Thursday, 11 October 2012

Private and public

Everything about Atos and its contract to carry out medical assessments is controversial.  Now there's a situation that strikes some MPs as ridiculous.  The Guardian reports that Atos has sub-contracted to an arm of the NHS in Scotland to carry out its new contract, to assess people for the new disability benefits.  The obvious question asked by the MPs is why contract to the private sector only for the business to sub-contract back to the public sector?  Why not go straight to the public sector?
But this is not new.  In the Work Programme there are a number of local councils acting as sub-contractors to the primes.  The contracts were deliberately designed to make it impossible for a public sector body to bid as a prime, so however well the councils do they will not get the full reward for their efforts.  To understand this we need to go back to the New Deal contracts prior to 2006.  Jobcentre Plus regionally contracted with many different organisations, including local councils, to deliver training.  When David Blunkett outsourced the whole thing, such organisations were relegated to sub-contractor status, losing 10% of their earnings to the likes of A4e (which secured a large chunk of the contracts).  Public sector involvement fell away.  The current payment-by-results model doesn't encourage such involvement.
Of course it's nuts to have a private company sub-contracting to a public sector body.  But the aim is to make money for the private sector.

The Public Accounts Committee has published the National Audit Office's report on its investigations into A4e.  It just fills out what we had already read.  Problems with one Mandatory Work Activity contract, so it was terminated.  No evidence of fraud in the Work Programme, but some ineffective validation checks.  The need for some remedial action to "improve levels of awareness amongst A4e staff of their Whistleblower policiyand procedures".  This was the report which angered Margaret Hodge and the committee because it was done without looking at A4e's own internal report on the fraud risks in the company.


  1. It occurs to me that the main purpose of the WP is not helping the unemployed back to work,but to ensure that the owners/employees maintain their Profits/salaries.It has been touted that a lot of the Main Providers only realize a 4%-6% net profit margin,which is inline with most businesses,but the problem being is this does not take into account the fact that they produce nothing,are paid some fat salaries and are constantly recruiting more people(with 585000 clients on there books,why not recruit some of us?)after reading about supply and delivery methods of the WP,there is very little mention of the unemployed,training or support.What do they actually deliver?

  2. Who are Salus, described in the Guardian as being “the occupational health arm” of Lanarkshire NHS? Is Salus a company that is contracted to supply occupational health services to Lanarkshire NHS or is Salus just a name for this particular area of NHS Lanarkshire’s work?

    From the point of view of a disabled person in Lanarkshire, it is a blessing that the local NHS will continue to be closely involved with assessing whether or not the person is actually capable of doing a job for someone else for most of each week, is it not?

    It would make medical sense for ALL of Atos’ work to be subcontracted to the local NHS service in every part of the UK, imho. Involving doctors who actually know about the medical conditions that have caused the relevant Benefits claimants to become sick or disabled is the only intelligent way to deal with this anyway. It makes much more sense to have properly and relevantly-qualified, experienced, competent doctors making the final decisions than having the DWP and a French IT company trying to second-guess some of the best doctors in the world, via the use of a computer tick-box that is known not to work adequately.

    The MPs who have criticised the subcontract between Atos and Salus ought to be applauding that bit. The MPs’ criticisms should be reserved for IDS, who has been rushing headlong into one pet project after another, without giving anyone enough time to do some competent, rational feasibility studies beforehand. The real blame lies with IDS alone, imho.

    1. Salus appears to be part of Lanarkshire NHS. The point the MPs were making (and I agree with) is that there is no need for a private company to be involved at all if they are just sub-contracting to the public sector and taking a slice of the profit.

    2. Hi Historian

      I agree that there should be no need to involve a middleman - Atos. However, I suspect history will prove that the original procurement contract (between the DWP and Atos) is such a muddle that the DWP couldn't prevent Atos from subcontracting to the NHS.

      This is why I think that the real culprit is IDS - because he refused to allow his fellow MPs or his DWP henchmen enough time to draft the contract with Atos properly and to make sure that it wouldn't permit the Ministerial Embarrassment that IDS, Grayling and now Hoban will all face over this. It serves Ministers right, in my view.

  3. The Daily Record are taking the credit for forcing Atos into a humiliating climb-down and having to sub-contract to Salus.

  4. Gutted,my next door mate was laid off today (apparently,this differs from being made redundant) though not actually told that he and 2 others were being replaced by workfare/apprentices placements they start Monday,the trickle down effect of this programme are apparent,make the WP work at any expense!


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