A4e's accounts

The accounts are now available for the year ending March 2014 - and the company is in profit.

If you want to examine all the figures you can download the report from the Companies House website for only £1.  But the salient points are:

• There's an operating profit of £3.2m for the full year (against a loss of £10.3m in 2012 / 2013).  EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) showed a profit of £7.6m (2012 / 2013 loss of £5.8m).  The Chairman, Robin Young, says that, "we have improved our performance on all our contracts".  
• The Work Programme continued to be profitable, and they expected it to remain so for the duration of the contract.
• The A4e office in Spain was closed and they gave up on prospects of business there because the country wasn't moving to outsourcing fast enough.
• As they stated in the previous year's accounts, no dividend was paid in 2013 / 2014.
• Young talks about their "open door policy" with MPs, and says that most of the 140 visitors "have come away impressed".
• The new IT system, Connect4Work, is working well.
• Although the company originally bid for 3 contracts (Community Work Placement, Transforming Rehabilitation i.e. the Probation Service and Job Path in the Rep. of Ireland) they decided not to submit final bids - a matter, say the directors, of "discipline".
• They are optimistic about opportunities in the "market" of people with special needs.

So it seems that the strategy of reining in their ambition has worked for A4e.

"Hang on"

Perhaps you watched the interview with Iain Duncan Smith today on The Sunday Politics.  It was much as we have come to expect, although Andrew Neil did try, for once.  But from the moment IDS opened his mouth he lied.  Neil tried to nail him on Universal Credit.  There's no need to go over the true history of that epic failure.  IDS has rewritten history, as he always does.  He is the hero who spotted what was going wrong and got it all sorted out, and now it's all going swimmingly.  Neil confronted him with graphics to show that a normal, low-paid family in his own constituency would be worse off.  But it's pointless confronting Smith with figures; they don't register with him.  Today he was shown a graph and maintained completely different figures.  Whenever Neil tried to move on to a different point, Smith said, "Hang on," and reiterated the falsehood he was insisting on.  There was one whopping, blatant lie which stood out.  "The Treasury hasn't signed off Universal Credit," said Neil.  "Yes it has," said IDS, and nothing could move him.  Neil hates this, so after the interview he produced confirmation in the form of a direct quote from a Treasury official at the Public Accounts Committee recently.
The Feeding Britain report was brought up.  The bulk of people needing food banks were suffering benefit delays and sanctions.  No, "benefits were now being paid more quickly - from 88-89% being on time under Labour, to 96-97% now."  I have no idea whether that's true, but since IDS said it I assume it isn't; certainly the delays are much, much longer now.  And anyway, he said, food bank use "is tiny in proportion here compared to a place like Germany which has more generous benefits and in which you have a higher level of pay.  So just saying it is to do with benefits is quite wrong. What I do say is there are lots of other reasons lots of people go to food banks."  For Andrew Neil it must have felt like banging one's head against a brick wall.
There was nothing to provoke a headline until the end of the interview.  He was shown clips of various ministers saying that the "welfare" budget would have to be cut still further.  Where would those cuts fall?  Would you limit child benefit to two children, asked Neil, echoing something the hard right has been pushing lately.  IDS said he would certainly consider it.
We can rant and rage and heap abuse on this man.  But try to take a step back and consider what's going on.  Does Smith actually believe what he says?  Or does he know that he's lying and not care?  I suspect it's a bit more complicated.  We have a toxic combination of fixed ideology and grandiose self-delusion.  And it persists because his party loves it.  Who else could they find to do their dirty work for them with such enthusiasm?  Possibly Chris Grayling.  But all the other Tories who would do the job with gusto are even more stupid than Smith (think McVey, or Philip Davies or Alec Shelbrooke).  Those with ability tend to maintain a tiny morsel of compassion.  So IDS sails on.

Feeding Britain

The report on hunger came and went.  For the media it was a one-day wonder and then they moved on.  The coverage elicited the expected denial and incomprehension, and nothing will be done.

The report, unfortunately, conflated two unrelated issues; the huge wastage of food, and the fact that large numbers of people can't afford food at all.  This allowed the media to focus on the first and to give the impression that the surplus food now thrown out could feed the poor.  There are, in fact, several organisations such as Fareshare which collect surplus food from the producers and retailers and pass it on for distribution to those charities which feed people; but they can't pass it on to food banks because it's fresh food which can't be stored by those food banks.  And anyway, that would not solve the problem of why people are going hungry.

It was important that the report brought out the reasons for food poverty.  It drew on the figures collected by the Trussell Trust to show that the majority of users are suffering from benefit delays and sanctions.  How did Iain Duncan Smith respond?  According to a Guardian report, he "promised to respond positively, telling MPs "“We want to do everything we can to make sure that people do not stumble into a process of sanctions”.  But on the same day the paper reported, "It is also unlikely that the Department for Work and Pensions (DWP) will shift its stance on the administration of benefit sanctions, even though the report says they are the single biggest reason for the poor resorting to food banks. DWP sources said it was very clear at the start of a benefit claim what was required of a claimant and there would be consequences for failing to meet that commitment."  The FT commented on a suggestion by Nick Clegg, among others, that there should be a sort of "yellow card" system for sanctions, a warning before an actual sanction was imposed.  Many of us would endorse that, and could come up with detailed plans for how it could work.  But, "aides to Iain Duncan Smith, work and pensions secretary, argued that the yellow card warning system was 'not necessary' because jobseeker’s allowance claimants were now required to sign a 'claimant commitment'. This left them in no doubt as to the obligations they were required to fulfil in return for their social security."  So IDS's pious words in the House of Commons were nothing more than pious words.  He did say that he would ensure that people are informed about hardship payments; but neglected to tell his colleagues that such payments are a pittance and don't kick in immediately anyway.
At least we know where Business Minister Matthew Hancock stands.  He said that that food banks had only increased “because more people know about them” and that poverty in Britain “coming down”.

I could point you to numerous articles about the report and the fall-out from it.  But you can find them for yourself.  The fact is that nothing will change.  At PMQs today Clegg, standing in for Cameron, reeled off lie after lie, apparently believing what he was saying.  

And the poor get poorer

The most telling comment on Osborne's Autumn Statement this week came from Matthew Taylor in a discussion on a BBC programme.  The worst thing about it, he said, was that no one, not even Osborne, believed a word of it.  Those crunching the numbers afterwards came up with a terrifying vision of what the Tories are aiming at; a country which would be back in the desolate and dangerous world of the 1930s, with "the state", that part of the national income spent for the benefit of everyone, reduced to almost nothing.  Certainly there were plenty of hints about slashing "welfare" even further.  I was puzzled by one announcement, which was slipped through barely noticed by the commentators (because it doesn't affect them): the rates of Universal Credit are frozen for those in work (see the Independent's article on this).  Now, I can't make out whether he was just talking about UC, which won't affect most people for some time, or whether he was trying to pretend that everyone is on UC and it will actually mean working tax credits are frozen as well.  There's a good article in the Mirror on why Osborne's vision is so appalling.
In case you want to play the game of blaming someone other than the government and start muttering about pensioners, there was a nasty hidden surprise for many of them.  The so-called triple lock should have given them an extra £2.85 a week, but most of that will be lost as pension credits are lowered; so only those pensioners who don't qualify for extra benefits, i.e. those with private pensions and / or large amounts of savings, will get the full increase.
In the midst of all the gloom and doom there was some good news for A4e.  They have new 2-year contracts to deliver the New Enterprise Allowance mentoring scheme in a further three areas of Scotland.
The Scottish government is furious with the UK government over the Work Programme.  As part of the devolution agreement Scotland is to have control over welfare programmes there, but not UC.  The Smith Commission spelled out that this would include the WP when the contracts came to an end in March 2016.  Like many English councils, the Scottish government wants to devise suitable, flexible support for the unemployed.  But it was told on Tuesday that the current contracts are to be extended for a year.  The UK government says that this was agreed in August, long before the Smith Commission was set up.  So tough.
There are only 6 days left to get evidence to the Work & Pensions Select Committee for their enquiry into benefit sanctions.  The DWP will maintain its lie about sanctions only being used as a last resort, as they've done in an article today in a Scottish newspaper.  I would love the enquiry to conclude that the DWP is deliberately lying and make that known.

Marking time

Right, I'm back.  Sorry about the hiatus.  What has been going on in my absence?

On the A4e front, very little.  There is no news about the fraud trial, which surely should have finished by now.  But FE Week reports that the £17m London prison education (OLASS) contract, which A4e gave 3 months notice of handing back in August, will continue in A4e's hands until the new year, because the Skills Funding Agency can't find any college willing to take it on.  This seems to back up A4e's claim that the contract was no longer viable.  The prison system is in such a mess that prisoners are being shifted around too often to make education possible.  

On the wider subject of "welfare", I don't need to detail the antics of Iain Duncan Smith.  He was on Radio 4's Today programme on Tuesday, setting out the new timetable for Universal Credit.  Mishal Hussein, who interviewed him, raised the obvious points about missed targets and wasted money.  Now for IDS, that is not how the BBC should behave.  The interviewer should just listen respectfully to whatever fantasies he chooses to spout.  I feared for Hussein at the time.  And sure enough, the next day IDS was reported to have lodged a complaint about her being "negative".  At the same time the National Audit Office warned that any further delays in UC would be hugely costly.  It said that there were no contingency plans to deal with delays.

There's a report in the Independent today about single parents being wrongly threatened with sanctions, or having those sanctions imposed.  I was struck by the blatant lie in the DWP's response: "Sanctions are a necessary part of the benefits system but they are only used as a last resort for a tiny minority who don’t follow the rules and hardship payments are available if people need them.”  This is utterly dishonest propaganda.  But then, if the man at the top of the department is a fantasist it's going to permeate the whole organisation.

Sanctions and lies

The Work & Pensions Select Committee has launched its inquiry into benefit sanctions, something which owes a lot to the tireless pressure of Debbie Abrahams MP.  But if you read its terms of reference (here) you notice some important things missing.  First there's the actual process of sanctioning; the automatic stoppage of money which can't be reversed if it's found to be a mistake.  This is crucial to expose the lie that sanctions are only ever used as a last resort.  And then there's the question of arbitrary sanctions applied by JC or WP staff just because they feel like it or have targets to meet.  The inquiry must hear from victims and whistle-blowers or it's pointless.  The page makes it clear that they can't investigate individual cases, but don't let that stop you if you want to submit evidence.

It gets wearisome to report on Iain Duncan Smith's character and lies.  He knows that he is untouchable and his arrogance has grown to monstrous proportions - as has his rudeness.  There was an incident this week in the House of Commons which demonstrated what one MP called his boorishness.  He had remarked that Rachel Reeves MP, his Labour shadow, "couldn't be bothered" to turn up to vote in a particular debate.  She raised a point of order demanding an apology; he had no knowledge, she said, of why she wasn't there.  IDS showed his contempt by saying something about her being in Rochester (for the by-election).  Reeves denied this and repeated her demand for an apology.  She didn't get one, of course.  This wretched man just smirked.

Then there were the "angry scenes" described in the Mirror at the Work & Pensions Select Committee's hearing yesterday.  Now, I missed this part of IDS's "evidence".  I'd stuck it out for an hour, but couldn't bear any more.  So I didn't hear Debbie Abrahams' ask him about the numbers not included in the unemployment figures because they were sanctioned.  According to an Oxford University study this figure could be as high as 500,000.  IDS's response was that this was "ludicrous".  Ms Abrahams said, "People have died after being sanctioned, Minister."  The response?  "No, I don't agree with that."  The last line of the Mirror's story is, "A DWP spokesman dismissed the study, saying 'It looks to be partially based on unreliable data.'"

This disgusting man and his disgusting department put out a press release today which claims: "More than 12,000 households have made the choice to move into work or stop claiming Housing Benefit because of the benefit cap".  He's been warned about this before; it's a complete falsification of the data.  But the London Evening Standard allows him space to amplify this claim, with the arrogance of the seriously deluded.

Ironically, the Public Accounts Committee reported today on the "scandalous" failure of the Work Programme to help ESA claimants.  The Independent covers this.  It also ends with a meaningless quote from "a DWP spokesman".  I do wish papers would stop giving space to this person.

Nothing is going to change.  And if there is a Conservative majority next May it will get much, much worse.

Everything must go

The government is in a desperate hurry to sell off whatever it can of the remaining shreds of the public sector.  Yesterday it announced the winning bidders for the Transforming Rehabilitation contracts, that hugely dangerous outsourcing of probation services.  As we can see from the Guardian's report on this, two companies get more than half the business.  Sodexo gets six areas, Interserve five; of the rest of the 21 areas, Working Links gets three and Ingeus two.  All have signed up charities to do the work.  Between them they will handle more than half of the probation service work, with supposedly medium and low risk offenders.  Their profits will be on a payment by results basis, albeit under a more complicated system than that of the Work Programme.  G4S and Serco had to withdraw their bids because they are still under investigation for fraud.  A4e, we understand, also withdrew from the process.
It's bad enough that such we have to watch this vital work flogged off for private profit.  Worse is the fact that the companies' profits have been insured against a new government pulling the plug on these contracts.  They are guaranteed their expected profits for 10 years!  So it would be ruinously expensive to cancel them.

We also heard yesterday of the company replacing Atos in the WCA contracts.  It's Maximus, an American company with as dreadful a record in the US as G4S and Serco have here.  For details, look at this piece on the Disability News Service site.  We can't know the financial arrangements that brought Maximus into this, but we should.

We learn from the Guardian that the government is pressing ahead with another disturbing outsourcing scheme; that of child protection services, currently the responsibility of local councils.  A lot of people are not aware that private companies already run children's homes, looking after the most vulnerable children for profit.  Now the government wants to take child protection out of the councils' hands altogether.  It might be thought that, given the stream of news recently of councils' failings in this area, it couldn't be any worse.  But councils are accountable for what they do.  Private companies just want to make a profit.

You will have read today that the government has considered cutting ESA to only pennies above JSA level.  It denies that it's actually going to do it, and the cries of protest will probably stop it this side of an election.

Two verdicts on Universal Credit

Two programmes looked at UC last night (I had to catch up on both online this morning).

The first was a Channel 4 Dispatches programme.  Now, Channel 4 brought you Benefits Street, and the producers of that pernicious propaganda recently insisted that they wouldn't be "censored" and will go ahead with the next rotten slice; so could we trust the channel to do something truthful on UC?  Amazingly, yes.  Liz MacKean, a real journalist, went to Warrington earlier this year to look at how it was working.  They found four claimants, who could never be describes as scroungers, who had suffered problems and hardship because of mistakes, delays, confusion and poor staff training.  There were tales of the system not being able to cope with a change in circumstances; of the huge hike in rent arrears and debt.  A whistle-blower from a DWP service centre spoke of staff being overwhelmed by the workload.  Significantly, perhaps, it was Mark Harper, the newish minister for the disabled, who was put up to answer for all this.  He seems to be the new face of the DWP; Iain Duncan Smith and McVey are both, perhaps, seen as liabilities.  Harper talked blandly, of course; but there seemed no recognition that real people are suffering real harm as they "learn from their mistakes" at the DWP.

The second programme was a Radio 4 Analysis episode.  Most of it is summarised in the presenter's own piece in yesterday's Guardian.  Jonathan Portes used to work at the DWP so has an insider's view of what has gone on.  The radio programme was striving for "balance".  We got Kwasi Kwarteng, a Tory MP, making excuses for Duncan Smith.  Worse, we got a sizeable contribution from Fraser Nelson.  He's the editor of the Spectator, a small circulation right-wing magazine, and he also writes for the Telegraph, for which he has produced the most deluded tosh about "welfare reform".  He repeated it on the radio.  (For balance, Margaret Hodge told the truth.)  We got a damning description of the failures of IDS, in UC and in the Atos fiasco.  There was no mention of the dreadful damage that's been done to real people because of IDS's delusions, just a description of the financial costs.

Everyone except IDS seems now to agree that UC is a write-off, and will be ditched whoever is in power after May.

Harking back to yesterday's post, A4e have tweeted an apology.

Whose fault?

One of our regular commenters (is that a word?) has been pressing a story on me which I saw yesterday and was a bit reluctant to post about because it's not clear who is at fault here.  The story appeared in the Liverpool Echo first.  It concerns a 58-year-old unemployed man (worked all his life, made redundant) who was told by the Jobcentre that he was to be referred to A4e.  He then had a heart attack.  His wife phoned the Jobcentre and asked them to inform A4e.  The man lay in hospital waiting for major surgery.  But a phone call was put through to him - from A4e.  This is where it gets contentious.  The message about his illness obviously hadn't got through, but the DWP's comment is that "correct procedures had been followed"; that actually means, "I haven't a clue about this case but it wasn't our fault".  A4e says they didn't know about his illness, which is feasible, but they also say that they ended the call as soon as they realised Mr Rogers was in hospital.  But Mr Rogers himself says, "This guy was persisting about wanting to discuss the next plan of action but I said I was ending the conversation and put the phone down.”  Whichever, it's not good publicity for A4e, especially as the Mail has now taken up the story.

There's a programme on Channel 4 tonight about Universal Credit.  Should be worth watching.

Bad news and no news

There's a bit of news today which provides no comfort for A4e.  Big reforms to pensions come in next year, and the government has recognised that people will need advice and guidance.  It was expected that the Money Advice Service (MAS) would be the outfit to deliver that; but no.  The Pensions Advisory Service will deliver the non-face to face guidance, while Citizens Advice will handle the face to face service.  What has that got to do with A4e?  Well, it's A4e which has the contract from MAS to do the face to face money advice, a fact which is still nowhere mentioned on the MAS website.  So what might have been a new source of work for A4e won't be.

The "no news" refers to the silence over the Slough fraud case.  If you need a reminder, there's this from the Daily Mail.  Five A4e employees were convicted of fraud early this year, having pleaded guilty to using forged paperwork to make false claims.  Sentencing was delayed, presumably until the trial of the remaining 8 accused, who were, we were told, due to go on trial in October.  I assumed that these ex-employees had pleaded not guilty, hence the delay.  Okay, there are two weeks of October still to go, but will we hear any more of this case?  I know it's small beer compared to the massive frauds by G4S and Serco, apparently forgiven by the government.  But we need to hear the full story.

The future of work

If you didn't see the Panorama programme last night, you really should.  It's on iplayer.  It's called Workers on the Breadline and is a real eye-opener for those who think poor people are all idle and feckless.  It looked at working people whose incomes have to be topped up by tax credits.  (The presenter used the word hand-outs a lot, and I objected to that, but perhaps he was just reflecting the language of the right-wing press.)  There were couples where both partners worked (and had no more than three children) but even with WTC were living on the edge; and there was a single man, Jason, working in a zero hours job, earning around £10k a year and getting only £300 a year in WTC.  These were real people, struggling (and in Jason's case drowning) and knowing that it will only get worse.  It was pointed out that working overtime or extra hours isn't the answer because you lose most of your benefit, and for people with children the cost of childcare is impossible.  I haven't seen the BBC do anything this competent and important for years, so it's sad to learn that they're ditching all investigative reporting from Panorama.  There were no politicians waffling; the positions of the two main parties were set out succinctly.  And two authorities offered no solutions, admitting that Britain has become a low-skilled economy and wages are far too low.  While education and skills would seem to be important, one said, if you come out of university and the only work you can get is stacking shelves, that in itself isn't the answer.
There was a disturbing report from Liverpool on Saturday that half the jobs on Merseyside are now temporary agency jobs.  (See this Liverpool Echo piece.)  Agencies like Prime Time get hand-outs from the government to take people on under the Work Programme then pay them so little that, after travel costs, they can come away with £3.72 an hour.
This is a lunatic downward spiral.  Of the families featured on the Panorama programme, one husband and wife both work at Tesco.  But they can't afford to shop there.  All the big supermarkets are losing market share to the discounters.  And that's just one obvious result of how making people suffer frozen wages and benefit cuts impacts on the economy as a whole.  Those at the very top rake in a bigger and bigger share of the nation's money, but they don't spend it down at the supermarket.

What is the answer, then?  Raising the minimum wage is an obvious part of it, despite the protests of business that they can't afford it.  Genuine skills training has to be in there too.  Jason said in the programme that the only way he could see of getting a better job was to have a driving license, but he obviously couldn't afford driving lessons.  Why not set up a free driving school for people in his position?  And anyone who has spent years working in a particular industry and then loses his job should be re-trained.  Another component is to get rid of all the free labour, workfare schemes which allow companies to avoid actually hiring people.
The answer is not the Work Programme.  Both Labour and the Lib Dems have come round to the idea that local councils have to be in control of this.  They couldn't just end the contracts but they could negotiate changes which would give councils the power to commission programmes suited to the needs of their areas, and to use the money currently being wasted on the WP to fund the the schemes many councils are already operating in conjunction with skills training organisations.

The status quo is not an option for much longer.

Quick question

I'm not clued up on Working Tax Credits, but I'm sure some of you are, so answers, please:
If someone who is on WTC gets more in their pay packet, through a rise in the minimum wage, or a rise in the tax threshold, do they get a corresponding decrease in WTC, so that their income remains the same?  Yes, no, more complicated?

The shape of things to come

So now we know what's in store if we get a Conservative government in May.  Benefits will continue to be frozen - everything except those for the disabled and the elderly.  This includes ESA for the WRAG group and working tax credits.  It will affect 10 million people.  We're told that this is in the interests of fairness, because wages are static.  Now before anyone starts blaming pensioners because we're safe for the moment, just think that you'd be doing exactly what the Tories want you to do - turning your anger on the wrong people.  It's not only that pensioners vote in greater numbers than young people (and it's a myth that we most often vote Tory), it's that exempting us deflects the wrath and persuades some people that it's all our fault.  It must not be a case of everyone should suffer except the wealthy.  And you can be sure that they will come for us after the election.
For young people the prospects are very bleak.  You will get work (probably a bogus apprenticeship on £2.73 an hour, or an unpaid "internship") or you will be sentenced to community work.  Don't ask where that community work is going to be found, that will be up to the outsourcing companies that get the contracts.
That was just from George Osborne.  It left Iain Duncan Smith with a couple of announcements.  Universal Credit will be rolled out across the country next year.  (Stop laughing.)  This morning we learned that the chap in charge of it, Howard Shiplee, has quit.  He has been ill for some time.  And - the real shocker that has barely been reported by large parts of the media - IDS, without waiting for the election, is trialling the payment of benefits on smart cards, aimed at those with bad habits so they can't spend their money on alcohol or drugs.  It's for the good of their families, of course.  Apart from the moral issues here, which we've examined before, the practical issues are huge.  Not least, there is no way of stopping the trading and selling of these cards to put cash in the claimant's pocket.  And it's very clear that this would be the only way of paying benefits under a Tory government.  How does this fit with Universal Credit, which encompasses housing benefit?  Will a landlord have to accept the card?
Before anyone starts advocating UKIP as an alternative, their welfare policies are equally disgusting.

Where are they now?

There was a time when A4e would have a stand at all the main party conferences, touting their services.  I doubt very much whether that's the case this year.  How times have changed for this company!  We don't know what their financial situation is, and won't for at least 3 months, but it was pretty dire a year ago.
Gone are the days when owner Emma Harrison could pocket £8.6m in one year.  For a few brief years she enjoyed the spotlight, the celebrity status, rising to the dizzy heights of adviser to the government.  And then it all came crashing down.  An attempt to rehabilitate herself with a Channel 4 News interview in 2012 just resulted in car-crash TV.  So where is Emma now?  There have been no sightings reported.
Mark Lovell, as we reported in July, left A4e this year and went to something called The Social Assistance Partnership.  He had been with A4e since the beginning, and his departure marked the end of the original company.
Our favourite A4e director, Jonty Olliff-Cooper, left of his own accord, or so it was said.  Nothing to do with that offensive tweet, of course.  He is now working for something called "The Young Foundation [which] is a leading independent centre for disruptive social innovation. We create new movements, institutions and companies that tackle the structural causes of inequality."  Yes, well.  Effectively Jonty has also dropped off the radar.
After it all went horribly wrong, A4e engaged the services of a PR company close to Chancellor George Osborne to try to change their image.  The advice seems to have been, "Become invisible".  There are very few planted pieces in the local press these days, and the bosses avoid publicity like the plague.  The Company has shrunk its business and faces increased competition for the contracts on offer in the UK.  They pulled out of prison education contracts because they couldn't make them pay (and that doesn't appear to have been entirely A4e's fault) and are not in the running for the probation service contracts.
For a blogger following the company it's all a bit frustrating.

Job opportunity?

Just a quick post to point you jobseekers towards an opportunity you might have missed.  It's here on the Directgov site: Trainee Cafe Apprentice.  Yes, for £2.73 per hour for a 40-hour week you can train to make sandwiches and wash pots in a sandwich shop.  And you'll get an NVQ2 in Customer Service.  Is this one of the wonderful new private sector jobs the government is boasting about?

Fact and fiction

The party conference season is always depressing, but this year it's frightening as well.  I've taken to avoiding the BBC's news and politics output altogether.  So what are the important issues which are not being talked about?  
Outsourcing (or privatisation - in the public mind they're the same thing) should be in the forefront.  It is in the clamour about the NHS.  As private companies move in to pick up contracts it's pointed out that i) many are American and ii) many MPs have financial interests in them.  But creeping privatisation is happening in lots of areas.  The academy chain AET has gone into an arrangement with accountants PriceWaterhouseCooper to outsource all its non-teaching staff.  It won't stop there.  
There's a great piece by Patrick Butler in the Guardian which shows that outsourcing is about driving down costs by cutting wages.  Around 5.4 million people now work in outsourced public services, and it's being driven, particularly in the "care" sector, by the cuts to local authority budgets.  That's how this government has achieved its aim, by pushing the responsibility back onto local councils and then claiming that it's their fault.
How is that veteran of outsourcing, the Work Programme, going?  Swimmingly if you believe the government.  But the Welfare News Service site did an excellent analysis of the figures showing just how badly it's letting down the unemployed.  A4e, of course, spun it frantically.  "A recent report by Europe Economics, an independent research company commissioned by the Employment Related Services Association, has also estimated that around 100,000 jobs for the long term unemployed would not have taken place without the programme and that £18 billion in value to the UK economy is likely to be generated by the Work Programme."  Neither of those figures bear examination.  
Let's hear some pearls of wisdom from Leo McKinstry of the Express: "Under Work And Pensions Secretary Iain Duncan Smith the Government has rooted out abuses, introduced tough sanctions, ensured that work pays more than the dole and tackled the housing benefit scandal where jobless claimants could live in luxurious accommodation courtesy of the taxpayer."  In any field except journalism and politics this would be regarded as symptomatic of delusional illness.
If you have thoughts on the conferences relevant to this blog, please comment.  (I don't promise to publish unless you stick to the rules, basically be relevant, literate and polite.)

The outsourcing scandal revealed

When it was revealed that G4S and Serco had been overcharging by millions on the offender tagging contracts we were assured by Chris Grayling that they would be barred from bidding for any more contracts until a thorough investigation had been carried out (including an investigation by the Serious Fraud Office).  But then, a few days after G4S were pronounced "cleared" (though not be the SFO)
they were included in the list of bidders for the probation contracts - so they must have been tendering while supposedly barred.  Well, it's now clear; they were never barred in the first place.  That's just one of the revelations to come out of the latest hearings of the Public Accounts Committee.  As the Guardian reported on Monday, the chair of the PAC, Margaret Hodge, was shocked.  The hearings continued today, and the shambles which outsourcing has become was laid bare.  Two of the top civil servants in the procurement area are fairly new in the job, and have bags of experience.  They were interviewed today, and said they had found that the people doing the work didn't have the skills, experience or competence for the job.  There was no contract management.  Applications to vary the contracts were numerous, and with one particular contract there had been so many that no one could now remember what the original contract specified.  Basically (although they didn't put it like this) the companies have been running rings round the government.
There is obviously a lot more to come out about specific contracts.  Right at the end Margaret Hodge reduced the G4S chap to quivering silence when she demanded to know if it was true that in the probation contracts it was specified that if the contract was terminated by either side before it was completed, the company would get the full amount of the contract.  Apparently it is true - and she didn't like it.
The last Labour government started this outsourcing bonanza.  When the coalition got in they didn't stop to find out whether the competence was there to do it; they just went ahead and outsourced everything that hadn't already been flogged off.  And we have been paying the price.

News round-up

With so much going on in the world the media, particularly the BBC, can happily ignore the issues which concern the poorest in Britain.  They managed - just - to report the fact that the government lost a vote on the bedroom tax.  It was a private member's bill, introduced by a Lib Dem (!) to water down the current rules by exempting disabled people who need the extra room or have adapted homes, as well as those who can't be found a smaller home to move to.  Labour backed it and the government lost by 306 votes to 231.  It will now go to committee stage and is unlikely to get through its third reading and into law.  But it's a start.  Unfortunately the BBC managed to spread misinformation.  The website piece says that the original changes "were designed to ensure social tenants get the same treatment as private tenants, who do not get any rent support".  I don't know what he means by "rent support", but this suggests that private tenants don't get housing benefit, which is untrue.  The piece also quotes Iain Duncan Smith as claiming that the changes would cost the Treasury £1 billion, a figure which is as accurate as all IDS's numbers.  

Then we read about the "attitude to work" assessments which the gormless Esther McVey is now going to impose on the unemployed.  It's an idea borrowed from Ingeus, apparently.  You can read the Daily Mail version if you really want to, or the less hysterical version in the Independent.  Although she's presenting it as voluntary, and as a way of not putting people on courses they don't need, there are obviously fears that it will be another way of catching people out and sanctioning them.

On the outsourcing front, there was an interesting article in the Independent about the race to, in effect, privatise the probation service.  It suggests that there are 5 companies involved - Capita, Sodexo, Amey, Interserve and Carillion - and that they would be well advised to have nothing to do with it.  They are very unlikely to make a profit.

Finally, please read the Guardian piece by John Lanchester about poverty and inequality.

Proud to work?

The DWP Press Office has been infamous for a long time.  It's staffed by civil servants who are supposed to adhere to the Civil Service Code, which says that they should have "integrity, honesty, objectivity and impartiality".  But perhaps they're working under the direction of the DWP's Director of Communications, Richard Caseby, who appears to have no such scruples (he's a former managing editor of the Sun).  Back in January the Press Office put out a press release referring to "welfare hand-outs", a term the Daily Mail obligingly repeated.  Then last week came this:

There was no pretence that this was anything other than straight-forward propaganda.  Objective and impartial it was most certainly not.  But I bet the intern (unpaid?) who gets to do the graphics has fun.

Today they attempted a rather different Twitter campaign, one which the Press Office didn't invent but which has decidedly sinister overtones.  It's called "Proud to Work", and it seems to be the creation of the ERSA, the work programme providers' trade body - but clearly they are all working together with this.  The DWP re-tweeted the highly dubious statement that the "Work Programme will deliver £18bn to economy".  Immediately afterwards came re-tweets of stuff from Interserve, A4e and Working Links (not on this screen capture).

What I find most disturbing about this is the "proud to work" tag.  It's subtle.  It suggests that those who are not working are not proud, have no pride.  It suggests that unemployment is voluntary, the result of lack of self-respect.  Perhaps it suggests other things to you.

Is there anything that can be done about the DWP Press Office?  Not at this stage in the parliament, I think.  There doesn't seem to be any mechanism for opposition MPs to complain about it effectively.  What it proves, however, very clearly, is that this government, and Iain Duncan Smith in particular, work closely with the right-wing press to spread lies and damaging propaganda.  If they win in 2015, it will only get worse.

Down the drain

With all that's going on, who is taking any notice of outsourcing?  Even the galloping privatisation of the NHS receives no attention from the mainstream media.  It's down to the "left-wing" papers to bring the occasional bit of news to our attention, but unless you read Polly Toynbee's excellent article in the Guardian back in May you would have little idea that anything significant was happening.
We don't know the situation with A4e, but the chances are that its finances haven't improved much, if at all, since March 2013, the date of the last published accounts.  And they're not the only ones in trouble.  Both Serco and G4S have gone into the red, and the publicity is all negative.  Quite right too; think of those electronic tagging contracts which both companies used to rake in money they weren't entitled to.  They've had to pay it back, but there have been no prosecutions.  Why?  For two reasons, I think.  One, that a court case would have exposed the fact that it was government processes which allowed them to overcharge by millions.  And two, that they have become indispensable to government.
Let's go back a bit, to the heyday of the last government when outsourcing became all the rage.  Some companies, like A4e, chose to concentrate on particular areas of business, in their case where the commodity was people.  Others, like Capita, specialised in "back-office" functions, focussing on IT systems and processes.  Serco and G4S both started life as security firms, and cashed in on the bonanza that was outsourcing in that field.  But they soon branched out into anything that was going.  They learned that there are a number of rules to the game:

1. Bid for everything.  That means employing a large number of bid-writers who know exactly how to write the tender.
2. Bid low.  Offer to do the job for so little that not only can you not make a profit but you can't fulfil the contract either.  It doesn't matter.  Just get the contract.
3. Renegotiate.  Having embarked on the job, announce that you need more money to complete it.

So Serco in particular have scooped up contracts for everything from prisons to council call-centres, trains to welfare-to-work, electronic tagging to forensic science laboratories.  How can they possibly know enough about any of these specialist areas?  Simple.  They take over a service that's already being run by someone else and employ their staff (not all of them, of course, got to keep the costs down).
But now they are coming unstuck.  Serco announced a little while ago that it was pulling out of the healthcare market altogether.  This comes after it made a mess of the GP out-of-hours contract in Cornwall and had to hand it back; and now we learn, from the Independent, that it has been overcharging the NHS by millions for pathology services through a firm it set up in partnership with two London hospitals.
But healthcare is just one area.  There are plenty of companies ready to step into that market.  Meanwhile Serco, along with G4S, Capita and the others move on to the next contract.  Sometimes they don't even have to go through the tedious bidding process; contracts are just handed to them.  Often now the whole outsourcing procedure is tailored to the demands of these few companies, making the idea of competitive tendering a nonsense.
If some companies go under, others will step in.  The competition comes now not from UK firms but from overseas companies like Atos, who've discovered just how easy it is here if you know the rules.  And we, who pay for it all, can do nothing about it; we can't even know what's happening because of "commercial confidentiality".  All we know is that it's money down the drain.

Negativity

I was brought up to believe that the worst thing you could ever call anybody was a liar.  Even when they clearly were.  Even when it was Iain Duncan Smith.  But (I'm sorry, Mum) I have to say it.  Esther McVey lied today in the Mail and the Express.  Since the quote is the same in both I have to assume that it's her lie, not the papers'.  "‘I meet with thousands of young people a year and they all say the negative picture painted by opposition politicians about young people and their bleak future has a very negative effect on them."
You can imagine it.  She's got a captive audience of unemployed kids in a jobcentre or somewhere, and every single one of them says, "Well, it's Labour telling us how bad things are, and there's no future."  
You may say it was just exaggeration.  But what about the substance of this mendacious piece?  Try the Mail's lengthy version.  Count the number of assertions which are simply not true.  The Express resorts to quoting the Mail, but at least it gives Rachel Reeves the chance to describe the comments as "pathetic".
We could dismiss all this as tripe, and rather desperate tripe at that, were it not for a piece on the Huffington Post site which makes it look like part of a concerted effort directed by Lynton Crosby, the Tories' campaign guru.  We heard this week that self-employment is at its highest level since records began, and that of the 1.1 million people who have started a job since January 2008, two thirds are self-employed.  (The figures are on the BBC news site.)  Over the last year it's over half of new "jobs".  But all is wonderful according to scary Tory MP Matthew (call me Matt) Hancock.  "There are more jobs available than ever before in this country, the vast majority of the jobs are full-time contracts of employment, and there has also been a very strong growth in self-employment. " [my italics]  This is simply not true.  The article gives plenty of space to voices refuting Hancock's claims.
But it seems that the tactic is simple.  Get out there and lie.  Blame Labour.  Deny the figures.  Just lie.

The rich get richer .....

Economists are puzzled.  The figures show that the numbers in work are rising, the numbers claiming benefits going down.  And while, of course, the figures are false for various reasons, the trend is still there.  But the economists' models aren't working.  More people in work should mean that wages are rising; but they're not.  If anything, they're falling.  And more people in work should mean that the tax take is higher; but it's not.  Explanations are cobbled together, some of them more plausible than others.  But I think there's a straightforward story.
At the top of society (if that word has any meaning now) is what's often called "the one per cent" and what I will now call the elite.  They comprise three main groups; the top of the financial industry (banks and the like); the top of big businesses; and the top of government.  They are all inter-connected, know each other well and have a common purpose in making themselves richer and more powerful.  In 2008 the elite crashed the financial system.  Bankers were blamed, but politicians had failed to regulate banking effectively (the Conservatives, in opposition at the time, had wanted even less regulation).  Now, some people claim there was a conspiracy among the elite to do this.  I don't know if that's true, but the result was the same.  Someone had to pay to put the system back together again, and it wasn't going to be the elite.  They suffered not at all.  Many of us were astonished that nobody could be held accountable; there was no criminal responsibility.
The crash was a marvellous opportunity for the elite.  To pay for the failure of the bankers we were to undergo "austerity".  It took a while for us to realise what that meant.  Those at the top of the tree could have a tax cut.  The elite were sitting pretty, as were those in the next layer down, those on £100k a year or more.  These are the people whose pay continued to climb and whose accountants devised ever more complex schemes to get them out of paying back any of their income in tax.  Salaries for top earners, along with bonuses, grew to absurd and obscene levels.  "Austerity" only began to be felt further down, in what we might as well call the middle classes.  Their pay stopped rising but their outgoings didn't.  Many who worked in the public sector found themselves out of work altogether, or having to get by on much less than they were used to.
The elite seized the chance to flog off what was left of the public sector.  Services should be making profits for them.  That could only be done by employing fewer people on lower pay, but that was part of the process of channelling money upwards into the pockets of the elite.  In what little remained of the public sector, pay was frozen.  This gave private employers more reason to freeze pay as well.  For people near the bottom of the heap - the old "working class" - the minimum wage became what it was never intended to be, the normative wage.  And that didn't rise either, except by an insignificant amount.  Employers found new ways to lower their wage bills.  Permanent jobs became casual work via agencies, with workers never knowing what, if any, hours they would get.  Then the "zero hours" notion spread, with even greater insecurity of income.
The cost of living, though, rose inexorably, and more and more working people couldn't survive without top-up benefits.  The biggest cost was housing; but there was no thought of capping rents, or even restoring some sensible regulation.  Instead, the total benefits a household could receive were capped.  For those right at the bottom of the pile, those dependant on benefits, life was made harder and harder.  They were the scapegoats, apparently the cause of all our problems.  Taking money away from them had little effect on the economy, but worked politically.  So inequality has reached unprecedented levels.
Economists believe that there is a natural limit to inequality, because at some point there will be a revolution - unless there is a particularly repressive government.  But the chances of revolution are very low.  Radical change was brought about in the past because people could organise themselves into an effective force.  Yesterday was the 195th anniversary of the Peterloo Massacre.  A crowd of up to 80,000 people had gathered in Manchester to demand change, but government forces killed 15 people and injured many more.  It wasn't the end of revolt, but the beginning.  Chartism very nearly succeeded, let down only by poor leadership.  The trade union movement grew stronger until, through the 20th century, it brought about a shift in power and decent wages and conditions for working people.  The movement was squashed in the 80s and is much weaker than it was.  There is no organisation through which people can fight back, and right-wing governments are adept at pitting the not-very-rich against the poor.
What happens now?  I have no idea.  But economists had better devise some new models if they are to understand what awaits us.

A4e pulls out of another prison contract

One of our commenters broke the news yesterday, but now we have confirmation and the details in the Guardian.  A4e has pulled out early from a £17m contract to provide prison education (OLASS) in 12 London prisons.  The contract had almost two more years to run, so we can assume that pulling out has cost the company dear.  But it claims that it couldn't run the contract at a profit.  Without any more details from the company, there is speculation that the reason is that overcrowding and under-staffing in prisons is resulting in prisoners being unable to attend classes, and this impacts on the private companies which are paid according to the number of classes they run.  To add to A4e's embarrassment, the contract was initially delayed by the extended audit of its activities which followed fraud allegations.  And, as the Guardian points out and as we reported at the time, it's not the first time A4e has done this.  In 2008 it pulled out of 8 OLASS contracts in Kent prisons because it was making huge losses.  It had then severely underestimated the costs of providing a pension scheme for the professional teachers it took over from the previous providers.  Presumably it factored all that in to the London bid.
Maybe it's an indication that A4e now can't withstand the losses it might once have absorbed.  It adds to the sense that this is a company in trouble.

The latest fantasy from Iain Duncan Smith

Wearily we have to notice the speech IDS was due to make today, which was trailed so exhaustively that there's no need to read it.  Yesterday's Telegraph naturally had the most sympathetic coverage.  Apparently the government is "matching economic recovery with social recovery", but "the economy will never fully recover unless families on benefits return to work".  That's the big problem for Smith.  His big plans have failed to get well over 2 million people back into work (or into work for the first time) and he takes it personally.  How dare they remain unemployed?  He has stated that "the way our benefits system is constructed" is responsible for the number of immigrants, coming to take the jobs British people refuse to take.  The Guardian gives more detail on the figures IDS will cite and they quote him: 
"When we took office, there were nearly five million people on out-of-work benefits. It was clear to me that in large part this situation was the product of a dysfunctional welfare system that often trapped those it was supposed to help in cycles of worklessness and dependency.  My one aim as work and pensions secretary has been to change this culture – and everything we have done, every programme we have introduced, has been about supporting everyone who is able to into work.  The scale of the change has been enormous – but we are delivering, and it is changing our country for the better."
If that makes you want to scream and throw things, I'm sorry.  That's the make-believe world that IDS lives in.  All those lives he's ruined; the trail of misery and destitution he's left; the lies about sanctions - they are nothing to him.  He was asked by a BBC reporter recently if he worried about cases of people suffering.  He said they made him "sad" and he wanted to understand them.  It was actually revealing.  These cases, these people, are not real to him.  They are shadows he can dismiss.
Policy Exchange, the Tory "think tank", has come up with some ways of slashing the income of the poorest even further.  One idea is to reduce the benefit cap, currently £26,000 pa, still further outside the south-east corner of the country.  IDS said, "We're not working on that," which doesn't rule it out for the future.  It's an acknowledgement that the biggest driver of high household benefits is rent; but it ignores the fact that there are people needing benefits in some high-cost areas outside London.  PE also wants to limit child benefits to 4 children.  That might get a sympathetic hearing; but it would significantly increase child poverty.
This is the message which the Tories will take into the election.  The out-of-work are wilfully unemployed and they are the cause of all society's ills.  But by making them suffer ever greater deprivation the Tories will persuade them to get a job.
I read an interesting piece recently (I've lost the link) which said that the only conclusion to be drawn from the puzzling employment statistics was that lots of people were working without paying tax.  They must be in very casual work or notional self-employment, or the deliberate black economy.  Yes.

Selling off A4e?

News today that A4e has sold its business in India to a local company, Skills Academy.  A4e was providing skills training and "placements" mainly in rural areas.  I don't know when A4e's own website was last updated, but they say that have been working in India for over 3 years and talk in the future tense about the contract they will be delivering, having signed it in January 2012.
What's the significance of this?  There was a time, not so long ago, when A4e boasted of operating in eleven countries.  Now, the only overseas business is in Australia.  Are they shrinking sensibly, having spread the business too thinly?  Or is this a sign of continuing financial problems?

The brutality of sanctions

You will probably have read about the tragic case of David Clapson (at least, if you read the Daily Mirror or get your news from the internet).  The story first emerged on the same day that Matthew Oakley published his report into the way that sanctions were working.  Clapson's death was first reported in his local paper, but then was taken up by the Mirror with an uncompromising headline: "Killed by benefits cuts: Starving soldier died 'as result of Iain Duncan Smith's welfare reform'."  What made this case so difficult to brush aside was that Clapson couldn't be labelled as a scrounger, even by the most bigoted of right-wingers.  He was a former soldier who had given up work to care for his sick mother and, since her death, was looking for work.  He was sanctioned for missing an appointment.  He was a diabetic, dependent on insulin (which he couldn't take when his electricity was cut off and he couldn't keep it cool).  He died of the consequences of not having the insulin; but there was also no food in his stomach.
The Mirror returned to the story yesterday when David's sister launched a petition for an enquiry into sanctions.  A campaigner for just such a petition is Debbie Abrahams MP, a member of the Work & Pensions select committee.  She thought that Esther McVey had agreed to it at one of the committee's meetings; but I watched that meeting, and felt that McVey had dodged it.  And why would McVey, let alone IDS, agree to such an enquiry?  McVey has lied to the House of Commons (supposedly a serious offence) by stating that sanctions are "only used as a last resort".  Even Matthew Oakley pointed out that that is not true.  And why would they want to investigate the fact that, as the Mirror says, almost a million people apparently deserved punishment by destitution last year?
They know that not enough voters care to make a difference.  Even with the Clapson case there were plenty of people saying that he must have been mentally ill - as if that would make it understandable.  But the ministers also take the view that these are not really people at all.  They inhabit a totally different conceptual universe, one in which the poor are not really human.  And once you've dehumanised someone it is easy to treat him with brutality.
The sanctions regime is brutal.  Every time someone is sanctioned without good reason a crime is being committed.  No, they won't have an enquiry.

The sanctions report

Matthew Oakley's report is out.  You can read it here.  His brief was to look at how the sanctions system was working amongst certain groups; in particular at the communications with, and understanding by, claimants.  It was said from the beginning that the remit was far too narrow, a cosmetic exercise to justify the DWP but ignoring the real issues.  And it was said that Oakley was the wrong person to do it.  If you read the Foreword to the report you do get the impression that Oakley dutifully applauds the system.  But in fact he has gone beyond his brief, and there are some very important points in the document.
The Financial Times wrote a fair piece, highlighting the poor way in which the DWP communicates with claimants who have been sanctioned.  They also got a quote out of Esther McVey: "I have already started to make improvements ..."  Far be it from me to call anyone a liar, but I doubt that this is true.  The Guardian went with the fact that "Benefit sanctions hit most vulnerable people the hardest", sending out unintelligible letters, and not telling people about the availability of hardship payments unless they asked.  There's also a very significant observation from the report: "It also revealed serious flaws in how sanctions were imposed, with Work Programme providers required to send participants for sanctions when they knew they had done nothing wrong, leaving 'claimants … sent from pillar to post'".  This is the first time I've seen this fact in print.  The Guardian produced an update on this article this evening to take account of the fact that the government is to "overhaul the way it treats benefit recipients threatened by sanctions".  This must be based on the DWP's press release, which doesn't use the word overhaul and promises very little.  It does provide a quote from McVey which is probably made up by the DWP Press Office.  (You can play meaningless platitude bingo with it.)  The BBC website has a very careful piece which isn't worth reading.  And from Iain Duncan Smith, not a peep.  
This report is, of course, far from sufficient.  As the TUC has said, there must be a much wider review into the sanctions regime.  Perhaps it should look at this case reported today in a Hertfordshire local paper.  It's as bad as it gets.

Changes at A4e

We knew that various directors of A4e had come and gone, having done their stints on the board.  However, separately from that, Mark Lovell has gone.  His job was terminated at the end of May (yes, I know it's July now, but I've only just picked it up.)  He had been with A4e since the start in 1991, and there were those who said that he was the brains behind the business rather than Emma Harrison.  Lovell kept a low profile, in contrast to Ms Harrison, and I only remember seeing him on TV once.  He was Executive Chairman of A4e for over 22 years, but in September last year he stepped down and became a non exec director.  He's now become the principal of something called The Social Assistance Partnership.   So all the old guard has gone.

There could be some new business for A4e if the Conservatives win in 2015.  The "think tank" Policy Exchange, which is actually a Tory brand, wants to privatise jobcentres.  There's a useful article in the Belfast Telegraph, and another on the Huffington Post site.  The service would be split and the "employment services arm" privatised while the rest would be renamed Citizen Support.  It's inevitable that any service still in the public sector will be outsourced sharpish if the Tories get in.

Carrying on

On the day of the reshuffle the DWP put out its independent report into the way the bedroom tax is working.  It's a process known as burying bad news.  But it was noticed, particularly by the Liberal Democrats, who decided that it was just too bad to defend any longer.  And it's that, unfortunately, which has been the news story, rather than the contents of the report itself.  Let's skip the politics and look at the facts.
You can read it all here - "Evaluation of Removal of Spare Room Subsidy".  There's a lot of it, so you might like to copy most of the media and just look at the Key Findings from page 15.  Crucial is the fact that only 4.5% of affected claimants have moved "within the social sector" in the first 6 months of the reduction, with another 1.4% moving to the private rented sector.  There's nowhere to move to.  Most people said that they had done more to find work or better-paid work (well, they would, wouldn't they?) but hardly anybody had taken in a lodger.  41% of tenants have paid the full shortfall, 39% have paid some, and 20% have paid none.  Where have people got the money to pay the extra?  57% say they have had to cut back on essentials (like food) and 26% had had to borrow money.
And on it goes.  The RSRS (as the report calls it) is a massive failure, as everyone except IDS and Freud predicted, and all it has achieved is to plunge poor people into greater penury.  The BBC got a quote from Iain Duncan Smith: "This department is delivering some of the biggest welfare reforms in over 60 years, designed to return fairness to the system and we are on track to make the £6bn savings we had previously set out.  At the same time we are helping to make sure our housing benefit reforms have a transformative effect on the lives of those who in the past were faced with a system which trapped people into cycles of workless and welfare dependency.  The scaremongering by those opposed to our welfare reforms - in particular our housing benefit reforms - has been proven to be without substance, and we are already seeing the effects of people moving into work."  The risible DWP Press Office chaps tweeted desperately in similar vein.  But the Lib Dems decided that they couldn't defend it.

There was some barely-noticed news on the outsourcing front.   The contract for electronic tagging of offenders, previously held by G4S and Serco (both of which were found to have defrauded the taxpayer of millions) has gone to - wait for it - Capita!  Some asked why Capita; why does it always have to be these three?  But it's an inevitable part of the outsourcing business.  If you create huge contracts only the big firms can bid, and it was these three which were prepared to bid for everything.  
One lot of contracts of interest to many is Community Work Placements.  But CWP doesn't seem to be going well.  The Boycott Workfare team is doing a great job of publicising companies and organisations which agree to take part by taking free labour.  One was recently claimed by the government as a success, providing a photo-op for Osborne.  It quickly decided to withdraw when it discovered the trouble it was attracting.  It looks like the CWP contractors are targeting councils and housing associations for placements, if Seetec is anything to go by.  They say, "Examples of such projects include estate maintenance and local renovation, groundswork, horticulture, recycling as well as administration, customer service and sales, warehousing, distribution and cleaning services. The list of potential projects is almost endless."  Sadly, it will be tempting for cash-strapped councils to go for this.  Presumably they can adapt the hi-viz jackets they use for Community Payback offenders on similar projects.

He stays

Yes, Iain Duncan Smith keeps his job.  The BBC seems not to have noticed this.

So why is he still there?  Political Scrapbook has two theories: one is that they didn't want to justify the supposed leak of his demotion by a Spad on a train; and the other is that anyone else taking on the job would have to admit to the grave problems with UC, so best leave it alone.  I have another theory - that he stays put because he's doing what Cameron wants him to do.  Michael Gove went to great rejoicing in every school staffroom in the country; teachers vote, and some might vote Tory.  IDS would have gone to exultation among the poorest - who never vote Tory.
Esther McVey keeps her job too (and a seat in the cabinet, which is meaningless) but Mike Penning has gone.  He had shown far too much compassion for the disabled and contrition for the Atos mess.  So there now isn't a minister for disabilities, but Mark Harper comes in as Minister of State at the DWP - not sure what that means.  Harper is a youngish right-winger.  That seem to be the main theme of this reshuffle.  All the moderates have gone (I don't count Gove in that) and a firm right-wing stance is set for the rest of this government.

There are things to say about the bedroom tax report and about Capita, but we'll leave that till tomorrow.

Why Iain Duncan Smith should go

Someone yesterday started a story of a conversation supposedly overheard on a train to the effect that in the forthcoming reshuffle "Ian" was to be replaced by "Esther".  Despite there being no substance to this story at all it's made it as far as the BBC website.  One thing that this demonstrates is that Iain Duncan Smith's future is the biggest talking point in the reshuffle.  Will Cameron move him?  Will he have the guts to fire him if he refuses to be moved?  Who would replace him?

I have blogged before about IDS's failures, as have a great many people.  There's an excellent piece on the Labour Left website which lists "Iain Duncan Smith's 100 biggest failures".  It's a heroic effort, well worth study.  But let's distil it into the most obvious areas where his ambition has far exceeded his competence.

• The Work Programme.  This was the first of IDS's grand schemes to be put in place.  It was going to solve unemployment; and the most revolutionary aspect of it was "payment by results".  But it was never that.  The providers were guaranteed an "attachment fee" which would keep them going if they did nothing; and they were able to look forward to an "incentive" payment even if they failed badly.  And fail badly they did.  After 4 years it's clear that job outcomes (below even the minimum performance demanded and way below the providers' promises) depend on the economy and not on anything the companies do.  Helping to drag down the WP is:-
• ESA.  The companies were never going to be able to help those on ESA into work.  Indeed, most have been parked.  And overall, the companies have spent less than half the amount per client which they promised.  Remember, they get contracts because of the promises made in the bid documents.  And now they've got contracts to scoop up the people they've failed into:-
• Community Work Placements.  Okay, these appear not to have actually started yet.  But that's because a huge chunk of the voluntary sector want nothing to do with them, and a growing number of councils have also refused to take part.

There were a number of other, almost incidental, schemes along the way which have also been disasters, notably

• The bedroom tax.  (Let's face it, no one was ever going to call it "the removal of the spare room subsidy".)  It has cost councils a fortune, saved no one any money and inflicted huge distress and misery on thousands.
• Universal Jobmatch.  This was, it seems, entirely IDS's baby.  A grand one-stop-shop for employers and jobseekers alike which would have the added advantage of monitoring the activities of claimants.  The contract was given to a company with a poor record but which claims that much of what went wrong with UJM could have been prevented - but they were told not to put the necessary refinements into the software.  The system has been used to control and punish claimants without ever being the wondrous solution IDS envisaged.  But its costs are enormous.
• The sanctions regime.  A ludicrously impractical "claimant commitment" has been coupled with a vicious imposition of punishments which breach people's human rights.  Yet time and again IDS and his ministers have simply lied about sanctions; McVey repeated again this week in Parliament that they are "a last resort".  The human cost is appalling.  

The biggest failure of all, however, is:-

• Universal Credit.  This was to be the lasting legacy of Iain Duncan Smith, transforming "welfare".  At the outset opposition parties said yes, great idea, but it's never been done because it's too difficult.  Not for IDS, though.  Millions have been spent on IT that didn't work, more millions on trying a different IT system, and on patching up the problems thrown up by the very limited trials of UC.  We needn't rehearse all the problems.  But through them all IDS has insisted that it will all be fine.

We're told that it's Osborne who is keen to get IDS out because the Chancellor wants to slash the welfare budget and IDS resists that.  We're also told (in the Mail today) that Smith will again refuse to go.  This man's failures have cost us dear.  Surely he must go.

The boom in outsourcing

£88 billion has been spent on outsourcing in the UK since 2010.  That's nearly double what was spent in the last four years of the previous government, and the public sector is outsourcing at twice the rate of the private sector.  The big winners have been Capita and the usual suspects, but little of this boom seems to have touched A4e.
The project has enable the government to claim spurious private-sector job creation, as workers are switched from one to the other, with fewer jobs remaining at the end of it.  It also enables Cameron to claim that he is fulfilling his pledge to "release the grip of state control", though this begs the question of exactly who is in control.  Time and again we see how poor the procurement process is; how promises made on tender documents are pure fiction, but there is no come-back for the taxpayer.  There's an excellent analysis of the Work Programme figures in the New Statesman.  The providers are spending nothing like the amount per client that they promised, yet still they get their incentive bonus.
There is evidence that some services outsourced by local authorities are being brought back in house, and we've seen that happen in the past.  But there comes a point where there's no "in house" left; no council or government structure to administer the service.  It was a creeping privatisation under Labour.  It's galloping under this government, with little notice being taken by commentators of where we're going.
For a little light relief, we're told that a cabinet reshuffle is on the cards for next Monday.  It's suggested in the Telegraph that there are rumours of a straight job swap between Iain Duncan Smith and the Defence Secretary Philip Hammond.  The mind boggles.
 

Work Programme puzzle

It started with a statement from the redoubtable Margaret Hodge MP, chair of the Public Accounts Committee.  She is angry at the failure of the Work Programme to help the people it was supposed to help, especially those on ESA.  There has been no improvement, she said, since the PAC examined it in 2012, and providers are spending only 46% of what they were meant to spend supporting each client.  Then comes the puzzling bit: "It beggars belief that the Department expects to pay at least £31 million in bonuses to all of its contractors despite their poor performance - even the Newcastle College Group whose contract has been terminated will receive a bonus."
I confess to never having heard of these bonus payments.  There was little enlightenment from an article by Rajeev Syal in the Guardian.  He adds some more figures, but gives the bonus as £25m (and then £31m), while calling it "incentive payments", and saying that the National Audit Office "has discovered that flaws in the work programme contracts meant that the [DWP] is obliged to make incentive payments to even the worst performing providers."  The figure isn't dependent on results.
Still confused, I looked at a piece from Sky News.  It's clearer.  And there's an interesting paragraph: "Figures for the most recent group to have gone through the scheme showed just 32% of participants found jobs - still below the DWP's minimum performance level of 33% and well below its original forecast of 39% and the 42% predicted by the contractors themselves."
Newcastle's local Journal tells us that NCG's contract in North East Yorkshire and the Humber had a success rate of 7.4% - but they're going to get a bonus anyway.
Okay, I must have missed the bit about bonuses when these contracts came out.  Perhaps they were negotiated at the same time as the "attachment fees" which meant that the providers would have a steady income and wouldn't be dependent on PbR.  But they are certainly a comfort to A4e and the rest.

Three Wheels on my Wagon

My older readers may remember the song.  It was a big comedy hit in 1962.  It begins:

Three wheels on my wagon
And I'm still rolling along –
The Cherokees are chasing me
Arrows fly
Right on by
But I'm singing a happy song!

The pioneer keeps going as there are two wheels on his wagon, then one - then none.  But he's still singing his happy song.  For the full lyrics see this page; or for the complete musical experience see this video.  (Go on, it's funny.)
I was reminded of the song watching Iain Duncan Smith yesterday.  The Labour MPs had brought the debate on the chaos at the DWP, and they reeled off the list of disasters and accounts of the suffering of real people.  But the few Tory MPs who had bothered to turn up simply chortled, as they always do, and IDS smirked.  His response was so lacking in any acknowledgement of things going wrong, and so devoid of any humanity, that I switched back to the tennis.
The one part of the debate which has been posted online over and over again is the speech by Glenda Jackson.  The video is here.  Note the sneer on IDS's face.  He is utterly contemptuous of a woman who is infinitely his superior.
The wheels have come off Smith's grand project one by one, but he's still rolling along, utterly deluded, singing his happy song about how everything is going to be wonderful.