Friday, 16 May 2014

Another buy-out in "Welfare to Work" industry

It's only a few weeks since Ingeus was bought by the American company Providence.  Now another w2w provider has been bought out, this time by a British company.  Staffline has bought Avanta for £45m.  It says that Avanta generates £70m, and all of this is in the w2w sector.  The Financial Times says that the providers are "braced for a wave of consolidation as they seek to bolster their position ahead of the next round of contracts in 2016".
So is A4e going to be next?  They were hopeful of going into profit a year ago, and if both Ingeus and Avanta are worth buying because they're making money, why not A4e?  Is the brand too toxic?  Is Emma Harrison too attached to her company to let it go?
All of this could be a problem for the government.  Staffline reckons that the DWP is happy because "they want fewer bigger providers who are easier to manage".  But, as the FT points out, it could well mean that these companies become "too big to fail".


  1. Arem't the attachment fees due to end next year? The revenues may be different (in the south east compared to the north east for instance). Having fewer providers seems inevitable as we move towards the end of this phase of the programme.

  2. It is very interesting that 'The FT' is, lets say, wary, of W2W. I predict that when word gets out about the cost of Help To Work the Tories will cop loads of stick (hopefully)!

  3. Off topic perhaps, but something I think the readers of this blog might be interested in.

    I work in the offices of a social housing association. It's a good job that I'm lucky and grateful to have. I was promoted at the start of the year and deal with all of our maintenance contracts. After I left University I spent nearly three years unemployed, enduring all the sanction baiting and rudeness and downright boot-on-throat behaviour JCP has become famous for since Team Blue took the reigns.

    I was actually sanctioned by my Work Programme provider after finding this job and deciding to take a week's holiday before taking up the post. I had cleared my holiday with JCP but the provider had other ideas and requested a sanction. I never bothered to contest it.

    It wouldn't be unfair to say then, that when said W2W provider called our offices yesterday wanting to know if we would be interested in taking Community Work Placements, I was more than a little interested in what they had to say...

    A few gems:

    'What's your gardening and general maintenance budget? We think we can help to increase profitability in these areas.'

    'I can't promise that any of them will be tradesman, but they will all know how to push a wheelbarrow and pick up litter'

    'Any placements will be watched over by our staff, so you don't need to worry about them putting their hand in the biscuit tin' [actual quote].

    They were trying to sell me people- nothing less than that. I stayed on the phone to them as long as I could before telling them that as a socially minded organisation we could never be involved with pseudo-slavery and that they were never to call our offices again.

    1. Sick of the Work Programme17 May 2014 at 02:17

      It's a shame you didn't record the conversation. What a patronising, belittling and disrespectful way to speak about the people who will be forced to do placements which will very likely be of little use in helping them back into employment. I'm sure that they would be horrified if they knew they were being discussed in that way.

    2. I doubt they could improve your gardening profitability. My voluntary placement on the WP was with homeless people doing gardening. Lovely people, but very "lazy". As in they didn't want to be there, so they did the minimum. It rained, they stopped work. Fair enough, they weren't getting paid, they even went as far as saying this to me - why are you still out there weeding, you're not getting paid for it. So as a company you wouldn't have seen any kind of improvement in your profits, unless you had skilled people with spraying and machinary tickets and then minimum C&G qualification. And who'd pay for that? Not you, not the provider and not the government

    3. They would see an increase in profit if they had the opportunity to replace paid workers with 'voluntary' workers.

      For example, I recently applied for a gardening job with a social housing association and was granted an interview. The vacancy was then closed off. At my next signing at the job centre I was offered the same job BUT as a 'voluntary' placement.

      Clear evidence that paid jobs are being replaced by 'volunteers'.

  4. Another off topic subject,I have to attend a 4 Week mandated event,the Provider is A4E out of Newport,when I received the letter on 8 May it was postmarked 5 may at 7:57 PM It stated that I must call 01633460216 on 6 May for induction,I called the number but the phone just states "Call ended" The letter/appointment arrived after the appointment was suppose to of happened,and the number did not work? Am I a little paranoid? I was contacted eventually and got told off(?) We discussed Travel expenses and agreed that £17.00 would be deposited on the 16th of May as I needed to pay for a Weekly Bus pass,at 1557 on the 16th I received a call and was told that due to an Admin error the funds were not sent,but I must still attend or face Sanctions..At this time I requested that we E-Mail each other,the most chilling thing in the E-Mail was this "JSA is specifically meant for Travel Expenses,I was doing you a favour by trying to advance you funds,our policy for Travel Expenses has nothing to do with DWP Guidelines"....Grounds for a Complaint?

    1. May i refer the individual at A4e to the DWP generic guidance notes, Chapter 2, page 31, paragraph 153:
      " Participants attending provision are entitled to a refund of the travel costs
      they incur. It is your responsibility to pay the participant’s travel costs as
      travel expenses are included within the funding received from DWP as
      part of the overall contract package."
      I would also remind this individual of guidance issued recently to the effect:
      "It is DWP policy that claimants are reimbursed travel expenses; reimbursement is not discretionary and is not dependant upon the claimant requesting it. "

      Certainly worth several complaints, one regarding travel expenses "policy" being in breach of published DWP guidelines. Another regarding the timing of the letter sent out - A4e should have allowed sufficient time and take into account the bank holiday and the level of service Royal Mail provides when they use a 2nd class stamp...

      Having taken an A4e "adviser" to task about sending out time sensitive notices with a 2nd class stamp, the response was "We can not be held responsible for the time it takes for a letter to be delivered"..... No, but if you had used a 1st class stamp, it would have arrived the following day.

  5. I read the article regarding the merger and I realize that consolidating businesses cuts down on costs,but when the WP and other associated contracts were "Sold" the ultimate goal was to reduce unemployment,in their own words "It is a growth industry" which has a few disturbing implications,if the WP is such a success as IDS/McVey purport,the W2W should be gearing down rather than up,as unemployment as stated has fallen to 6.8% it flies in the face of logic.


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