The accounts for the year ending 31 March 2013 are now available. You can get them for only £1 from the Companies House website.
Things were bad for A4e in 2011/12 but they got a lot worse. They had an operating loss of £10.3m compared to a £1.7m loss the previous year, and an EBITDA loss of £5.8m compared to £4m profit in the previous year. (EBITDA means earnings before interest, taxes, depreciation and amortization - yes, I had to look it up.) They state that they actually moved into profitability in the final quarter of the year. They had to borrow a great deal of money. Liabilities stood at £53.4m, compared to £35.7m in the previous year. They have a large credit facility with Thornbridge Ltd, which is owned 50/50 by Emma Harrison and her husband. No dividend was paid.
They confirm that they closed their businesses in France and Germany, and now the focus is on the Work Programme, OLASS 4 (prison education contracts) and on expanding the business in Australia. They also mention Advice and Enterprise (services to start-ups). There are confident noises about the WP becoming profitable and getting TR contracts (the outsourced probation services).
It must be stressed that this is the information as at March last year. We don't know what's happened since then, or why their credit rating was cut in the last three months or so.
It baffles me how they can still keep going with such a large operating loss- I'm surprised that A4e hasn't gone under yet. As for the probation contracts, I really hope they don't get their hands on those. I have mentioned previously on here that, from what I have seen during jobsearch sessions, their staff are ill-equipped to provide the support which ex-offenders need to get them into work.
ReplyDeleteThey must have a good business model and assets to borrow against. IF the money paid when customers are first referred on to the WP ends in March it means they have to win those OLAS 4 contracts.
DeleteThey already have the OLASS 4 contracts.
DeleteAs a former risk manager,the Banks will take past turnover and future contracts into account,but the chances are that the current lenders will be deep enough into A4E that they will extend them credit at increased interest rates and be preferred creditors,I would also expect that some personal guarantees backed by their own assets would have to be pledged,with an agreement that all future contracts won will be lodged with the Bank.
ReplyDeleteWell they no longer have had their central London offices for a while .....
ReplyDeleteWould be interesting to see how the other main welfare dependant providers are peforming financially. That should show if rumour that Work Programme is a posion challace financially are true.
ReplyDeleteIngeus filed their report late last year. It details their activites up to December 2012. They made a loss of 2,639,000 after tax. It seems they are expanding but it's yet to result in profit. Income was up but so were expenses. They borrowed 17.5 million during the year and no dividends were paid. None of the directors – except one – received a wage from the company though – or as they term them 'emoluments'. I think they're the same thing.
ReplyDeleteEarlier this week, apparently, Private Eye said that A4E are allegedly on track to secure 18 of the new contracts for the provision of Workfare. Private Eye did not seem to know what those might be worth but I am not surprised to hear that the Tories have decided to outsource the idea of compulsory Workfare.
ReplyDeletePrivate Eye reported that they were amongst the runners to win some contracts, along with the other usual suspects (Atos being mentioned, presumably because of their profile rather than any specific intelligence). They didn't say that they were on track to secure all 18 of them, which seems exceptionally unlikely. Big difference.
DeleteThe total cost of 'Help to Work' is budgeted at around £300m, the majority of which is allocated to Community Work Placements; the maximum amount per person is (from memory) around £2000. However, payment is on a milestone basis, as historian has mentioned in a previous post. Given that few people will get jobs, you can knock off 30% of the potential payment right at the start for around 80% of participants. My own hunch is that relatively few people will reach the long outcome fee point (22-26 weeks and 30% of total payment), not everybody will reach the short outcome payment point (12-21 weeks and 20%) and a significant number may not actually find a placement at all (20% of the value - i.e. the remainder).
On that basis, the allocated £2000 starts to look rather less - and some of that will have to go to whoever provides the placement (in theory - there's a clear risk of job displacement in which case no payment may be sought) and on providing staff and facilities for 10 hours a week of supported job search.
In other words, it's another cheap and not so cheerful DWP scheme, and one that may not turn out to be a great money spinner for providers. In evaluations of the pathfinder has been shown to be only marginally effective. In fact, the more effective element (more intensive support at JCP) is the one that's least resourced, even though claimants are expected to be allocated 1/3-1/3-1/3 to each of the three interventions, even though there's no clear rationale for that split.
We should acknowledge though that the point of this isn't really to help people into work. It was announced by Osborne rather than IDS, and is primarily about sending out a political message about how scroungers and the workshy will be punished and humiliated.
£300 Million? Is that not just about the amount of the under spend on the WP? I have finished the WP and still have not gotten as answer as to what the huge amounts of money was spent on. It was not on training, qualifications or even work placements,as for tailored support? It was non existent.Why does anybody think this will change? After talking to a few employers about work placements,they all said that it sounded reasonable,until I mentioned who would administer it and I quote "Not those F£ckin Jokers again" apparently the employers were constantly harassed,before,during and after accepting clients,I have a feeling that A4E and others will be pimping us out Chain Gang style to public bodies in order to claim it is community based.
DeleteThere's a more detailed view of the accounts here: http://www.insidermedia.com/insider/yorkshire/106932-
ReplyDeleteI read that report with interest. A4e claims that its losses have a lot to do with its increased investment in the Work Programme but, from what I have observed recently at my local A4e, they seem to be cutting back. In the past month or so I have seen a board on display which states that there is no funding for several courses until at least April 2014- this includes the CSCS course, which a significant number of people on the Programme have indicated they feel would be useful in helping them to get a job. So, I wonder where this increase in funding is supposed to have taken place?
DeleteI asked for help to get a CSCS card on my very first day of my two years with A4e on the work programme. I was told they didn't have the funding for it! Being seen for five minutes every month just to book my next appointment was all I got from A4e. A complete waste of time.
DeleteCommon complaint, and disingenuous on their part. There's (broadly speaking) no funding as such for training or even things like CSCS cards (and the interaction with SFA provision etc is complex) but the idea was always that providers would spend their money (speculatively, if you want) on things like that to help people get work.
DeleteIn reality, and as the financial results above suggest, they've been living hand to mouth from the start, and the money just hasn't been there. Talking to provider staff at all levels, I get the feeling that few of them signed up to the idea of spending money to earn more later with much sincerity, and from conversations with CPA manager level staff, I don't think that many actually understand the concept that well. CPA manager level staff and below have also mostly shown an inability to make the differential payment model work to their advantage, but that's drifting off topic.
Slight caveat in that the lower than hoped for performance (particularly for the higher paying customer groups) has had negative implications for revenue, and the PbR model and associated risk meant that loans to cover running costs were more expensive than anticipated, so the aversion to risk and spending may be driven by necessity - although thinking back to early conversations, I'm sceptical.
Interesting thing, when I was at A4E, they did have money for CSCS cards or at least the test for them, (I only ended in December) and they paid for me to get a copy of my birth certificate as well. Although they wouldn't help pay for getting copies of my A-level certifications as they were too expensive.
DeleteThe only thing they didn't do was much in the way of actually doing anything relevant. They seemed at a loss of what to do when they had people who knew how to use a computer... (and incidentally at a loss when it came to technophobes or people who were terrible at using them),
I spent more of my time there teaching other people how to use the computers, and how to use that stupid new universal jobmatch site. (Which is used as a bludgeon by the jobcentre now)
All I ever did at A4E was come in for an hour weekly to jobsearch and see the advisor once per month. I could've honestly stayed at home as I did jobsearch there too with a better computer system + faster internet.
They honestly don't do much else, despite saying they act as an agent for the jobseeker. I never actually had them trying to sell me to companies. I guess though it's easier to get people into retail than it is to bother with a trained administrator.
It's terrible that A4e would not pay for you to get copies of your A level certificates, as not being able to show an employer proof of qualifications can be a real barrier to work. How can A4e claim that they're helping to get people back into work when they won't even sort out something that is an obvious barrier?!
DeleteRegarding your comments about your time spent with A4e, your experience very much echoes mine. There is no way that A4e is a training company, and it shouldn't be able to claim this title.
I agree,the attitude seems to be that we expect something for nothing,but if they do not provide a service that will enable people to enter the work force,what is their purpose.
DeleteI am a bit befuddled by the system,IDS has been reported saying "If a claimant needs a drivers license to gain employment,we will pay for it" Has this creature ever been to the WP or JCP if so it must be the Fantasy Land Branch! I have had my JSA suspended,no letter,just we sent you a form to fill out and you have not..Where did you send it? I am of NFA, Luckily after following this blog and a few other that are linked I was prepared,although I never thought it could happen to me as I have never even been late or missed an appointment and jumped through hoops(survival food) the ironic outcome is I manipulated the system,as I have no benefit and as a long term unemployed I do not qualify for a crisis loan,I was referred to the Council,Where I was staying for free charged me £8 pw utilities,I bought my own food(good deal) nice place,as the DWP/JCP have made me homeless(Sanction) the council have now put me up in a Hotel,£37 per nite,where is the sense? The DWP could not give the Council a date when the sanction will be lifted as it is being reviewed and awaits a decision maker,but promised that it will be in 10 working days or less. Cost? at least £370 plus I will more than not have it over turned...Idiots!
ReplyDeleteI was sanctioned on Wednesday for not applying for enough jobs on Universal Jobmatch- in fact, I had applied for zero jobs via Universal Jobmatch.
ReplyDeleteThe only problem with this is that it is now impossible to find any jobs where you can apply directly through UJ anymore- you are always referred to third-party recruitment sites [a very high % of the time it's Monster, which is hilarious and ironic].
So whilst I had used that awful system to apply for at least 20 jobs, because all of them linked me to a third party recruitment site, as far as UJ and therefore the JobCentre is concerned, I haven't been using Universal Jobmatch and a doubt has therefore been raised.
I spent about half an hour trying to explain this to my advisor, but it was clear from her blank expression and the way she positively salivated at the thought of raising a sanction doubt that logic wasn't going to win that argument!
If I didn't laugh I'd cry!
Clearly the "adviser's" lust for raising sanction doubts far exceeds her ability to understand the limitations her intellect.
DeleteDo not take this lying down! Make sure you ask for a reconsideration and, if necessary, appeal.
You have right on your side and are more than capable of winning your case.
If enough of us do this then slowly they will begin to realise that the sanction or bust policy is futile.