Merry Christmas

There's little going on at this time of year. A4e continues to put out good news stories; and each success that they trumpet is a real cause for celebration for the person concerned. But how the Work Programme is really working is still a secret. An MP asked how many of the over-50s had found jobs through it and was told by Chris Grayling that no figures would be issued until next spring.

Back in September we reported (thanks to Private Eye) that A4e had a £300k contract from the government to design future welfare contracts. The company has now publicised this on their "Insight" website. It's not a new experience for A4e, to be paid to design contracts which they can then successfully bid for. A4e designed the pilot programme for the FSA's money guidance service. Lo and behold, earlier this year they got the contract for the Money Advice Service. Let's be clear, A4e isn't the only private company on this profitable merry-go-round.

So now, to all my readers, have a peaceful Christmas.

A £300k contract

We mentioned an A4e company, "A4e Insight", first in November 2009. This "research and consultancy arm" of A4e had provided consultancy on two projects, money guidance and "train to gain", in which it had a large financial interest. In February 2010 we wrote about another Insight consultancy project in which it had provided "due diligence" research on a competitor training and skills company. This curious task of selling consultancy on things in which you have, or may soon have, a vested interest continued when, in February this year, A4e was named as a mentor to start-up public sector mutuals. Now we have a report of another contract for A4e Insight. It's getting £300,000 from the Office for Civil Society to investigate the effectiveness of social impact bonds in four pilot areas. (See the Third Sector website)

This is Big Society stuff, the OCS first describing the project in August this year. We were told then that "The OCS is not funding the projects, but has made up to £300,000 available to offer technical support to the councils in order to design the new tender documents." Is this the same £300k going to A4e? Mark Lovell has written enthusiastically about SIBs. Does this compromise the objectivity of the research?

Insight, prisons, quangos and unemployment

LDC is a private equity company and it is part of the Lloyds Banking Group (much of which you and I own). It wanted to support a management buy-out of JHP, a training and skills company which has been in existence for 25 years and is a competitor of A4e. So who better for LDC to bring in to do the due diligence than A4e? Its Insight consultancy arm "was able to draw on in-depth understanding of both the employability and skills markets, and used its knowledge and experience to provide detailed insight into the likely prospects for JHP". Yes, of course. And A4e "were also able to provide a unique insight into JHP’s positioning as an integrated provider of both employability and skills, an area of increasing importance to policy makers in all parties."

LDC went on to invest in JHP, so they were happy with what they learned. Now, I'm probably naive about such things, but isn't this a bit like asking Tesco to tell you whether it's worth investing in Sainsbury's?

The latest edition of that excellent publication Private Eye has two items which touch, albeit indirectly, on A4e. The first concerns prison education. A4e had a number of contracts including 8 in Kent; but it pulled out of those early because it was losing money hand over fist. They were taken over by Manchester College, which is now the largest provider with contracts in 96 institutions. Now they too are losing money and having to sack teaching staff. "Not all colleges failed to foresee the hidden costs," says the Eye, pointing out that two London colleges withdrew from a tendering process because there wasn't enough money in the contracts. But this is surely a case of the inability to undo a botched privatisation.

The second item concerns the PADA (Personal Accounts Delivery Authority). We reported that this quango has the job of enrolling millions of low-paid employees in a pension scheme based on stock market investment. One of its first actions was to dish out a large contract to 35 firms, including A4e, to do market research. PADA has become what the Eye calls an "old mates' club", staffed by people with surprising CVs who just happen to know each other. It's worth reading the article; it's entitled "Nest of Vipers". Let's hope that if David Cameron becomes PM he keeps his promise to do away with all these quangos.

And finally -- the unemployment figures which came out in recent days included the fact that "long-term unemployment, covering those out of work for more than a year, increased by 37,000 in the quarter to December to 663,000, also the highest figure since 1997." (Channel 4 news). So what is the point of New Deal?

Insight

It has always been A4e's strength that it continually diversifies into new business opportunities. As welfare-to-work becomes a more crowded and less attractive business in the UK, A4e has spread into other areas such as education; and it's doing that in Germany as well. A German news report describes its certification as a vocational trainer.

Another new project is A4e Insight, slogan "Worldwide Business Experience you can Trust". "A4e Insight is the Research and Consultancy arm of A4e, a market leader in global public service reform and in the design, development and delivery of front-line public services that benefit individuals, organisations and communities" says its website. The four case studies it cites provide something of a puzzle. Two of them are in areas of business where A4e has a large stake. Money guidance is a new but profitable field for the company, and here it's presented as testing a pilot scheme for the Financial Services Authority. We also have A4e's contracts in "Invest in Skills" and "Train to Gain" described as work on behalf of the Learning and Skills Council of Yorkshire and Humberside. But the other two case studies seem to be departures for A4e. It did some market research for a Global provider of CAD/CAM software; and it provided help with the bidding process for "the country’s leading provider of civil enforcement services" which "has significant contracts with both central and local government." (If you're wondering what "civil enforcement" means, its the bailiffs.) So it seems that A4e's undoubted expertise in writing winning bids for government contracts can be sold to other companies.