Saturday, 10 March 2012

"All relationships" - and new contracts

It must be serious, it was covered by the BBC.  The new fraud allegations and the DWP's investigation were reported, albeit briefly, on Newsnight.  Paul Mason put a slightly different spin on it.  As the Guardian reported, the government has launched an audit of 10 other A4e contracts.  Mason takes that to mean that it will ask why A4e was given so many contracts; but I doubt that.  It would have to go back ten years to be credible.
Most of the media add little to the press releases of the DWP and A4e.  The Huffington Post carries the reaction of union leader Mark Serwotka.  The Guardian gets someone to explain how the MWA fraud might have come about.  The Mail is remarkably restrained.
At the same time as all this bad publicity, there is good news for A4e.  As reported on FE Week, it is the "preferred bidder" for 2 of the 9 prison education contracts announced by the Skills Funding Agency.  The SFA is keen to make clear that this doesn't mean that the contracts are signed.  There's a "due diligence" stage to go through before they are finalised in the early summer.  But this will be the acid test of the government's seriousness.  I have had to delete comments from people who know, and are concerned about, A4e's role in OLASS, but some of them may now make themselves known to journalists.
A4e has announced that its new non-executive Chairman is Sir Robin Young.  He was a career civil servant before retiring to directorships, and became a member of A4e's board in 2007.  He begins his statement with the words "A4e's role is to improve people's lives".
Back to the investigation.  The government has said that A4e could have its contracts suspended if it is found guilty of "systemic fraud".  It's that word "systemic" which could prove the get-out for A4e.  It seems likely that the instances of fraud are the result of two factors; the intense pressure in the company to meet targets and make the money, with bonuses for outcomes, team prizes etc.; and a large proportion of inexperienced, minimally trained staff.  But if that is the case, should it let A4e off the hook?


  1. How many times can a company commit fraud before its systemic. Once again they are using its under the last scheme under the last government, A4e has been investigate by the police in slough, for fraud, one person in the past scheme ended in prison, for fraud, A4e has had to give money back to the state for fraud. So if thats not systemic then i am a martians uncle.

    1. "Systemic" means it's built into the system, and I think it's not that. Rather, it's the result of pressures in the system. It's a matter of definition. And I'm saying that the definition may get A4e off the hook.

    2. I agree with you here Historian. Sadly that does seem the likely outcome If the company are left off the hook, would Emma return? (Would she want to?)

      I read somewhere a4e then called Action For Employment first got contracts under John Major. This being the case, shouldn’t the investigations include these?

  2. But the pressures in the system are part of the system. If a4e didnt push for outcomes, and pay bonuses which has always happened.. (isnt that systemic), Even last time they parked and creamed the best outcomes.

    Its the system, from the past schemes run by a4e (shown to be fraudulent), under new deal, flexible new deal. and now this version.. So its ok for a4e to commit fraud if it was under the last scheme..

    If three schemes run by the same company, with the same staff, and the same type of fraud occured isnt that systemic to a4e as a whole. If they use the oh it was the last scheme so we must automatically be absolved of all wrong doing going on from here. that just makes it more likely for fraud to occur as they have got away with it.

    1. Well said The Anonymouse!

      It reminds me of working for a well known retailer a few years ago. Staff members were heavily pressured to foist near useless warranties onto customers. At one staff meeting, I remember on team leader saying "I scare customers into taking out one of our warranties". Whilst the retailer would not have condoned fraud and scare tactics per se, the pressure was on individual store managers, team leaders and shop floor staff to hit targets. That's all that mattered. How it was done was never questioned.

      So whilst fraud and corner cutting may not be built into ND, FND and the WP as part of their policies, conditions the constant pressure to hit targets could easily lead to bad practices. It would appear this is so with A4e.

  3. If the Guardian's description of the latest alleged scam is accurate, it seems to me that A4E's only alleged sin was to create a "win-win" both for A4E and for the person who was supposed to be doing the Mandatory Work Activity.

    The Government seem to be screaming, suddenly, because they don't want this "win-win." They want to punish the MWA participant instead by depriving that person of his/her benefits.

    That seems to me to be the only real reason for the new DWP audit.

  4. Fraud by individuals is just that. You can't say the system caused me to be dishonest and dishonest individuals always leave a company vulnerable. If it is proved to be systemic, that's quite another matter.

    Let's not forget it is part of the Governments policy to both privatise and to pay be results in a time of recession.

    And what about other companies involved? This is a complex business - no pun intended.

  5. But if the business sets things up, that WILL lead to abuse and fraud, then the company MUST take 100% responsibility for it. Wrong is wrong Judi.. If you break the law/rules no matter how "good" a reason you have still broken the law. You cannot cherry pick the rules that you wish to follow especially if you are working under strict contracts written by the DWP. Also a4e should put into place checks to make sure they arent breaking the law. No from what i can see there are no checks with the work programme, Ofsted are not able to go in and check.. (that was one of the contracts clauses)..

    Ok anonymous 7.06am.. Where was a4e when this happened? why wasnt it caught by them, if they didnt know that could be incompetence, if they did know thats collusion and that means the entire group is open to fraud (with nods from the top). Either way is this a company you want to do the job. So if you are under threat of losing your job unless you break the rules, when they are under pressure to push for an outcome however wrong it is for the poor client. Then its ok to break the rules.. Don't forget its the unemployed that are being punished by such schemes, by companies parking and creaming, by companies treating people as just numbers on a box.

    Yes there are some good staff but they are being put between a rock and a hard place.. they want to help, but they are not allowed to do it they are under pressure from a4e.

  6. Regarding fraud. This is somewhat like the trouble News Int'l is in. No one is suggesting that Rebekah Brooks and Andy Coulson PERSONALLY hacked phones. And no one can at all say that Rupert and James Murdoch were PERSONALLY responsible and were involved in hacking themselves.

    However, once it became clear that it was more than just a couple of rouge reporters, others higher up the chain including the afore mentioned became implicated and each of them paid a price.

    Why? Because even if they were not personally responsible for phone hacking, they should been aware or at least understood that "with great power comes great responsibility" to use an oft quoted phrase.

    A4e tried the 'rogue employees' bit in 2009 remember. And as with The Sun and News Int'l, the cancer of allegations (allegations at least at this point) is spreading outwards to infect more and more of the company.

    No one is suggesting that Emma Harrison knew about every scam committed by A4e staff alleged or otherwise. Nor can we say she personally sanctioned any wrongdoing. However, she is responsible for A4e and what goes on within it. The buck stops with her as far as A4e goes. She is still the majority stakeholder and is (or was) the public face of the company after all!

  7. The Anonymouse

    ".....strict contracts written by the DWP." I have never seen a Government procurement contract that was anything other than a complete shambles. Have you?

    1. I don't know how many such contracts you've seen, but the ones I've seen have been pretty tight.

    2. My experience of them (though I was working for another Government Department, not the DWP) was that the contracts looked as if they had been drafted by the third party contractors and just "rubber stamped" by the relevant Department's Procurement people. As in, "We haven't a clue how to make a competent commercial judgement but we'll accept this draft because it contains zillions of words, so it looks convincing even though we don't understand the probable commercial effects of this document."

      The contracts provided that the contractors would do every possible last thing - even though that was often unnecessary and, in some cases, all this "gold plating" actually only put the British Government in breach of its obligations under the relevant international treaties, MoUs etc.

      However, these peculiar documents did ensure that the external contractors would be able to charge the British Government most handsomely for every unnecessary thing that they did.

      My impression was that the contracts that I saw were almost completely one-sided, in favour of the external contractors.

  8. Ok The Anonymouse. Are you talking about the previous Government's programme where A4E and others were paid up front for their work, or now when they are not? It matters because historical stuff is under investigation, but current stuff isn't as far as I am aware. Again I understand it is A4e's internal processes that raised the issue of their employees defrauding them. (That's what the PM said at PMQs).

    The point is that what you say is full of "if". I wouldn't like to have you on my jury. You extrapolate "if" without evidence and say. "Let's hang him. He obviously did it"

    Now if there is systemic abuse sanctioned by A4e, yes, hang them out to dry. It still is more likely that some staff saw a way to enhance their pay packets and that the company was stupidly way behind those putting it in the shit. It often happens. Processes often lag fraudsters.

    As for Government contracts, isn't that why they changed it to paying by result? And finding jobs for anyone in a time of recession and payment on results was a hostage to the unscrupulous surely. It may have been A4e, it may have been rogue employees. For sure I don't know, but as sure, you don't.

  9. I find this situation so frustrating. That A4e senior managers, Emma et al may again get off scott free and leave poor staff members as scapegoats and to carry the can. This type of thing (I am reluctant to call it fraud, historian, as I want you to publish this comment and I know you cannot substatiate it!) goes back years to the contract I worked on in 2003-2006 which was the first ETP Train to Gain contract and Invest In Skills - if anyone from South Yorkshire remembers that contract. There needs to be a complete audit that goes back as far as this, but will have to be rather quick before records are destroyed as I have a feeling that the relevant bodies involved in the contract at the time will not want the audit to go ahead and the papers only have a legal requirement to be kept for 7 years or did back then. I know that this would open more "cans of worms" for A4e but would prove the history and pattern of specific behaviour around public sector contracts going back years. I have written to the Guardian journalist mentioned in your earlier blogs but had no response which is very disappointing. I know that I can provide information that can be substantiated by witnesses and other team members at the time and am more than happy to share my experiences as I feel so strongly about this. It has to has to! Staff have to stop being made to feel under pressure to do things that are morally wrong and the culprits at senior level should be brought to account. I was strong enough to stand up and say no to anything that in my opinion could be construed as not strictly "by the book" but I know others were less so and felt under pressure or were easily influenced/persuaded by greed and large amounts of bonus payments involved. I'm not a conspiracy theorist but it almost feels as if someone somewhere out there manages to act almost like a "guardian angel" for A4e and pulls them out of the fire every time, leaving individual staff members to perish, so unjust :(

  10. That wise dog Snoopy once said, "It isn't whether you win or lose but how you place the blame......"

    I agree with Historian. I doubt whether any evidence of "systemic" fraud will be found. (Personally, I'm sceptical about the idea that the DWP would even look too closely because it would not be either commercially or politically expedient to do so.)

    I think that it more or less goes with the turf that this sort of privatisation of something that should be a public service will be found to contain "wrinkles." However, as long as refunds are paid so that the ledger will balance, I doubt whether Ministers would be interested in anything else.

    Which does seem to leave some of the staff in some of A4E's offices in a horribly exposed position, to judge from the recent case of 4 members of A4E's staff having been arrested etc. It seems that many of the staff feel that they cannot rely on loyalty from A4E.

    The Government will not get involved with that question. What goes on between the Board of a privately-owned company and its staff has nothing to do with the Government.

    If I were employed by A4E, I would leave the company as soon as possible. If I don't feel that I can trust my employer to be loyal to me when push comes to shove then the employer is on his own as far as running his business is concerned, in my view.

  11. Just a thought - is it not possible that the audit may not find evidence of 'systemic fraud' because it simply may not be there? Is it not possible that it really has been a few greedy staff members that have broken the rules rather than a company full of dishonest crooks? Maybe these people are the wrong-doers and not the scapegoats that some here are painting them as?

    I suspect that even if these independant audits find no evidence it will be marked down as a political whitewash and the allegations will continue unfounded.

    Perspective and a sense of proportion need to be exercised here. Guilty when and if proven, not before.

    It is right and proper that A4e are investigated - as should all welfare to work providers be. Let's wait and see what the result is though.

    1. Mmmm. I *hear* you, certainly. I am also not convinced that the alleged scamming is solely down to A4E. My suspicion is that if A4E are up to it then probably all of them are.

      That said, A4E do seem to me to be peculiar. How come they seem to be attracting more flak than any of the others? FAR more flak?

      Do people like Margaret Hodge MP harbour a strange and irrational suspicion of A4E, or is Mrs Hodge right to be suspicious of this one company in particular?

      It is generally true that there is no smoke without fire. The suspicions are not new - they go back to at least 2005 since when, we are told, the DWP have investigated A4E on 9 separate occasions and on at least 5 of the occasions, A4E seem to have been forced to repay public money to the Government. Some of the smoke has evidently emanated from fires, I suggest.

      Why has this been happening? What is wrong with the way that A4E is managed? A well-run company - relying (as A4E does) on public money and on the fact that A4E exploits (for its own profit) some of the most vulnerable people in society - can usually be relied on to ensure that there is never even a hint of scandal about the way that it runs.

      So what is "different" about A4E?

    2. I suspect Margaret Hodge may well harbour a considerable grudge! A4e was labours darling for over a decade and defected to the Conservative/Lib Dems very happily, badmouthing the older contracts as they did so. I think that is more than sufficent to stir up ire!

      To be honest, the reason A4e are being targeted as much as they are in the media is probably down to Emma Harrison putting herself in such a prominent position. She painted a target on her head and they have gone for it. Reap what you sow and all that jazz. Who are the CEOs of G4S for example?

      As to the DWP investigations - are you implying that no other providers have been investigated? I can assure you that is not the case, indeed A4e have actually been investigated less than many others.(As has been noted by others on this site)

      I'm in no way suggesting that a4e are blameless and without fault but it is important to have a sense of proportion and balance. If A4e are found to be rife with fraud then they must certainly pay the price butlet us wait and see if that is the case first. Also, lets look into the other providers as well. As you say, if one is doing it, it is likely that they will all be.

      What's 'different' about A4e? Very little in practice would be my suggestion. What's 'different' in real terms? They have made themselves a target by being so high profile.

  12. How can agencys advertise jobs that dont exist in jobcenters? ive phoned up many only to be told to sign up with the agency, then told the job i applied for is gone! is this legal?

    1. It shouldn't be legal, but apparently it is (until someone challenges it). It's been going on for years. The "vacancy" is just a come-on to get you to register with the agency.

  13. Having just recently been unemployed, i did not know of such a scam. a seemingly ideal job that never existed, its plain lying to people.

    1. I agree. I knew that there are scams around but I didn't know that evidence of the scams can be found on the Job Centre's own 'job-vacancies' computer. God knows how many "jobs" I have applied for via that in the belief (evidently mistaken)that they were real adverts for real vacancies.

      This "watching A4E" website is teaching me new things every day, I am discovering. Thank goodness somebody is bothering to do some real teaching, I feel.

    2. Judi, this is nothing new I'm afraid. I have applied for a number of vacancies via the JC. Only to find out they are phantom jobs placed by agencies.

      It went something like this:

      Me: Hello, I'm phoning about the vacancy for the data entry position you have advertised.

      Agancy: Sorry, the vacancy has been filled. But can come in tomorrow morning and register with us if you like. (so obviously an agency)

      Me: Ok then, thanks. (thinking someone had beaten me to the position)

      Two weeks later, the SAME vacancy is still being advertised on the JC job points.

      Me: Hello, I'm enquiring about the data entry position you've had advertised for a couple of weeks now. Last time I phoned, I was told the vacancy had been filled. Is it still available or not?

      Agency: Sorry, It's a mistake. That particular vacancy should have been taken off the system.

      Another two weeks later on, the VERY SAME vacncy is still on show!

  14. Judi said:

    "That said, A4E do seem to me to be peculiar. How come they seem to be attracting more flak than any of the others? FAR more flak?"

    I think the answer is, or rather was, obvious. The personality of Emma Harrison and her decision to pay herself a large dividend attracted all the attention first of all. It's just a hop and a jump to then extrapolate into wrong doing.

    "Do people like Margaret Hodge MP harbour a strange and irrational suspicion of A4E, or is Mrs Hodge right to be suspicious of this one company in particular?"

    Well yes, but it isn't just A4e. Margaret Hodge is a peculiar choice as PAC Chairman. She is vitriolic in her opposition to private sector involvement in these kind of areas – and not just DWP. She opposes this government's and the last government's privatisation programmes and any involvement of the private sector in delivering public business. Hers is a personal and partisan crusade, rather than examining VFM on behalf of parliament. She is a bit of an oddity of course being a multi millionaire's daughter and also being Lady Hodge through her husband. A bit of a grandstander it seems.

    "we are told, the DWP have investigated A4E on 9 separate occasions and on at least 5 of the occasions, A4E seem to have been forced to repay public money to the Government."

    Probably bound to do so by contract or whatever. And it was individuals that were investigated, usually I understand by A4e fulfilling their obligation to tell DWP when they discover misconduct. 9 out of goodness knows how many is nothing in the great scheme of things. These are huge contracts involving hundreds of thousands of people.

    If there is any evidence of systemic fraud, then that's quite a different matter, but I bet there isn't any such evidence, because there won't be any systemic fraud. The DWP wording sounds severe, but it is standard to say “we won’t hesitate etc.”

    "So what is "different" about A4E?"

    Nothing really except Emma Harrison's shameless publicity seeking brought them to the fore. They are probably no more exploitative than any private sector company making a profit out of public sector business. Every private sector contractor "exploits (for its own profit)". Name of the game I'm afraid. Now whether or not the principle is wrong is a different matter entirely.

    Though Emma attracted the fire in the first place, she isn’t alone in being rich and famous and involved in delivering the WP. If you want to look at other companies delivering the Work Programme, how about Ingeus who run three of the area programmes (A4e run 5)? Owned by the wife of former Australian Prime Minister, Kevin Rudd.

    You need money to do all this at your own risk it seems and nothing is simple where money is concerned

    1. I am getting more than a little fed up with all these anonymous contributers. Please get yourselves a pseudonym; it doesn't identify you in any way.
      On this particular point: it does your otherwise fair argument no good to attack Margaret Hodge. She was elected as chair of the PAC and has been doing an outstanding job, as far as I can see.

    2. Fair enough - I will use a name from now on.

      Mine is not the comment to which you have replied but I feel I must react to your assertion that Margaret Hodge is doing an 'Outstanding Job' PAC chair.

      I couldn't disagree more. I feel that she has proven herself seriously mis-informed about key issues in the meetings that she has chaired and this pantomime about a4e that she has caused is another example of poor work. She points to the poor perfomance of A4e on various contracts (usally reporting incorrect figures) and demands they are investigated but makes no such request of other providers whose perfromances and practices are equally deserving of investigation.

      Its populist pandering at its worst and is serving only to help other companies hide their secrets. We need to focus on a widespread investigation into Welfare to Work in order to ensure changes are made where needed.

      By putting all her focus into A4e, Hodge is potentially missing the bigger issues. That is not doing a good job.

      Sorry to disagree so passionately, I agree with much that is written on this site but cannot agree with this comment.

    3. "Seriously mis-informed"? Let's go back to the meeting which investigated the failure of the Pathways to Work contract. The PAC had representatives from Reed and A4e and castigated them (both of them) because their record was so poor, and worse than that of JCP on the same contracts. The latest expressions of outrage were over the amount of profit made by A4e.
      I'm putting an end to any more comments about Margaret Hodge, simply because this blog is not about her, and I don't want it veering off. As for putting too much focus on A4e; I think you will find that it spreads. But you have to start somewhere.

  15. "I am getting more than a little fed up with all these anonymous contributers. Please get yourselves a pseudonym; it doesn't identify you in any way."

    I'll second that. It makes it very difficult for the reader - obviously

  16. If one gets a job under ones own steam 2 days after being mandated to A4e does A4e still gets paid the £400 referall fee. Do they also get paid the 'sucess' fee ?

    Are you lumbered with their monitoring during the length of the Work Programme contract ?


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