Looking back

It's useful to remind ourselves sometimes of the wilder shores of A4e's ambitions.

There was the bank.  One wonders now how it ever got as far as it did, but A4e wanted to set up a bank for poor people.  They had an arrangement with a South African bank, Capitec, the exact nature of which we'll never now know, but it lead to the setting up by A4e of a company called Capitec UK.  A grant of £1 million was given by a Regional Development Agency to start this bank.  Then something happened.  Again, we'll probably never know what, but the whole project was dropped without the money being handed over. Capitec UK never traded and was dissolved early last year.  There's no chance now of A4e ever being allowed to run a bank, but who could ever have thought that it was a good idea?

And then there's "total place".  A4e had scooped up contracts for various outsourced public services, and had a vision of one grand contract covering a whole local authority area.  A single company would provide all the services, from welfare-to-work, to legal and financial advice, to pupil referral units to - you name it.  They put forward a version of this to government in 2010 when Local Enterprise Partnerships were invented.  (See this blog 25 September 2010.)  This idea seemed a whole lot more likely than the bank; but what has happened in practice is the grand contract which doesn't help A4e.  Some local authorities (Conservative controlled, naturally) have decided to outsource everything, handing over all their services to one company which then sub-contracts them out piecemeal.  The only companies in the running for such super-contracts are, as you would expect, the likes of Serco, Capita and IBM, with other big American companies wanting a piece of the action too.  A4e isn't big enough.  Which is a relief.

The setbacks of this year will not have dampened A4e's ambitions.  Why should they?  G4S made a complete mess of its Olympics contract, but it's caused barely a dent in their business.  There are frequent failures in outsourcing, but no slowing of its growth.  And that's because it has little or nothing to do with cost or efficiency.  It's down to what Private Eye calls the revolving door; the happy club of politicians, business people and civil servants who switch roles and create opportunities for money-making for each other.  It's a wealth creation scheme for the elite.

That A4e bank

As Mark Lovell pushes for a financial and banking role for A4e, we should remember that their plans for a bank have a long history. I've described before how the plans came to nothing, but I've only just come across this lengthy piece in the Telegraph from September 2006. It describes, entirely uncritically, how A4e was "in talks with a major South African banking provider for the new service, which should have as many as 150 branches. Plans were submitted to the Financial Services Authority in London some months ago." (We know that this South African bank was Capitec, and that A4e actually set up Capitec UK.) "A4e said the venture was likely to cost between £50m and £100m in the first instance." £1m of public money was subsequently allocated for this venture by a section of the North West Regional Development Agency.

The writer of this piece, Christopher Hope, raises no doubts. He doesn't ask whether it's appropriate for this company to enter retail banking, targeting the very people it gets money from the government to help. But 2006 was the point at which insanity in the banking system was poised to crash and ruin us all. It doesn't seem very likely now that we'll see A4e Bank (or Capitec UK) branches on the High Street. But the ambition hasn't gone away. And when Lovell's latest thoughts on the subject are published in the Telegraph, will anyone go back 5 years and look at the history? I doubt it.

More on banking

We reported in October 2009 that A4e had set up a company called Capitec UK Ltd under an unclear relationship with the South African bank, Capitec, and had been given a £1m grant from Yorkshire Forward's Regional Industrial Development Board to get a bank up and running. That seemed to fall through. But A4e haven't given up. Mark Lovell has had a lot to say about ways of getting involved in "financial services and banking for the poor", citing schemes in the UK and abroad. In a blog post on 17 November he mentions his admiration for Capitec, but saysa nothing about Capitec UK. Five days earlier another post set out what he percieves as the shortcomings of the Post Office Bank and insists, "There is a need for a radical new banking service for people stuck below and outside mainstream financial services. The Post Office network may be invigorated through these proposals but the financial proposition is a long way from supporting the most financially vulnerable and marginalised. I still intend to do something about it." And in that post he refers to a document called "Total Person" which explains A4e's ambition to have a single "broker" for all the interventions and services which a client needs. It's a well-developed programme; and given Emma Harrison's apparent success with the coalition government it could see a further spread, especially given the intention, by A4e at least, that the Work Programme will give them the right to deal with "whole families". That is chilling enough in itself, but coupled with a banking service for these clients it would be nightmarish.

People with little money and no prospects need all the help they can get from agencies designed as public services and accountable to the public. They should not be forced to access these services through a private, for-profit company.

India, Cambridge and the bank

News from India: "In a pilot project, A4e (the first international company to work on this project) will work alongside the Ministry of Rural Development to provide sectorally tailored employment-oriented vocational skills training, certification and job placements to 9,000 people below the poverty line (BPL) between the age group of 16-35 years in Punjab, Maharashtra, Rajasthan,Bihar, Jharkhand and Orissa." (http://ukinindia.fco.gov.uk/resources/en/pdf/general/EducationBrochure110110)

Back at home, a group calling themselves the UWU, "a newly formed group whose mission is to represent and defend the rights of those who are currently out of work, as well as fighting the Welfare Reform Act" were picketing A4e's Cambridge offices last week.

And the bank. You may remember that last year A4e set up a company called Capitec UK Ltd to be a bank for poor people. See here. (The relationship with the South African bank, Capitec, is unclear.) Presumably that £1m grant was never handed over, because the company remains dormant; and, incidentally, the body which made the award has since been disbanded.

How is FND going?

There's an interesting blog (see Interesting Sites on the right) following an ex-offender's experience on Flexible New Deal. He's going into detail about his introduction to the programme, and comes to it with experience of the old New Deal. And he's aware that as an ex-offender he faces more obstacles to employment than most. Such clients are not attractive to FND providers (and will be even less so under the Tory proposals) when so much of the payment comes from getting and keeping a job. One new job title the blogger has come across is "Career Coach", the new name for what A4e used to call advisers.

Meanwhile, the stories about the government preparing to sell off parts of the nationalised banks to create three new banks, to be sold to firms that don't at the moment do banking, raises some intriguing possibilities. Is this what A4e, with its Capitec Uk Ltd bank lying dormant, has been waiting for?

Just for laughs, there's a story in today's Sun about an A4e employee in Northumberland.

The A4e Bank

A4e's aspirations to run a bank for poor people have been mentioned before. But it's a reality!

Back in January this year Mark Lovell described it on his blog as seeing "the potential for A4e to develop a relevant offer". A4e's bank is called Capitec Uk Ltd, and derives its name from a South African bank, Capitec. Lovell says that Capitec "helped us shape our thoughts and ideas on banking for people in poverty" but it is not clear whether there are closer links.

By the time that Lovell was writing about this, A4e's bank had already secured a grant of £1m from the Regional Industrial Development Board in Yorkshire, as we see from the minutes of Yorkshire Forward's board.

Yet the company is now dormant. What happened?