Saturday, 17 March 2012

The debate which isn't happening

A story that made the mainstream media the other day is about a company called ALS and the contract it has to provide interpreting services to courts.  Nothing to do with A4e, you might say, but bear with me.  ALS has made a pig's ear of the contract.  Interpreters are refusing to work for them and people like judges and magistrates are very cross about it.  The minister responsible, Crispin Blunt, was interviewed on the Today programme, and Evan Davies asked him, several times, "Did you pick the cheapest bidder?"  Blunt was reluctant to answer, but eventually muttered that ALS had been the only company which could bid.
Blunt's admission is confirmation, if we needed it, that privatisation has been conducted as a cosy arrangement between governments and a very small number of private businesses.  Some years ago a Labour minister was questioned about another failed IT project.  Why had it been given to a company which had messed up several previous such contracts?  He admitted that it was the only company in a position to bid.
When the government decides to hand a service over to the private sector it often does so in discussion with the businesses likely to profit.  Initially there may be several companies and organisations willing to bid.  But it's an expensive process.  And when they see that one company is the chosen one, getting all the contracts for reasons they can't fathom, they drop out, and may well go out of business.  When A4e started scooping up all the contracts, the competition fell by the wayside, so that A4e, with its army of bid-writers, reigned supreme.  We heard recently about a council, Devon, which is outsourcing its core children's health services.  Local charities including Barnardo's, along with the local NHS trust have put in bids, but the contract is likely to go to either Serco or another private company, Virgin Health.
It soon becomes obvious that contracts are being designed in collaboration with the companies which will benefit from them.  Whether this happened with privatised New Deal we can't be sure, but it was certainly the case with FND.  The Work Programme shows how helpless government then becomes to oppose the companies.  Only the big companies could bid.  It was supposed to be strictly payment by results but isn't; an "attachment fee" was negotiated by the companies.  But you won't hear about that from ministers.  The extreme case is that of A4e getting the contract to design future contracts for which A4e can bid.  A single company can secure a monopoly in a particular niche.  A4e's involvement with direct payments for social care quickly became such a monopoly.  If a local council decides to outsource this service there is nowhere else to go.  A procurement process which states that past performance can't be taken into account enables the companies to bodge one contract after another.
Those business leaders who are making the most money from outsourcing are very close to government.  Most of the time the public know nothing about this, so Emma Harrison has done us a service by showing just how dangerous this can be.  
Naturally this view is not shared by everyone.  It has been difficult in recent weeks to find apologists for A4e, but one shows how a narrow perspective ignores the bigger picture.  It comes from an organisation called Arrival Education, a social enterprise which is sub-contracted to A4e on the Work Programme.  The author accuses the rest of us of "binary thinking", seeing the world only in black and white.  He (if it is a "he") is clever enough to see the nuances.  And so we have been grossly unfair to A4e, guilty of hatred and bile and making A4e into a pantomime villain.  It gets even more sanctimonious thereafter.  He defends A4e because the allegations relate to individuals, not to the company.  He's not that keen on Harrison herself but tells us all to grow up.  This is clearly someone who has no knowledge of the history which underlies the current situation.
A more thoughtful contribution comes from the Institute of Economic Affairs, one of those "think tanks" which provide cover for politicians.  It argues that the scandal surrounding A4e does not in any way invalidate the marketisation of public services.  And A4e is not, in welfare-to-work, a "market actor" because it is commissioned and paid by government.  The piece concludes that local commissioning and funding would be better.
There is no sign of the debate which really needs to take place.  Do we want the country run by a combination of Serco, Capita and G4S, with A4e a junior partner? 


  1. The problem with outsourcing is that by its very nature, some companies get bigger and the government more dependent on them. It happened in IT years ago and is by the nature of the beast, what is going to happen. To some extent, a large extent in fact, it suits both sides, like that fact or lump it. Whether it provides VFM is a different matter.

    Winning companies develop strategies to keep winning (that's what capitalists do), they get better a writing bids and get better at beating the opposition because of their incumbent knowledge. And much more. Some of them, shock, horror, are actually very good at what they do.

    I agree with you when you say "A procurement process which states that past performance can't be taken into account enables the companies to bodge one contract after another." If you have a flawed procurement policy, then things will get a bit more hard to police, but the old level playing field bit and competition rules dictate a lot of what can and can't be done.

    As it happens though I think whoever wrote the piece from Arrival Education is more or less spot on. The binary thinking part comes not from trying to hold A4e to account, but in trying to make facts out of pre disposed suppositions and a failure to be concerned about the overall system and how that dictates what companies do.

    Back to Arrival Education. It would seem to me to be complacent to dismiss someone actually involved in the WP on the basis that that they can't possibly be saying good things about A4e.

    You do seem to be coming round to the wider picture in your last paragraph though. That is good.

  2. This is SO important - why can't 'the media' recognise that this is the real issue, not Emma's millions?

  3. Once again, you cannot simply state that A4e are not to blame whilst putting all the blame onto their hapless staff.

    You have to have either been a client of A4e or worked for them to know what they are really like. So let's forget about the recent fraud allegations for a minute or three.

    When I attended A4e under the previous New Deal, A4e were creating phantom courses. I was supposedly on a 'Media and Design' course. Just one little snag. The course did not exist, never did exist and had no intention of ever existing. I only found all this out when I saw my name (along with others) on a whiteboard under various course headings, such as media and design. I asked a member of staff where the courses were as no one was doing anything at all other than reading out of date newspapers, trying to use obsolete computers, larking around and smoking ganga / weed. This is when I was told the courses never existed.

    So who told this member of staff to create falsehoods? Who gave her the impression this was acceptable? If she did this under her own initiative, which I very much doubt, why was she not reprimanded by another member of staff? Why did not one of her managers not report this?

    You see, within an organisation things such as fraud do not happen in complete isolation and without someone failing to take responsibility.

  4. When New Deal was privatised, Jobcentre staff were still telling clients that they were going on "courses" like media because that was what it still said on their IT system. It was convenient to maintain the fiction because clients went more willingly to the providers. What this staff member was probably doing was replicating what the JC had put on the clients' referral sheets, and that was not sensible. She should have pointed out straight away that the JC was wrong.


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