it seems that the public provision may disappear altogether, in favour of the market, there are protests - too late. Three areas remain where many citizens expect, and assume, that the market should not operate, even as it takes over; areas where the commodity is people: offender management, advice services and welfare. Private prisons have been in existence for years; a few days ago it was announced that Birmingham jail was to be contracted out to G4S, the first time that a publicly-run prison has been sold off. Another jail is to be run on a payment-by-results contract; the private firm will get paid for the number of people it can keep from re-offending. Advice services used to be run by not-for-profit organisations like the CAB; deliberately so, because it was thought that such services should be clearly distinct from government. Now they are sold to the highest bidder. And, of course, there is a thriving market in welfare-to-work services. In these three areas, people in need of help are sold for private profit. They cease to be citizens, part of society with rights and responsibilities in a public space, and become objects in the market place.
I know this is a dialogue of the deaf. Growing numbers of people have been persuaded that the services used by other people (rarely by themselves) can be a matter of private profit, and there are no practical or moral objections to a few people getting rich from the public purse. To them, I would recommend the book Consumed by Benjamin R. Barber.


  1. It will all backfire, hopefully soon .....

    As for the new website for Startups ..... I was expecting to find Emma on the About Us page. I did, not our Emma but rather an Emma Jones. Of course I realise that she could still be there undercover. lol

    Goodness Historian still only lunchtime! What more is to be revealed today I wonder?

  2. Hello, found your blog mentioned in comments on the Toynbee article (which is fortunate cos the Comments are grotesque).

    I recently saw this advert on the Do-it Volunteering website:

    Why are A4E advertising for volunteers to mentor JobCentre Plus clients who have been unemployed for 6 months or more?

    As the advert says "It would be desirable for volunteers to have job search skills and an awareness and understanding of the causes of social exclusion".

    Why the hell don't they spend some of the huge government contract funds on employing some mentors??


  3. When you were/are about to join a4e under FNSD/Work Programme there was/is someone from a4e at The Job Centre to introduce you to the scheme and to do the admin. Before The Work Programme it was an a4e employee

    a4e as part of their remit has always had mentoring ie you were/are assigned an Adviser for a year who said at the onset, they would get to know you on your journey with them and your needs ..... Really? I learnt more about my Adviser rather than he/she about me!

    Now a4e have fewer paid staff, maybe they are simply looking for admin volunteers rather than mentors ..... or if mentors, a4e are shirking some of their workload and not even paying for it .....

  4. Simone,

    Thanks - I haven't had a chance to fully explore your blog. As somebody who works in vocational services at a large mh nhs trust, would you happen to know how I could go about asking E>harrison HERSELF to explain the employee / volunteer interface? Obviously I see the benefits of volunteering everyday - but would quite like her thoughts....

  5. I am not really sure that I understood your post Anonymous. Sorry. Maybe my leg is being pulled! Anyway Emma can be contacted emmasblog@a4e.co.uk

  6. Anon I fear Her Ladyship Emma might not be familiar with the term "interface". Now if you were to include the phrase "doing good" in your email to her I'm sure you'd get a better response

  7. Fraudulent payments were made for false outcome claims made under the New Deal programme. The flexible New Deal programme was just a rebranding exercise coupled with a different payment model. The Welfare to Work programme is little more than a continuation of the same failed provision. For the first few years, providers will still get an upfront attachment fee topped up with small outcome bonuses. In later years, the attachment fees will be phased out in favour of higher outcome based payments.

    No checks will be made as to the quality or suitability of the provisions beyond a handful of Ofsted inspections. Nor will there be any real accountability. With the contracts being handed out to a small number of large companies, small providers with local knowledge and expertise have been squeezed out. The end result is the "clients" will be nothing more than commodities to be sold on to who ever is willing to accept them at the price set by the likes of A4e & Serco.

    It may be that these contracts have been negotiated in such a way that the providers are assured of failure. Succeed or fail, the mainstream press certainly needs to highlight just who is going to get the most out of these contracts - It won't be the taxpayer, and certainly will not be the "client".

  8. Re the link on the right, I was curious to see just who G4S are and found this on their website ..... Unbelievable!

    Who we are

    G4S is the world's leading international security solutions group
    From risk assessment to delivery, we work in partnership with governments, businesses and other organisations to provide integrated solutions to security challenges.
    Our heritage goes back over a century and, with more than 625,000 employees, we are the second largest private employer in the world. 
    We protect rock stars and sports stars, people and property, including some of the world’s most important buildings and events.
    From advising on stadium building plans to crowd control and ensuring event tickets are not forged;
    From delivering pay packets to ensuring ATMs have enough cash to meet your shopping needs;
    From delivering cash to bank branches and retail outlets to managing the flow of cash for central banks and major retailers;
    From ensuring travellers have a safe and pleasant experience in ports and airports around the world to secure detention and escorting of people who are not lawfully entitled to remain in a country;
    In more ways than you might realise, G4S is securing your world.

    What then exactly qualifies them for a Work Programme contract?

    I(ncidentally when I was in Holland Park yesterday, I noticed three, yes three people in blue tshirts clearing rubbish in a five metre stretch of path. They worked for a aprivate company for the Council ..... )

  9. Now you mention that, Simone, I have seen folks dressed in regular clothes working on bin lorries. In fact no-one working on the bin lorries is identified as council staff. I far as I can recall such persons used to be always dressed in council garb and clearly identified as such. Who are these people? Are they "working with the Council"... for free à la a well known supermarket.

  10. Many local councils contract out their waste collection to private companies - nothing sinister.

  11. These t shirts had the name of the company on the back but I did not note it. I would have if it was Waitrose, well maybe!

    I had asked them if they were volunteers and the reply was as I said above they were paid employees of a company contracted to the Council but volunteers were also used. Whether they meant by the park or by the Council ..... pass


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