Give that man a bonus!

Just listening to Radio 4's Any Questions programme, debating the benefits cap. David Blunkett on the panel said he wholeheartedly supported the Working Families Everywhere programme - without disclosing the fact that he is paid by A4e. Well done, David.

Round-up, 27 January 2012

A few points from the week's news.

First, we read that A4e aims to get in on the legal services market. An article on the Legalfutures site describes how the company wants to enter the market which is being opened up to firms which are not the traditional legal service providers. "Chris Peel, A4e’s director of advice services, told a report published yesterday on new thinking in legal services: 'The reason why we are keen to expand on our traditional socially excluded client base is that if you look at our core business – getting people back into long-term sustainable employment – we are contributing to the “coping classes”. We’re shifting people out of legal aid eligibility. It’s a natural extension of our offer.' " They would partner with law firms, as they do now, and their existing advice services would seem to be a natural basis for the new business. However, one of the advantages of working with A4e which Peel offers is worrying: “a route to the market through diagnosing the needs of existing customers”. Does that mean that people who go to A4e-run advice services will be referred on to the paid-for A4e legal firm? It would be a big step for A4e. Instead of getting its cash from the public purse, as now, it would be making profits directly in a competitive market.

Second, Mark Lovell is using the Huffington Post site as a vehicle for him to contradict the prevailing view. This month he's talking about the plight of voluntary sector subcontractors, organisations which have been complaining that they're not getting the referrals and they're not getting paid. Lovell says that "we directly protect our Specialist Intervention partners by removing PBR requirements". A4e doesn't pay them to achieve job outcomes, but to provide specialist services.

Thirdly, back to whether the Work Programme can work. The Guardian has a blog piece by Paul Swinney which provides some interesting statistics showing the vastly different unemployment situations in different regions. He argues that there must be a "geographic angle" to the WP. Two reports from the North West of England (where A4e has a WP contract) show the particular difficulties. One from Wigan gives what it calls "shocking figures" and says that, "Only 23 per cent of those attending the work programme do not have any barriers to finding sustained employment. More than 44 per cent have two or more barriers in their way to finding a job." Now, we could argue about what "barriers" means; after all, we know that the biggest barrier to getting a job is being unemployed, and mental health problems are often brought on by unemployment. But the point is being made that there are local factors which have to be addressed. The other piece, on the PublicFinance site has major implications for WP providers. Liverpool is likely to have a directly elected mayor, and in the agreement being drawn up with Whitehall the mayor would "take greater control of the government’s flagship back-to-work scheme". They want an expanded scheme in which "unemployed people would be supported for longer with the aim of ensuring they gain a qualification. Jobcentre Plus would also be given more autonomy in the city." Where would that leave the providers like A4e?

Strange figures

I'm puzzled. While the projected figures for the Work Programme are being questioned there are contradictory figures being put out for the performance of Flexible New Deal. On the one hand, there's the document put out by the DWP which we mentioned the other day,entitled "Ad hoc analysis of Flexible New Deal costs" dated January 2012. This gives a table of outcome statistics which shows 407,690 starts (excluding re-referrals) and 49,740 sustained jobs of 26-30 weeks, over 16 hours a week. That's 12.2%. Isn't it? But in response to a question from Stephen Timms MP, Chris Grayling provided, on 20 January, a table of results broken down by provider for jobs lasting 3, 6, 9 and 12 months. And the 6 month figures average to 16%. A4e averaged 15% over its 5 contracts. So which one is right?

You might say it doesn't matter much, since even the larger figure is appalling. But then let's look at a piece in the Guardian by Ian Mulheirn, director of the Social Market Foundation. He points out that for the WP the "non-intervention performance", i.e. the figure the DWP estimates will get jobs without any input at all, is 30%. Just think about that. And ask why the WP is being promoted as the solution to everything. Leave people alone and 30% will get work.

I don't normally bother any more with the daft advice given by Hayley Taylor, that most famous of A4e's alumni, but the latest question-and-answer on her site makes me cross. A 59-year-old, very experienced in admin, IT, management and as a JCP advisor has applied for lots of jobs and got some interviews, but hasn't found work. What should she do? Taylor says, " I think to remove any dates that relate to your age being worked out by a prospective employer is something I would reccomend." I know we've argued about this before, but how on earth do you keep dates out of an application form? And how do you construct a CV which gives no clue as to your age? Anyway, says Taylor, you're getting interviews so you must be doing something wrong at the interview. "Work on this area and I feel you will suceed." So it's this poor woman's fault. How helpful. It couldn't just be that they pick somebody younger, could it? I'd like to think that there was better advice being dished out by WP providers, but somehow I doubt it. By the way, there's a film on Vimeo called Hayley's Top 5 CV Tips. I can't bear to watch it.

It won't work

It's in all the papers this morning; a damning report on the Work Programme by the National Audit Office. The Telegraph reports it straightforwardly. It says that only 26% of those referred to the programme will get work, not the 40% forecast. "Fewer people than expected are being referred on to the work programme in the 'harder to help' category, as providers scramble to cover upfront costs by helping the easiest set of jobless back to work, such as the highly qualified or experienced, to ensure they collect money under the contracts." Some providers will get into serious financial difficulties. The government paid out £63 million to terminate the FND contracts, only to give the WP contracts to the same companies. The Financial Times points out that some companies offered price discounts to get the contracts. Not surprisingly, the industry says it doesn't recognise the figures. And Chris Grayling says it's all guesswork, and it's all right because it's the companies which are taking the risk, not the taxpayer. No, Mr Grayling, it's the unemployed who are taking the risk. He also says that the providers will be able to release "limited information" before the official release of data in March; so watch out for loads of spin - numbers of job outcomes without any start figures. What's important about this, of course, is that the government is waving the Work Programme as the solution to everything, especially in its determination to reduce welfare benefits.

No one has yet related this to the release of figures for Flexible New Deal by the DWP. They show that the total cost (money paid out to providers) was £770m. The percentage of "sustained" jobs to number of starts was 12.2%. Yes, just 12.2%.

Do you remember an exercise you used to do at school called "comprehension"? You had to read a piece of text and then answer questions to show you'd understood it. Well, if you were any good at that you might like to try reading a submission A4e made to the Communities and Local Government Select Committee on community budgets and tell me what the point of it is.

People helping people?

Emma Harrison hasn't been much in the media lately. Perhaps questions about A4e's profits would be embarrassing. But her pet project, Working Families Everywhere, is still alive in a few places, and Emma has been in Poole, Dorset, where the council took on four "family champions". The write-up in the Bournemouth Daily Echo is a classic of spin. We learn that Harrison was "appointed by David Cameron to spearhead People Helping People". That's obviously Harrison's name for it, not Cameron's. She visited a children's centre and said, "There are jobs out there." Well, that's encouraging. A couple of long-term unemployed are quoted, keen to get back into work, and one says that people don't know where to start. Which, of course, begs the question of what the various expensive schemes run by A4e and others have been doing. But the confusion about Harrison's project is evident. One woman says, "We need to get everybody back out into the community and helping each other" Harrison has implied before that if you can push people into volunteering you've succeeded in making them "working families". You haven't, of course.

There's a continuing chorus of complaints from the voluntary sector about their role in the Work Programme. They don't like the "cherry-picking" which is going on and means that only the hardest to help are being referred to them. And they don't like having to wait for months to be paid what little they can earn. Chris Grayling's response is to tell them that they signed contracts and knew what they were getting into. Which is more credible than Iain Duncan Smith's assertion that his welfare cuts are about helping people rather than punishing them.

A4e's accounts - revelations

The Telegraph has just published an article headed "A4e pays £1m to former chief executive". That was the pay-out to Robert Martin, who left A4e in September 2010 after 3 years with them. The million was on top of £304,000 remuneration. The Telegraph has had a good look at the accounts, which show that A4e's top management got £4.7m and the company also paid out £11m in dividends. (Since Emma Harrison owns 85% of the shares that's £9.35m to her.)

It's well worth reading the article. The paper has kept a neutral tone but the facts are all there.

Update

Two brief updates. The first is about Cait Reilly, the young woman who is challenging the system of forcing people to work for their benefits. The Guardian has published an article by her explaining the background and her reasons. I gather that such well-informed social commentators as Jan Moir and Vanessa Feltz have turned their guns on her. There's a vast number of comments under the article, of course. Where would we be without the Guardian and Private Eye?

Secondly, A4e has responded to the barrage of criticism about the role of the voluntary sector in the Work Programme by publishing a number of testimonials from their partners. It's on one of their many websites, A4e Voice.

A test case

A young graduate called Cait Reilly is pursuing a legal case against the government which will be of great significance to all unemployed people. Read the story in the Mail Online first. Her case is that it was against her human rights to be forced, on pain of losing her benefits, to work for two weeks at Poundland stacking shelves. This meant that she had to stop volunteering at a museum, in a role that was related to the work she wanted to do. The comments which follow reflect the lack of sympathy of Mail readers, and the thuggishness of many of them. Then read the version in the Express. They have brought in Tory MP Philip Davies who was a senior manager at Asda, having worked his way up from shelf-stacking. Unsurprisingly, he is gung-ho about the system. There is a statement which no doubt the case will challenge: "Anecdotal evidence suggests Poundland is one of the best employers at converting work experience into jobs." The lawyers "are understood to be fighting separate rules under which the long-term unemployed can be required to do up to six months’ unpaid work. Her solicitor Jim Duffy said: 'The Government has created, without Parliamentary authority, a complex array of schemes that allow job centres to force people into futile, unpaid labour for weeks or months at a time.' "

If I had to bet on the outcome, I would think she will lose. It will be argued that the scheme she was put on by the Jobcentre, the "sector-based work academy", was voluntary and she knew what she was getting into. Anyway, the government can't afford to lose this one; too much hangs on it. Ironically, the Independent carries a piece about the firms (including Asda) which have signed up to new rules about interns. "The Government is sending out new guidance saying interns who do 'real jobs' must receive at least the legal minimum." Wait for the twist of logic which says that it doesn't apply if you're claiming benefits.

Bumper year for A4e

£15 million - that's the pre-tax profit enjoyed by A4e last year, up by a third on the previous year. Revenue increased from £190.1m to £234.3m, and it was the company's most successful year ever. "Welfare to work" contracts account for about half of that.

Has the tax-payer had £234.3m worth of value?

Andrew Dutton - and those "workshy" figures

Andrew Dutton, A4e's group CEO, has written a piece for Director magazine which deserves careful scrutiny.

He starts by saying that "Businesses have a moral obligation to get the long-term jobless back into work", and continues that it disappoints him "that there is a genuine view that the unemployed are workshy and feckless. They simply are not." Good. I couldn't agree more. How has that perception come about, I wonder. But, according to Dutton, firms which have an online application process automatically filter out unemployed people. That's chilling if you're desperately looking for work and being told that you have to make a minimum number of applications. "Directors tell me," says Dutton, "they have a bottom line to hit and because they need the best people, dipping into the unemployment pool isn't what they want to do." So far, we can applaud his honesty. He is exhorting companies to shed their prejudices and work with A4e to "cut their costs of acquiring new employees and be more certain about getting someone who is more culturally aligned to the business." (I'm not at all sure what that last phrase means.)

But there's a paragraph which is questionable. "While it is true often that the long-term unemployed have barriers that do need to be overcome – confidence, low self-esteem, mental health or childcare issues –companies like ours clear those obstacles long before candidates go in front of an employer." How often is often? It is true that a good advisor can motivate people who have lost confidence; but what can they do about mental health issues? As for childcare - well, Hayley Taylor, who learned her trade with A4e, recently advised someone who was worried about childcare that she should never mention this to an employer and worry about it only when she was offered a job, at which point relatives and friends would step in to help. Perhaps that's how you clear the obstacle.

Dutton is straightforward about the fact that A4e is a business, not a charity, and describes the payment model. He wants employers to demonstrate some corporate responsibility and start employing the unemployed. No one could quarrel with that. But at the coalface, as advisors try to get people into work (are they still on commission for job outcomes?) doesn't it reinforce the suspicion that providers have every reason to focus on those who have been unemployed for the shortest time? And what mention is there of "upskilling"? The longer someone is out of work, the more outdated their skills and experience become. Unless A4e and the others are prepared to fund relevant training Dutton'e exhortations will probably be ignored.

Back to that piece in the Daily Mail and the Express which stated that 50% of claimants had signed off or not turned up for MWA and justified the description of "workshy". The FullFact website has examined this claim. The DWP told them that it hasn't released any figures. The only attribution is the Mail's "a source close to the programme". So it's worthless and malicious propaganda. Surprise, surprise.

50% are workshy?

There's an article in the Express today which raises some interesting questions. You have to get past the headline "Workshy are Exposed" and get to the figures (which are suspiciously round numbers). "A report has revealed that 20 per cent of people ordered to take part in a four-week community project scheme stopped claiming state handouts." Translated, I suppose this means that 20% of those directed onto Mandatory Work-related Activity signed off rather than comply. Then, "Another 30 per cent of people in the pilot project were stripped of their £67.50 a week unemployment benefit after failing to turn up." Which adds up to the "half of people claiming unemployment benefit (who) would prefer to lose their benefits than take part in unpaid work". That's a big saving on the benefits bill.

Assuming that the figures are more or less accurate, what's going on? I know that when I was unemployed I would not have had a choice; I could not have foregone my unemployment benefit without rapidly becoming homeless and destitute. Clearly some people are not in that position. I have met people who were "signing on" even though they did not need the money. They were being kept by someone else, or they had enough money to tide them over. They signed on because they wanted their NI contributions paid, and because they could. I met others who were almost certainly working in the black economy. Yet even these didn't drop out of the New Deal 13-week programme, and some went on work placements. So what's going on? Your thoughts please - but note that I won't publish anything that simply rants against the system. We can take that as read.

Turf Wars?

We reported back in October that the winners of the contracts to use ESF money to tackle "entrenched worklessness" had been announced. Why, then, has it taken until today for the government to put out a press release about it?

The basic details come in a piece from the Press Association. It is announced as a coherent scheme to "be delivered by a mixture of public, private and voluntary organisations which will be paid by results" but is still confused about the distinction between the "£448 million for councils to send in trouble-shooters to such families over the next four years" and the new £200 million ESF money going to the private companies. It will be payment by results. The news media, as usual, have put their own spin on this basic announcement, without doing any research of their own."The Daily Mail, bless 'em, have the headline "Charities and private firms to be paid £15,000 to turn around each 'Shameless' family". The excuse for that, apparently, is some rubbish on Channel 4, and the Mail is determined to make the label stick. The piece focusses entirely on the new contracts, and they say that "Providers will be paid in three stages – when they have made a member of a troublemaking family sign up to a personal action plan, when the plan is completed, and finally when the individual has moved into employment. In total, a three-year contract will be worth up to £15,000 per family." The Telegraph has a more measured approach, and point out that 40% of the money is an "attachment fee" when the family sign up. (That's £6,000 before doing anything.) The BBC, striving to be neutral, says, "Eight specialist welfare-to-work firms have been appointed to help individuals overcome barriers to getting a job and staying in work. These include skills like timekeeping, writing a CV and job interviews."

What no one is explaining is how all these professionals are supposed to work together. The local councils have taken on, or redeployed, people to work specifically with these "troubled families"; some of these people are the remnants of Emma Harrison's "family champions". Now there are private companies involved as well. Are there going to be two, at least, people fighting over a family to claim the credit and the payment? How sad that A4e won't be involved.

What's in a name?

A4e gets a mention in a piece in the Guardian about a school in Middlesborough which has been teaching kids how to set up and run businesses. A4e's role, apparently, was to co-ordinate the programme. Trouble is, the writer, Patrick Kingsley, initially described A4e as a "social enterprise". Someone quickly pointed out that it is not a social enterprise but a "straightforward, profit-making business". And to give the Guardian its due, they changed it straight away - to "social purpose company". But the Guardian has made this mistake before, so it shows how the wrong description has stuck. The official definition is: "a social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners' (DTI, 2002)." Clearly A4e doesn't fit that definition. But to call it, instead, a "social purpose company" (apparently Emma Harrison's idea) is to deliberately fudge the issue.