"It's who you know" - networking and A4e

The unemployed are increasingly being lectured about the benefits of networking.  For most people this is irrelevant.  Our networks don't include anyone who could give us a job.  But for outsourcing companies like A4e networks are vital to the business.

This is a simplified version of the A4e network.  Top left, David Blunkett, Secretary of State for Work and Pensions when the w2w contracts were privatised; after ceasing to be a minister he became a paid "advisor" to A4e (and still is).  But with Labour out of power it was useful to get a Tory on board; Jonty Oliff Cooper used to be an aide to David Cameron's strategy director Steve Hilton and was taken on by A4e as their director of policy and strategy.  He is not now listed as part of A4e's senior team.  Moving clockwise, we get to David Cameron.  He was sufficiently persuaded of Emma Harrison's capacities that he made her his "family champion".  And then there's Chancellor George Osborne who brings us to George Bridges of Quiller Consultants.  Bridges is a personal friend of Osborne and helped him run the Tories' election campaign in 2010.  So the network helped in the appointment of Bridges and his firm to help A4e revamp its image after the meltdown.  Private Eye points out that the firm, Quiller Consultants, is owned by Lord Chadlington, the Tory peer who is also Cameron's constituency chairman.
The new chairman of A4e is Sir Robin Young, a retired career civil servant whose last government job was as a Permanent Secretary.  The link between him and Robert Devereux,  Permanent Secretary at the DWP, was referred to by Margaret Hodge last week when she described them both as, "A whole lot of good chaps - I understand that the Chairman is an ex-Permanent Secretary, whom, no doubt, you have conversations with."
It's a network that has made millions for Emma Harrison.  What a pity that we can't all do it.

That PAC meeting

You can read the transcript of the Public Accounts Committee meeting on Tuesday here.  Not the bit that was held in secret.  But we did learn that there was another witness besides Eddie Hutchinson whose evidence was heard in private.  She was a whistle-blower who was complaining about what had happened.  For those who don't want to plough through the entire piece I have made notes below.  The characters involved are, on the committee, Margaret Hodge, Fiona Mctaggart, Austin Mitchell, Matthew Hancock and Richard Bacon and, as witnesses, Robert Devereux, Permanent Secretary, Department for Work and Pensions, and Alan Cave, Delivery Director, Department for Work and Pensions, along with Amyas Morse, head of the National Audit Office.

MH not happy with RD.  She sent him the A4e internal report and some emails.  He said there wasn't enough specific information in them to do a proper investigation.  She says he should have come back to her for that info.  He says that Grayling announced his enquiry.  She persists, he is infuriating.  What about the internal report?  He accepted A4e's word that of the 9 cases only 3 were actually fraud, and they related to one person.  But they are going to investigate all the cases.  He says they can't investigate where a company has gone out of business.  R Bacon points out that you can.  MH asks about the audit Grayling asked for.  RD says that it won't be published.  "This is a whole lot of good chaps-I understand that the Chairman is an ex-Permanent Secretary, whom, no doubt, you have conversations with. It is a big company with an expensive PR machine, which we have seen in operation over the past few weeks. They are bound to be good citizens, so we don’t need to have open and transparent oversight of them." - MH.  RD gives the official answer about possible litigation.  Lot of discussion with committee members about this.  RD says all the evidence is that A4e is not fraudulent.  Hillier keen to link value for money to the service her constituents are getting.  RD says the WP is not about the service - if they don't provide the service they won't get paid.  FM wants the evidence that A4e " has in place a system for staff to report improper behaviour or performance management systems that avoid perverse incentives".  

AM: "You have just sat through a long closed session, which produced some fairly damning indictments of both the structures and the practices in A4e and Working Links and which gave several indications of possible fraud. Some evidence has been submitted to us as well-to the Chair-by the people who gave evidence in that closed session. Will those allegations be investigated?"  He is keen to talk about what they do to avoid fraud - mentions Private Eye, about which RD is sarcastic.  He describes controls now in place to ensure claims are correct.  MH: "So is A4e fit and proper to undertake the Work Programme ?"  RD says yes.  

RD goes through all the checking process in detail.  Matthew Hancock asks him the questions which allow him to show how watertight the WP is.  Hodge raises issue of bonuses.  RD says it's not an incentive to fraud because they can't now commit fraud.  Hodge describes the case of a woman who already had a job lined up but was persuaded to sign the forms for A4e in return for £50 for herself.  She thinks this is wrong because A4e did nothing for the money.  RD says the £50 was A4e's and it's within the rules.  Some argument about this.  How can you measure what help was given?  They get on to complaints and argue about that.  

Hillier wants a single hotline for complaints and whistleblowers.  RD says he wants people to go to the provider first then the JC.  FM says: "The reason that I first wrote to the Comptroller and Auditor General about how A4e were behaving was that there was no process where the concerns of my constituents, who were referred to A4e, could properly be dealt with. I just got brush-off letters and there was no process where I could advocate on their behalf. Now that was not always about fraud, but there is a lack of a process."  RD bats that aside.  

Cave admits that they didn't ask for the 2009 report and should have done.  Conversation shows that there were two earlier witnesses, not just Hutchinson.  He later admits that he doesn't know who the other 4 shareholders of A4e are.  FM presses the point about controls needing to be not just financial.  She returns to this.  "What struck me from my contact with people is that a large proportion of those customers are very often not reluctant, but are very keen on getting into work, very keen that the public’s money is properly spent and feel that what they see is not spending the public’s money properly."  (Hancock again feeds RD nice questions.)    RM: "We keep hearing from people that they do not know how they can complain and that they have bullying managers who prevent complaints. I accept that you have not been able to investigate all these cases, but one of the things that I have learned as an MP is that while you get green ink complainers, when you get the same complaint from all ends of the constituency, there is something that you should be alert to, and one of the things that I am very struck by is the number of people who have worked for these companies and say that bullying management means that there isn’t a way in which they feel that they can safely make complaints when they are asked to do things. We have had evidence from people who have been asked to do things that include making up evidence and telling lies. We have not been able to test that evidence in a court of law. Nevertheless, it is quite perturbing that people feel that that is what they have been asked to do and that there is no way they can whistleblow about it."  She refers to a previous witness: "She was talking about a different programme, but it was in this period, and therefore she did not know how to complain. While you are right that the programme that she was asked to lie about was not the Work Programme , if she had known of a safe way of passing it up, that would have equally applied to people who worked on other programmes at that time in that company."  

Mitchell:  " I think Mr Devereux has said that one of these companies could go bankrupt. That is about equivalent to the Governor of the Bank of England saying moral hazard could discipline the banks because they might go bankrupt, too. They are already too big to fail. It is so unlikely. Here is a new category of capitalism that was set up to milk the state. It is not facing the competition of the market; it’s got a safe contract, which just goes on, so the threat of bankruptcy is really hypothetical."

Argument about what "systemic" means.  Then Hodge: " Finally, a public sector contract to build houses, hospitals or schools is pretty straightforward. I am thinking of payment by results-the school is there-and you can keep a little bit of money back to make sure that if anything has gone wrong, you can get it back. Would you accept that a contract that provides human services is qualitatively different? It will work only if you build trust. I think that that is the key thing-there has to be trust in the system. It is partly about the outcome but also about-this is the Fiona point, really-how well the customers are treated. That has to be part of the mix in these sorts of contracts. So it is about the how as well as the how much-I hope that you accept that. If I put it to you that I think that trust has broken down here, in particular in relation to A4e, how can you rebuild it?" Just stonewalling from RD, helped by Hancock.

 

Several points stand out for me.  There is Devereux's determination that anything before the Work Programme doesn't really matter; and the WP is fraud-proof.  Hodge and Mctaggart in particular want to focus on the service customers get, but Devereux thinks that's irrelevant because the companies only get paid if they deliver a service which gets results.  

It's frustrating to read, but not as frustrating as it must have been for the committee members.

 

Meanwhile, Chris Grayling is assuring us that the Work Programme is doing splendidly.  In the Express he says that 100,000 people have found work through it.    

Round-up of an interesting week

It began on Monday when the Guardian leaked details of the evidence due to be given to the Public Accounts Committee the following day.  They got it slightly wrong.  There were not two whistle-blowers, just the one.

On Tuesday the PAC met.  The Tory members of the committee insisted that the whistle-blower's evidence be held in private.  Somebody went straight to the Telegraph afterwards and gave an account of what had transpired.  This was published on 23 May.  The next day the Telegraph put the whole document containing the evidence given by Eddie Hutchinson on line.

The media used words like "damning" and "shocking" to describe what Mr Hutchinson said, and focussed on A4e.  Essentially, the culture at the company was such that fraud was inevitable and not dealt with properly.  

The government's reaction was confused but angry.  Chris Grayling appeared immediately to accept A4e's line that the allegations were "unfounded and untrue" and that Hutchinson was not a credible witness.  We were left to assume that he was an embittered sacked employee - the usual characterisation of whistle-blowers.  But Grayling's response always skated over the internal A4e report, produced before Hutchinson ever joined the company, which told a similar story.  In any case, it all happened under the old contracts and couldn't happen now.  He even demanded that former Labour ministers release secret papers showing what they knew about fraud at A4e.  But, "We have audited our current contracts with A4e and found no evidence of fraud."  Interestingly, he threw in that it was Ernst and Young which did the audit.  As one of our correspondents pointed out, Ernst and Young part owns Working Links.  Might as well keep it in the family.
I was reminded of an investigation for which I was responsible a few years ago.  The person drafting the report wanted to put, "There was no evidence ...."  I changed it to, "We found no evidence ..."  Quite different.
So where are we now?  The government wants to say that it never happened but if it did it was Labour's fault.  And Hutchinson isn't tellling the truth.  Whatever the PAC says has been rubbished in advance.  The other primes can be relieved that all the attention is on A4e.  The current contracts are fraud-proof, so that's all right.  But now we hear that Meg Hillier MP (left) is calling for "greater openness and transparency" over all such contracts.  The SundayTelegraph today reports the MP, who sits on the PAC, as saying: "A4e is one of a number of companies receiving its only income from the public sector, but we can't follow the public tax pound. It's public money paying for a public service commissioned by the Government. Why would you want to hide anything?"  She added that a good organisation would have nothing to hide.  Public companies are accountable to their investors, so taxpayers should have a right "to know how publicly-funded firms made a profit and should have a say over how companies operate, including how much executives are paid."  We agree.

None of that can change the fact that the Work Programme is floundering.  The best that the government can do is expand its work-for-free programme (see the Observer).   When in a hole stop digging, they say.  But the DWP keeps on digging.

Grayling on Newsnight

Okay, I take it back.  The BBC did tackle the A4e fraud question on Newsnight last night.  If you missed it (as I did) you can catch up on iplayer here 25 minutes in.  Paul Mason summarised Eddie Hutchinson's evidence, picking out all the juicy bits.  He then showed the 2009 internal A4e report which, he said, they had handed to the DWP only to be told that they weren't interested because they were concentrating on current programmes.  Mason said that Hutchinson had been surprised to learn of this report.  (He joined the company the following year.)
Emily Maitliss then interviewed Chris Grayling.  She wasn't sufficiently clued up about the contracts, but the main points got across.  Grayling insisted that the allegations were not about the Work Programme, and that the detailed investigation done by the DWP's audit team and Ernst & Young had found no evidence of systemic fraud.
Maitliss tried the obvious questions.  Is A4e a fit and proper company?  If this was a fraudulent benefits claimant he would be "down on them like a ton of bricks".  Grayling stonewalled, but said that there were "significant doubts" about the evidence and "significant doubts" about Eddie Hutchinson.
So the strategy is clear.  Suggest that Hutchinson is a liar.

Grayling virtually calls Hutchinson a liar

There is no doubt whatever over which side Chris Grayling is on.  On Channel 4 News tonight he said that there are "serious question marks about how substantial and how correct the evidence ... is; serious potential misunderstandings."  The evidence, of course, is that which Eddie Hutchinson gave to the Public Accounts Committee about what he'd found at A4e.  But Grayling insists, "We haven't found fraud at A4e," after the investigation by Ernst & Young.  And now he's attacking the PAC, accusing them of not disclosing this evidence until the meeting, when it should have gone to those conducting the audit for the DWP.  Says Channel 4 News, "Mr Duncan Smith's letter continued: 'I can only reach the conclusion that the committee has held back details from the DWP in order to generate media coverage.'"  

Margaret Hodge says that she's very upset about the leak to the Telegraph and will launch an enquiry.  The initial Telegraph story suggested that the paper had simply spoken to someone who was there at the meeting.  The subsequent publication of the document containing his evidence must have a similar source; it's annotated, as if it's one of those copies handed out to committee members.  


With Grayling's colours pinned firmly to the mast, Hutchinson is now being portrayed as a liar.  Perhaps A4e will try to paint him as an embitterd ex-employee who failed in his job.  How can the rest of us know who's right?  There's one point which might clarify matters.  Hutchinson didn't join A4e until 2010.  It was a year before that when A4e compiled its own internal report which showed serious fraud and potential fraud.  So was that seriously incorrect as well?

If you get all your news from the BBC you wouldn't know anything about this.  As usual, they are pretending it hasn't happened.

The secret evidence disclosed

Thanks to the Telegraph, we now know some of what Matthew Hancock MP and his Tory colleagues wanted to keep private at the Public Accounts Committee meeting yesterday.  The whistle blower is Eddie Hutchinson, an accountant who was appointed head of internal audit at A4e in 2010.  The paper has put the whole of his evidence online here.
Hutchinson had previously worked for Working Links, where he uncovered a level of fraud which he described as "farcical" and which was ignored by management.  As later with A4e, he said that the bonus system was to blame.  Hutchinson was made redundant by Working Links and then went to work for A4e.  He found a similar situation there.  By February 2011 he was dealing with the Slough case, which, he said, should have been referred to the police earlier.  "He claimed he also became aware of a fraud on the New Deal for Disabled People contract from A4e’s Glasgow office. In this case, he said, an employee resigned, saying she had falsified evidence and misappropriated cash. At the time, he made a note it was a 'regular occurrence' that no action was taken against people admitting to fraud."  There were numerous other cases in different contracts.  He was supposed to be helping A4e to develop watertight risk controls, but noticed no "significant enhancements".  His advice was not heeded.  "After seven months at A4e, Mr Hutchinson said in evidence that he was convinced he had seen 'unethical behaviour, mismanagement, inadequate corporate governance, and risk management, and excessive payments in the form of salaries and bonuses'. He has told MPs: 'In my professional view, it was systemic.'"  A4e denies this, of course.  It's all in the past.
Surely this sort of evidence can't be brushed under the carpet.


The Exaro website has published the 2009 internal A4e report.  It can be downloaded from the site here (you will have to register with the site).   We'll be examining that soon.

Gagged

This is Matthew Hancock, the Conservative MP and member of the Public Accounts Committee, who insisted that the whistle-blowers' evidence on fraud in A4e and Working Links was not made public.  (On the same day Hancock appeared on BBC's The Daily Politics.  He was not asked about this, but did manage to quote the party line on how wonderful the Work Programme is.)  The whistle-blowers worked with or for the two private companies.  According to the Guardian, "One of the whistleblowers said: 'It has taken a lot for us to come and speak in public about what we see as fraud. We have been silenced.'"  Two of the witnesses' evidence was previewed in the Guardian on Monday.  One of them was "a senior figure in A4e's risk and audit department in 2011" and "claims there was evidence of fraudulent activity in many of the firm's offices."  The paper reports, "During the public session held later, Labour MP Austin Mitchell called for an investigation into the claims made in private. He said: 'We have just sat through a long closed session which produced some fairly damning indictments of the structures and the practices in A4e and in Working Links and gave several indications of possible fraud.'"
The Independent also reports the story:  "Another [whistle-blower] said they believed that pressure had been applied to the Tory MPs by the Government to ensure that more damaging evidence about the fraud on the programmes was not placed in the public domain."
So is this evidence going to be made public?  Or do Hancock and his mates have a vested interest in making sure that it's kept secret?

Evidence in private - a "damning dossier"

The Public Accounts Committee heard evidence of fraud at A4e today - but in private.  According to the Daily Mail, this followed a row between Labour and Conservative members of the committee.  Three whistle-blowers handed over a "damning dossier".  The Mail doesn't say whether the whistle-blowers were A4e staff.  Apparently the secrecy was so that the evidence didn't interfere with a possible police investigation.  Robert Devereux was back giving evidence; he's the permanent secretary at the DWP.  He conceded that the evidence sounded damning, but much of it was to do with old programmes and couldn't happen now.  That's all right then.  We must wait for a fuller account of events (come on, Guardian) to find out the rest of what went on.

The Mail, naturally, has picked up the story about an A4e client in Bootle getting a job in a lap-dancing club.  It's the perfect excuse for the Mail to publish a large picture of what looks to me more like pole-dancing (but what do I know?).  And I begin to feel a little bit sorry for A4e.  The Exaro account, picked up by the mainstream media, assumes that the client was sent to the club by A4e for a job.  But it's more likely, surely, that a client found a job there off his or her own bat.  And in that case, why shouldn't A4e claim the job outcome?

Are we going to see more prosecutions?  Or was the point of the secret hearings that the government would prefer to just bury this?

Fraud and lap-dancing

The Exaro website has got hold of the leaked internal A4e report of 2009 which demonstrated that the company knew that more than a quarter of its job outcome claims were potentially fraudulent.  This has already been publicised by the BBC's Paul Mason, but it's salutary to remind ourselves that Grayling claims that there was "no evidence of fraud" in A4e contracts.  Exaro also has what it calls a "shock discovery" - an instance of this potential fraud in the report.  "The Bootle office of A4e sent the job-seeker to work at ‘X In The City’, a Liverpool lap-dance club favoured by football stars."  If you're not acquainted with what goes on in such places, we read that, "The bar advertises lap dances at £5 a time, and offers a ‘VIP’ deal in private rooms where a half-hour lap dance with champagne costs £50."  The auditors found that "a jobseeker was working at the club for more than 16 hours a week for 13 weeks in 2009."  But they couldn't verify the job placement because the club wasn't open during working hours!
There will be some of you thinking, why not?  It's a job.  And actually, at the time no rules were being broken.  But they wouldn't be allowed to do it now.  Said the DWP, "The secretary of state, Chris Grayling, issued a ban on job centres carrying advertisements for jobs in sex clubs and sex shops. Therefore, we are hardly likely to sanction a job provider placing a person in a sex or lap-dance club. It would be banned."

Fraud at A4e and Working Links ignored

The Guardian has revealed what is going to be told to the Public Accounts Committe tomorrow (Tuesday).  Both A4e and Working Links employed investigators to look into financial discrepancies, and then refused to hold formal enquiries.  "A senior figure in A4e's risk and audit department in 2011, claims there was evidence of fraudulent activity in many of the firm's offices.  He says that, in two of A4e's offices, staff were caught with company stamps that could be used on paperwork to claim public money for placing people in jobs. Despite a formal investigation, A4e took no action, the witness claims."  A4e has responded by saying that "the stamps were only used with the employers' full knowledge and consent, and that a stamp alone could not be used to validate claims."  I'd like to know the details of that.  But A4e is not going to be invited to the meeting to give evidence themselves, and they are very cross about that.  "Wherever we have been given facts to support any previous allegations, we have looked into them and we have not found a single allegation of fraud that stands up."  Can we mention their own 2009 internal report?

Slippery figures for the Work Programme

The ERSA (the trade body of the w2w providers) has put out a statement warning that the Work Programme is not likely to meet its targets.  Hardly a surprise.  But what's interesting is the way in which the various media reports of this spin the figures.

Take the version in the Financial Times.   They report the ERSA saying that on average 22% of starters "have been placed into jobs".  Round the country the rate ranges from 18% to 26%.  But the signs are that a lot of the jobs are temporary.  The Recruiter website reports the range but headlines it as "nearly a quarter".  The Telegraph's version is that "a fifth" "have found jobs".  But on Radio 4's PM programme Kirsty McHugh of the ERSA said it was "approaching one in four".  Okay, you can say that it's a minor point.  But none of the reports point out that more than that number would be expected to have found work without any intervention - the dead weight figure. 

Radio 4 asked McHugh if the prime contractors were going to need to go to government for financial help; she dismissed the idea.  But one small contractor, Groundwork Southwest, has gone into administration, and several charities have pulled out.  The Work Programme isn't working.  Even those who find work are likely to be in temporary or part-time jobs.  Better than nothing for the clients, but useless to the providers.

For a little light relief, take a look at the latest post on Hayley Taylor's website and ask yourself if you would like this "Fairy Jobmother" to write your CV.

Interview with Andrew Dutton

The Telegraph has an interview with Andrew Dutton, A4e's CEO.  It gives him the opportunity for some PR for the company but leaves unanswered the really important questions.

On Monday, says the article "a group of MPs is due to question DWP ministers on their handling of fraud allegations across the welfare-to-work industry, not just at A4e, suggesting the problem runs deeper than one firm."  Dutton wants to repair A4e's reputation and is keen to stress that "the issues we’ve faced are genuinely market issues – there’s been 126 investigations into the whole market. We’re not alone.”  The estimated cost of all the fraud is £773,000 but A4e accounts for only 9% of that.  "The silver lining, Dutton says, is that A4e now has a competitive advantage.  'My business has been completely audited. The other organisations can’t say that,' he says."  Part of the PR operation is to invite MPs and "opinion formers" into A4e's local offices.

Reading thus far, one begins to wonder whether the writer of the article, Louisa Peacock, is ever going to challenge Dutton on the real issues.  "A4e obtained jobs for 310,000 people last year," she says, "and it clearly wants to promote the figure, although Dutton does not say how many of those are still in work."  Note the phrasing.  Not "310,000 people got jobs".  The credit is all A4e's.  Some way after that we read, "Still, a damning report from the spending watchdog last week showed up to £1bn of taxpayers’ money was being spent on finding jobs for people who would have found work without help."  Peacock doesn't use this to challenge Dutton's earlier statement (nor does she pick up on the nonsense in that sentence).  Perhaps she only did the research afterwards.  Towards the end she says, "As far as is possible, it is business as usual for A4e."

It's all very helpful for Dutton and the company he runs.  But it leaves out of consideration the other allegations against A4e, about the way it treats its clients.  Business as usual indeed. 

PS.  This article was put on the Telegraph's  website at about 6.00 pm on Saturday.  By 11.45 pm it had been shortened and retitled "A4e seeks details on 'secret' frauds".  Interesting.

What kind of investigation?

There's plenty of coverage of the removal of one of A4e's contracts today, but most of it just repeats the press release.  We saw at Prime Minister's Questions how the government wants to spin the NAO report; Cameron focussed on how quickly the Work Programme had been got up and running.  It's left to the Guardian and the Yorkshire Post to highlight a significant omission.  
You remember that leaked internal A4e report which showed how much probable and potential fraud was going on?  It was important enough for the BBC to break its vow of silence on the A4e issue.  But it wasn't, apparently, important enough for the DWP to want to look at it.  They didn't ask for it.  Margaret Hodge isn't happy about that, naturally, and wants a more complete investigation.  It raises the question of what kind of investigation the DWP thought it was conducting.  The phrases "whitewash" and "damage limitation" spring to mind.  


Another major point in the National Audit Office report is reported in the Guardian.  "...  allegations against A4e represented just under 10% of cases where fraud was substantiated.  Over 40 cases occurred in other back-to-work companies, representing total losses since 2006 of a quarter of a million pounds.  Out of a total of 126 reported cases of potential fraud the DWP concluded that there was no case to answer in 75 cases. Of the remaining cases, the NAO report said, '24 were of false representation [fraud], 22 of non-compliance' and five were still under investigation. The total losses to fraud since 2006 averaged £129,000 a year, which it described as a 'small' loss in comparison to a total expenditure of £829m on employment schemes in 2011-2012 alone."

An unexpected advert on Twitter from Paul Lewis, who is one of the BBC's financial experts.

Is that it?

It's the best possible outcome for A4e.  We all knew that there was no chance of an investigation finding "systemic fraud" in the company.  But to have exonerated them completely would have been a mite suspicious.  So the DWP has taken away one small contract; one which A4e says employed just 5 people and made up just 0.5% of the company's revenues (Guardian) and where fraud has been admitted.  A4e bosses sound suitably contrite but vindicated.

The media have generally been content to report rather than comment.  Clearly we are meant to see this as drawing a line.  Whatever happens now, in Slough for instance, can be seen as an isolated incident and proof that the company has got its act together by reporting it to the police in the first place.  The two prison education contracts which had been put on hold can now get the go-ahead.  Business as usual.  Labour's Liam Byrne has blustered ineffectually.  But what about all those dossiers which MPs and journalists were compiling?  Margaret Hodge MP and Fiona Mactaggart MP, members of the Public Accounts Committee, said that they'd received hundreds of complaints.  Journalists were keen to hear from whistle-blowers, and I know of at least one TV producer anxious to get evidence.  Now, presumably, there's no story.  Move on.


But that will be a disservice to all those who have voiced their anger at their experiences.  We need to maintain our watch on this company.

One contract lost - everything else fine

As some of you have been quick to point out, it's been announced that A4e has had one contract removed, the Mandatory Work Activity contract in the South East.  That's it.  Everything else is fine.  (See the Press Association announcement).  No evidence of fraud, says Grayling, but "significant weaknesses in A4e's internal controls on the Mandatory Work Activity contract in the South East".  But "A4e is keeping other contracts it has with the DWP, including those under the Work Programme, which tackles long-term unemployment."

The BBC report adds the reactions of A4e.  "The company welcomed the 'positive findings' of the Department for Work and Pensions' audit, and another by the Skills Funding Agency, saying: 'Both confirmed they identified no evidence of fraud, systemic, attempted or otherwise, in relation to any audit completed of the contracts they hold with A4e.'"  
You bet they're pleased.  One MWA contract is a small price to pay to be let off the hook for everything else.

Report on the Work Programme

The Public Accounts Committee has published its interim report on the Work Programme.  There's some approval, mainly for the speed with which it was implemented, the "greater flexibility" it allows and the way it transfers risk away from the taxpayer.  (See the BBC's report.)  But there are also major criticisms, as the Telegraph highlights.  "One of the major worries is that companies are getting paid at least £400 just to assess each candidate, when many would be in the same situation 'without the programme'.  Some of those unemployed people would already have found jobs of their own accord, while others will remain on benefits that continue to be funded by the taxpayer.  The report will say payments for people who did not need the programme amount to nearly £1bn and could 'potentially' be even higher - the equivalent of £40 for every household in Britain.  MPs will also say they were 'sceptical' that it was value for money to pay around £50 in "management fees" for every jobless person processed." 
The BBC version of the story also reports the Committee's concern about A4e.  "They expected the Department for Work and Pensions to 'urgently' publish the results of its investigation into allegations against the firm regarding the Mandatory Work Activity work experience scheme, adding that Parliament had 'significant interest' in the firm's financial affairs."  And that's a bit confusing, because of course the DWP's "investigation" is supposed to be into all A4e's contracts, not just MWA.  
But publishing any sort of results doesn't seem to be a matter of urgency for the government.  Figures for the WP are not set to be disclosed until August.  Meanwhile, "Unofficial figures seen by the BBC in February suggested about 20% of unemployed people who have been signed up for at least six months have been found a job."  (There's an extraneous word in there - "been".  People have found a job, often without any help.)  Now, the dead weight figure, according to Grayling - the numbers who would have found work anyway - is 28%.  What does that tell us?

Another A4e employee has been arrested in Slough - the eighth. 

Join the union

Trade union membership has always been low among the employees of outsourcing companies.  Workers tend to be on short-term contracts and often don't see the point of paying subs out of their meagre wages.  So it's interesting to see that the PCS, the Public and Commercial Services union, is actively recruiting among A4e staff - see their website.
Sceptics may say that the union is simply trying to recover the membership numbers which have been steadily eroded by the selling off of public services.  But they are clear about the problems in A4e.  "We know there are issues in A4e - issues such as long hours, unachievable targets, low pay, and high turnover – but we can only change when we work together."  They say, "We are currently talking to A4e senior management at a national level about what PCS can do for staff in A4e, and have asked them for time to speak to staff."  Will A4e resist, as they resisted the right of clients to be represented in Edinburgh? 

Seventh arrest

It's reported today that there has been a seventh arrest in the case of suspected fraud at the Slough A4e office.  Quite why this case is dragging on isn't clear.  Does the evidence point to the fact that at least 7 people must have known what was going on? 

I came across an interesting thread on the Money Saving Expert forums, about clothes for interview.  In the past it was the Jobcentre which would provide the money for new clothes.  Now it appears to be the private contractor.  One would hardly expect any private company (let alone A4e) to cough up large amounts of money.  But in this case, £40 for a new outfit, even from Primark, seems insufficient.  Has anyone got recent experience of asking for money for interview clothes?

That informal survey - results. And another survey

Thank you for the responses to my informal survey.  Here's my interpretation of what you said.

1.  I asked about pressure to avoid part-time or temporary work.  The charge was that providers were steering clients away from anything other than full-time, permanent jobs because they wouldn't get outcome payments for anything less.  Only two people said that they had experienced this, although several others pointed out that they agreed with the adviser that they couldn't take part-time work because of the benefits system.

2.  The second question was about inappropriate demands.  One person said that an adviser had demanded his bank statement, and another said that he had been asked about his faith, but no one else reported any such demands.

3.  It was the third question, about "tailored support", which attracted the most agreement.  If respondents are typical, the concept of tailored support is something of a joke.  Several of you talked about sub-contractors saying that they couldn't afford to provide any such support.  No one reported receiving any actual training.  Some people realised that they had much better educational and professional qualifications than the people supposedly advising them.  One respondent had experience of clients with special needs, now on ESA, who are not receiving the appropriate support or understanding from the w2w companies.

So from this entirely unscientific survey it appears that some of the accusations against A4e and other providers arise from isolated incidents rather than a general culture, but that the notion of tailored support is largely a fiction.

 

I want to try a more focussed experiment.  Chris Grayling said recently that " Jobcentre Plus takes 10,000 vacancies every working day".  But all of us who have ever had to look for work know that some of the advertised vacancies turn out to be cons.  They may to be for home-working scams; or working on commission without this being made clear at the outset; or non-existent vacancies advertised by agencies to get people to register with them.  Let's see if we can collect these and get a true picture of the situation.  If you find an advert that's obviously not for a real job, send me the link (as a comment to this post - I won't publish it).  If you only discover the con later, send me the details.  I'll leave this open for a month or two, so please help to get some useful information from this.

Timeline

The year so far:

• 18 Jan  The Telegraph publishes details of A4e's accounts.  This blog does the sums and highlights the extraordinary amount of money paid to Emma Harrison.  This is taken up by Private Eye.
• 2 Feb  Emma Harrison is guest of the day on the Daily Politics - no hard questions are asked.
• 5 Feb  Emma Harrison is on Radio 5 Live
• 8 Feb  The Public Accounts Committee attacks A4e, targeting the money paid to Harrison and the poor results.  This is reported in the Guardian.
• 10 Feb  The Daily Mail picks up the story and launches a devastating attack.
• 11 Feb  The rest of the media take up the story
• 17 Feb  The Mail has another go at Harrison
• 18 Feb  Reports of fraud investigation in A4e Slough
• 19 Feb  Margaret Hodge MP calls for suspension of all A4e's contracts
• 21 Feb  Fiona Mactaggrart MP starts highlighting reports of fraudulent practice in A4e
• 23 Feb  Emma Harrison steps aside as government's "family champion".
• 24 Feb  Emma Harrison steps down as Chair of A4e (but keeps her stake in the company).
• 9 Mar  DWP announces "independent audit of all our commercial relationships with A4e"
• 10 Mar  A4e gets two new prison education contracts
• 22 Mar  Paul Mason reveals a leaked A4e report of 2009 which shows they were aware of widespread fraud.
• 3 Apr  A4e is said to be the preferred bidder for the EHRC helpline contract.  This is denied.

So now what?  There was a point in February when journalists were contacting people like me to get whistle-blowing contacts, keen to run revelations.  Now, they're not interested (except for individuals at Private Eye and the Guardian).  The government has quietly stopped giving A4e any more contracts until it's safe to do so.  The DWP has kicked the story into the long grass with its investigation.  Emma Harrison has lost her public profile but not her income.  Has anything important changed?

More advice for government

We know that A4e has never been shy of giving advice to government.  Submissions regularly pop up in response to the enquiries conducted by committees.  The latest is in relation to the Work and Pensions Committee inquiry into "Youth Unemployment and the Government’s Youth Contract".

They have every right to make such a submission, of course.  They stress their vast experience in this area and say that they are "currently helping over 20,000 individuals under the age of 25 enter employment."  And it's not just in employment.  "We partner with the public, private and voluntary sectors to develop innovative and efficient solutions to the most complex social problems; from entrenched, inter-generational worklessness to poor health in deprived communities. This work brings us into contact with people across the UK who we help to navigate public services, and ensure that they get the support and help they need to help themselves.  We therefore have a unique perspective on the ways in which services are delivered."

Yes, okay, we'll skip the obvious objections.  Have they got anything worthwhile to say on the subject of the "Youth Contract"?  Well, they point out that it's not clear how the delivery of the programme is supposed to work and who is responsible for it. And that, by the way, is a question that was raised when this scheme was announced.  If young people are guaranteed placements or subsidised jobs, why should WP providers get outcome payments?  But A4e is clear that it should be WP providers who do it and profit from it under payment by results.  And the ERSS framework, that list of approved prime contractors, should be flexible and allow new entrants.  They point to the need for better skills training for young people and cite A4e's Vox centres as the way to do it.
One interesting point in their submission is the risk of "deadweight costs"; that the wage subsidy will go to employers who would have employed these young people anyway.
What we see in this submission, as in others they have made to government, is a mixture of sensible observations and concern to expand their own business.  If other contractors have made similar submissions, they will have done the same.  What should concern us is not this very obvious lobbying, but the less obvious kind going on behind the scenes.

An informal survey

A number of points have been raised by posters, sometimes in response to reports in the media, about practices which are, if true, disquieting (to say the least).  So I'd like to conduct a sort of informal survey on three particular points and invite comments.  I won't publish them; I want to collate them and see if the problems are widespread.

1. Discouraging temporary and / or part-time work.  This possibility was raised at the start of the WP, since payment by results means that providers don't get paid if clients take this kind of work.  Is it the case that advisers are telling clients not to take such jobs?
2. Inappropriate demands by advisers.  We've heard that someone claims to have been required to produce bank statements etc.  How common is this sort of demand.
3. Lack of "tailored support".  Lots of stories are coming out about people receiving nothing in the way of support or treatment which is inappropriate to their circumstances.  How true is this?

I look forward to your comments.