Reasonable

It always sounds completely reasonable.  The government wants to "reform" welfare in some way, and the aim is fine.  But when they try to put it into practice it becomes spiteful, inefficient and unreasonable.  

Take the aim of getting people off sickness benefits.  We all know that a problem stems from the fact that sickness benefit has always been higher than unemployment benefit.  We all know that there are many people claiming these benefits who could work.  So what do you do?  Well, this government employs a private company, Atos, to assess whether claimants are genuinely unable to work, and pays it £3.1bn.  Both the company and the government deny that there are any targets, although it's hard to see how there could not be.  For a summary of just how wrong this can go, see the Independent's article.  But when you want to do another exercise in reassessing disability allowances, you hire the same company.  What could possibly go wrong?

Or take the fact that large numbers of young people are not in education, employment or training.  It's entirely reasonable that they should be given something useful to do.  It might be reasonable to look back at what Gordon Brown did as Chancellor in the early days of the last government.  "New Deal" started as a scheme to help NEETs.  Some might see it as sensible to create jobs.  But this government has decided to make young people do 3 months unpaid work or lose their benefits.  Again, this could be seen as reasonable.  Another article in the Independent describes the scheme, which sounds familiar to anyone who remembers New Deal.  But this scheme will put people into placements with "charities and social enterprises".  It assumes that there are enough of such organisations ready to take them (there aren't).  And it will certainly be organised by a private company, for profit.

The payment by results model seemed a great idea to a government obsessed with profit.  Take off all the restraints and inspections, tell companies they can do what they like, and they will pull out all the stops.  Well, no.  An interesting piece on the Guardian's website by Su Maddock claims that innovation in the Work programme can only come through local commissioning, not through prime contractors and financial incentives.  Again, anybody who remembers New Deal, before David Blunkett privatised it, will recognise this model.  (For those who don't remember, the Jobcentre Plus regional offices held the budgets and contracted with a variety of organisations, including very local ones.)  

This government continues to confuse the reasonable with the ideological.

Waiting

Some people think that outsourcing has taken a bit of a knock lately.  The G4S fiasco showed how risky it can be, and the bad publicity surrounding A4e has done the whole business no good.  But none of it has slowed the pace of outsourcing, and ideologues of the right want to see everything hived off to the private sector.  Some local councils have already done this, knowing that they have no fall-back position if it goes wrong because they have sacked all their council employees.  The same handful of companies are scooping up all the work and the profits.  All that the government's much-vaunted Payment By Results has brought about is the even deeper involvement of the huge financial companies such as Deloitte and the shoving aside of the smaller organisations.  Big money rules.  And why would politicians want to change that?  

Working Links is having a bad time (see Private Eye) and warning staff that because they are not delivering the expected results for the Work Programme they could be in serious financial trouble.  One curious aspect of this is that the boss, Brian Bell, said that, "In some locations we are struggling to fill the vacancies we are finding."  Does that mean that employers won't consider people who are on the WP, i.e. have been out of work for a long time?  A4e's Andrew Dutton warned of that some time ago.  And the leaked document showing A4e's outcomes confirmed how bad the situation was.  But the official figures contradict that.  If the companies do fail, as the Eye points out, there is no fall-back position because there is no public sector involvement in the WP, so we could be looking at a bail-out for those companies.  That could include A4e.  But I suspect that some face-saving formula will be found to obscure the truth.  Anyway, A4e doesn't depend entirely on the WP.  

We're waiting for something to happen on the Slough A4e arrests.  The last we heard was back in May, when an eighth person was arrested on suspicion of conspiracy to commit fraud.  I know the legal system can grind slowly, but it's time we knew whether the case is going to trial.  

Requiring email passwords, and other things

Some time ago people raised concerns about Work Programme providers apparently requiring clients to divulge their email passwords.  Naturally some thought this was a breach of their privacy, while others could see good practical reasons for it.  Well, someone decided to ask the Information Commissioner's Office for a ruling, and has passed the response to us.  It doesn't help much:

"Principle 1 of the DPA states that:
“personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless – 

1. At least one of the conditions in schedule 2 is met, and
2. In the case of sensitive personal data, at least one of the conditions in schedule 3 is met.

In practice this means that an organisation should ensure that staff know the purposes for which their personal data will be processed, and that data will not be used in any way that would have an adverse effect on the individuals concerned."

It goes on to say that if you have concerns you should raise them with the organisation; if that doesn't help and you think that the principles of the DPA are being broken, you can make a formal complaint to the ICO.  The difficulty, of course, would be in defining "an adverse effect".

The news that the Advertising Standards Authority has banned A4e from describing itself as a "social purpose company" was picked up by lots of local papers and specialist websites, but of the mainstream media only the Guardian and the Express report it.  Congratulations to our regular correspondent, Gissajob, who made the complaint to the ASA.  We first raised the subject in April 2011.  In January 2012 the Guardian was guilty of falling for the spin, calling A4e a "social enterprise".  The following month the Guardian's Patrick Butler was mocking A4e's "threadbare pretensions to being a 'social purpose company'". However, A4e doesn't like the ASA's ruling.  On its website it says, somewhat petulantly, "The ASA has upheld a complaint against A4e’s use of the term ‘social purpose company’ to describe itself. In line with the ASA’s recommendation, we are amending our advertising; however, given that we continue to deliver services which positively impact on people’s lives, we are a private company with a social purpose. To this end, we are considering an appeal against the ASA ruling."  So there!

If you're a connoisseur of beer you may have come across some made by the Thornbridge brewery.  And you may be interested in a piece in the Sheffield Star.  Yes, it's the brewery owned by Emma Harrison's husband.  

A4e can't call itself a "social purpose company"

It was supposedly Emma Harrison's idea.  She decided to describe A4e as a "social purpose company", claiming that phrase was her invention, though it wasn't.  But someone (and it wasn't me) complained to the Advertising Standards Authority that the description was "likely to mislead consumers as to the nature of their business".  And the ASA has agreed.  It rules that "we were concerned that individuals would understand the claim to mean that A4e was a not-for-profit organisation. Because we understood that that was not the case, we concluded the claim was likely to mislead and breached the Code."  The Guardian and the Express both report the story, by simply printing the press release.  A4e's feeble defence is that "the focus of its business activities was to 'achieve positive social outcomes', adding that the majority of its revenue was derived from contracts aimed at achieving long-term sustainable employment outcomes."  Yes, well, you can't use a misleading description.
       And it was misleading.  I remember Harrison's appearance on the BBC's The Moral Maze, when she had to disabuse Michael Buerk of the notion that A4e was a charity.
       Another embarrassment for Harrison and her company.

     

Iain Duncan Smith shows his true colours

When the latest unemployment figures came out last week there was some debate over what they meant.  They showed that overall the number of unemployed had gone down a bit.  That's obviously the bit that the government wanted to focus on.  But the improvement was mostly in the London area.  In many parts of the country, away from the capital, the numbers of unemployed had gone up.  And, it was pointed out, a big chunk of the improvement was down to lots of people being self-employed, with no indication of how much work they had, and to people having to take part-time work because they couldn't get full-time.
       The BBC has a few interviewers / presenters who are expert in their own fields.  One of them is Stephanie Flanders, an economist.  She reported the facts and set up an interview with a nurse who is technically self-employed but only gets work for a few hours a week.  And that infuriated Iain Duncan Smith, the Secretary of State for Work and Pensions.  He has lodged an official complaint with the BBC.  The Telegraph reports that, "In an interview he accused Miss Flanders of 'pouring cold water' over figures showing a rise in the number of people in work and 'peeing all over' the efforts of British businesses."  He went on to accuse the BBC of following Labour's reading of the economy.  The Independent also has the story and quotes the BBC's response.
       The objectionable language used by IDS is bad enough.  But the fact that he complains about biassed reporting shows that he is not fit to hold office.  He has been given ample opportunity to put the government's point of view.  The media have a responsibility to look beyond the spin.

Not value for money

You may have read or heard about the National Audit Office's criticism of the DWP's contract with Atos.  You may even have heard of Tom Greatrex MP who asked the NAO to investigate.  But then again, the story passed most people by.  More interesting things have been happening.  So read the story in the Independent or on the BBC's website.  What the criticism boils down to is that performance targets are set too low, there are no proper checks on the performance data that Atos submits, and the company isn't penalised adequately for poor performance.
       Greatrex points out that the contract costs us £112m a year, but appeals cost a further £60m.  Yet the NAO's Amyas Morse admits that they don't know whether changes to the tests Atos carries out are necessary because they don't routinely look at the decisions of the tribunals.  This laid-back admission is troubling, especially since official figures show that 40% of appeals are upheld, rising to 70% when the appellant is accompanied by someone like a CAB advisor.  You would expect, would you not, that the civil servants would want to know why.  Or that the politicians might be interested.  Instead, it's taken a lot of pressure to get any information, because of that well-worn excuse "commercial confidentiality".  Iain Duncan Smith will be content that all the blame is heaped on Atos rather than on the government.  The company is rewarded with more huge contracts.
       This situation can only get worse, unless the government has the courage to re-examine the whole business of outsourcing.  And there's no sign of that.
     
   

Preferred bidder - but A4e didn't get the contract

Back in April we reported that the Exaro website was saying that A4e was the preferred bidder for the Home Office's contract to run the Equalities and Human Rights Commission helpline.  Given all that was going on at the time it was not surprising that the Daily Mail took up the story.  Well, Exaro now reveals that A4e hasn't got that contract, which has gone to an American company, Sitel, which has beaten the CAB as well as A4e.
It's difficult to know what was really going on here.  Exaro naturally wants to claim credit for its previous revelations.  "A spokeswoman for A4e claimed that it had never been the preferred bidder and so did not really lose the contract, saying that the award process 'was discontinued earlier this year and we understand that a revised contract award procedure was launched. A4e did not enter this revised procurement process.'"  But Exaro claims that the EHRC has confirmed that A4e had been the preferred bidder originally.  Who knows?  Perhaps the Home Office decided to scrap the tendering process when the storm broke, and re-opened it after advising A4e not to bother.  Does this tell us anything about future contracts?  probably not.
Mark Serwotka, leader of the PCS union, is glad that A4e lost out, but doesn't want the helpline privatised at all.

That interview considered

Time for reflection on that Emma Harrison interview.  The Daily Mail gave her the chance to tell her side of the story, ironically.  I know from the stats for this blog that it was the Mail's monstering of her that did most of the damage.  So let's look at what's being said.

It's impossible for us to know whether Harrison herself was the business brain behind securing all those contracts and connecting with the right people.  Clearly she saw herself as a charismatic leader, the company figure-head.  She encouraged the culture of the business, driven by targets and rewards.  Was she surprised when some employees cut corners?  What emerges from the interview is a lack of understanding about real business.  Outsourcing is very different from the sort of entrepreneurship she sees as her expertise.  She says: "People say it’s taxpayers’ money, but it is profit honestly earned over many years on orders that were placed with our company. I've been investing in this business, taking massive personal risks, for years. This was not a dividend of one year, it was a result of 25 years of work.  I agree it’s a fantastic amount of money but I have tens of millions of pounds invested in A4e, some of it supported by personal mortgages. I'm not a gambler, I was very exposed. Any entrepreneur will understand this. I'm the majority shareholder in A4e. I'm taking all the risk."
     Take that first highlighted phrase.  An outsourcing contract is nothing like an order placed with a company.  If I make widgets or run an accountancy practice I only get paid if I do the work I've agreed to do.  If I mess up an order or an account I won't get another one.  My business depends on delivering what I said I would deliver, and being better than my competitors.  That is far from how outsourcing works.  A4e, like the others, has consistently failed to deliver, as its business grew.
     As for "massive personal risks"; I can't see it.  A genuine entrepreneur would take that apart.

The real problem for Harrison was hubris.  She believed her own PR.  She has never publicly debated with the critics of her company and herself.  Until she does that she will not be credible.

Emma Harrison answers back

The Daily Mail was the loudest voice vilifying A4e's Emma Harrison.  Now they've secured an interview with her.  Read all of it.  Get past the hypocrisy of the Mail.  What are the facts?

A4e has been "cleared of any wrong doing".  But she has had a horrible time personally.  I'm sure that's true. But what about the £8.6 million that caused the furore?  What comes out clearly from the interview is that Harrison sees herself as an entrepreneur who has invested "tens of millions of pounds" of her own money in the business and is taking all the risk.  "This was not a dividend of one year, it was a result of 25 years of work," she says.  Er, not quite.  It was a dividend of one year.  The business generated £11m of profit in one year, and as the Mail points out it was "effectively taxpayers' money".  And the taxpayers can question how all that business was obtained and whether we got value for money.  The slogan is there; Harrison says, "My mission in life is to improve people's lives."  She has never seemed to recognise the disconnect between that ambition and the reality of the experience for so many of her clients and employees.

What now?  "I could have sold the company many times over.  I could be sitting with my feet up on some fancy yacht, but why would I?  That would be like selling my life."  She says she "now intends to concentrate on a range of new projects – including promoting women in business."

The Mail article isn't accepting comments - unsurprisingly.  But no doubt readers will want to make plenty of comments.

That court ruling

Everyone who is interested in the treatment of the unemployed will know by now that the court cases brought by the courageous Cait Reilly and Jamie Wilson have failed.  There are two relevant accounts in the Guardian, here and here.  The result was really inevitable, but the reasoning of the judge was interesting.  Mr Justice Foskett said that "characterising such a scheme as involving or being analogous to 'slavery' or 'forced labour' seems to me to be a long way from contemporary thinking."  Which amounts to "most people don't think it is so it isn't".  I would love to meet the DWP spokeswoman who crowed about the victory.  "We are delighted, although not surprised, that the judge agrees our schemes are not forced labour.  Comparing our initiatives to slave labour is not only ridiculous but insulting to people around the world facing real oppression.  Thousands of young people across the country are taking part in our schemes and gaining the vital skills and experience needed to help them enter the world of work – it is making a real difference to people's lives.  Those who oppose this process are actually opposed to hard work and they are harming the life chances of unemployed young people who are trying to get on."  Read that again and remember that this woman is a civil servant who has absolutely no business making pronouncements of this kind.  The judge made it clear that, "In relation to Miss Reilly and to Mr Wilson it is important that it is appreciated that each has been actively looking for work: they have not taken their objections to the overall scheme as a means of avoiding employment and seeking simply to rely on benefits."  What a pity that the woman from the DWP couldn't understand that.

But there was one clear success out of this.  Jamie Wilson's lawyers claimed that the stopping of Wilson's benefit for 6 months was unlawful because the letter the DWP sent out didn't provide clear information.  The tens of thousands of claimants in the same position should be entitled to payments.  The DWP has reacted by both changing the letters and denying that there was anything wrong with the first one.  It could be costly, but a blessing for those who have been left penniless.  There is no clarity at the moment about whether the ruling affects people on all the various free labour schemes.

The big profits society

You wouldn't want G4S running it.  You certainly wouldn't want A4e running it.  How about Serco?  One of David Cameron's "big society" ideas is for a National Citizen Service for youngsters over 16.  Naturally someone has to make money by running it, and, according to the Observer, is in line to win 8 of the 19 contracts currently up for tender.  As with the Work Programme, charities are involved to deliver it, but many charities are complaining that they are being forced out of existence in favour of the big private companies.  The government doesn't care about that.  Indeed, it isn't capable of comprehending that there could be a problem.
The Guardian gave a platform to Martyn Hart of the National Outsourcing Association to explain why outsourcing is "here to stay".  He insists that, "Outsourcing is far from privatisation – done properly, the client remains in control at all times. The client's purchasing a service, over a long period of time: as paying customer, they are perfectly entitled to specify exactly what they want. But a key facet of outsourcing is the shared bearing of risk: the partners are in it together. Not just financially, but also in terms of reputation. If things go wrong, both brands are weakened and, in the case of the supplier, future custom is jeopardised."
Now, I understand the difference between outsourcing and the kind of privatisation he's talking about.  But it's a distinction which becomes less and less relevant when the private companies are large enough to call the shots on these contracts.  We saw it with the Work Programme; the contracts were not what the government had originally intended because the only companies large enough to bid wouldn't play unless they got their way, over attachment fees, lack of inspection and so on.  Cameron's National Citizen Service will have been designed in conjunction with Serco and others.  And the blurring of boundaries between government and these companies - ex ministers on the boards, friends in the boardrooms - works against the idea of partners sharing risk.  The only risk is to the taxpayer.  We effectively have privatisation of government.
Something else leaps out from Hart's article.  The "partners" in outsourcing do not include the people for whom the services are supposedly designed.  This is business.

Should we just give up?

It's depressing.  We should be used to it by now, and understand that money is everything, people nothing.  but we still fondly imagine that people in government will wake up one day and say, "No.  This is wrong."  Dream on.  New disability benefit test contracts have just been awarded - to Atos and Capita.  According to the Guardian, the lion's share goes to Atos.  The paper is portraying it as a blow to G4S which was in the running, and hinting that the timing suggests that the Olympic security fiasco could have ruled them out.  I doubt it.  That's not how the procurement process works, as we know.  G4S's share price went down, but it's back up now.  A fascinating article by historian Michael Wood on the BBC website points out, among other things, that G4S is four times the size of the British Army.  The embarrassment of the Olympics is just a minor glitch.  Meanwhile A4e, a much smaller player, rides its own recent embarrassments comfortably.  It preens on its website that it has been telling the Polish government how it can transform its "public-private co-operation", focussing on payment by results.

The Exaro site previews a report to be published by the University of Greenwich Business School on outsourcing which, it says, will "reignite controversy" and "provoke a furious reaction".  Sadly, it won't.  The report states the obvious; that there will always be a conflict of interest between "commercial and shareholder interests" and the public objectives.  It also has evidence that any saving of money by using private companies is short-lived.  The authors of the article go to something called the National Outsourcing Association for a reaction.  They say that people only notice outsourcing on those rare occasions when it goes wrong; it saves money and employs a lot of people.  And that, I'm afraid, will be the extent of the debate on this issue.

We are not going to change anything in the near future.  But that doesn't mean we should stop resisting.