Why pick on A4e?

I was drawn into a very peculiar correspondence recently.  I'll spare you the details, but it was with someone who professed himself unable to understand why A4e was the target for special hostility.  It's no different from any of the other companies, he said, so why was there such a virulent internet campaign against it.  I tried, briefly, to explain, but he dismissed what I said and still wouldn't have it.
Perhaps you can help me out here.  I'll set out what I think, and you can agree or not.  Why A4e?

1. When the wave of privatisation in employment-related areas got under way in the mid-2000s there was one big winner - A4e.   It got a huge slice of New Deal, plus Train to Gain and Business Link and more.  It's rivals couldn't understand why.  Even when questions were asked in Parliament, nothing stuck.  There was talk of friends in high places.
2. A4e's reputation among its clients was poor.  Was it any worse than that of other companies?  My impression is that it was.  The 2006-2009 New Deal contracts were very badly designed, fuelling client resentment, but experiences with A4e sparked off more internet outrage than could be chance.
3. The media did try to examine what was going on.  A Radio 5 Live programme was excellent, but nobody took any notice.  Channel 4's Benefit Busters should have rung alarm bells; but the only lasting effect of the two episodes featuring A4e was that a woman who had been a tutor with the company was catapulted to fame and fortune as the Fairy Jobmother, suddenly an international careers expert on such slender experience.  The unemployed began to feel even more insulted.  Other producers, who wanted to make the whistle-blower type of programme, found themselves thwarted by the fact that nothing was provable and the threat of legal action could always scare people off.
4. The face (and voice and everything else) of A4e was its majority shareholder, Emma Harrison.  The cult of personality was unstoppable, and she became a media celebrity.  When it came to demonstrating her expertise in finding jobs for people, however, she was less than impressive.  When the BBC plumbed the depths of the genre with Famous, Rich and Jobless, Harrison walked away from the show leaving at least one unemployed man she had supposedly helped feeling used and abandoned.  Another programme (the title of which I forget because I couldn't bring myself to watch it) saw Harrison competing with someone else to get an apparently hopeless case into a job.  That she achieved this by ringing up one of her mates was another kick in the teeth for those desperate for work.
5. More quietly, A4e was empire-building, getting into all areas of people's lives in some places; CLACs, which took advice services away from the CAB and the voluntary sector in some places; direct payments for social care; prison education; a privatised version of Pupil Referral Units.  They were in schools.  They were in more and more countries, with the aid of the British government.  And they came very close to owning and running a bank, having come to an arrangement with a South African bank and secured a £1m grant from a quango here.  That, happily, came to nothing.  But the sense of boundless ambition was very disquieting.
6. When David Blunkett, who had been the Secretary of State on whose watch A4e had prospered, ceased to be a minister, he took a job with A4e.  Later, when Blunkett had ceased to be such an asset, a Conservative insider joined the payroll.  Of course, A4e is hardly unique in employing those who can oil the political wheels.  But it did seem especially blatant.
7. Targets were never met.  Okay, A4e performed averagely; other contractors were usually just as poor.  But failure to perform adequately was never a reason for not giving them the next contract.  One can blame the procurement process for that.  But it added to the sense that the reality never matched the hype.
8. And hype there certainly was, a constant stream of it.  And it intensified when Flexible New Deal forced providers into competing in each area.  A4e's unfortunately named Know Hope roadshow was a PR campaign to persuade unemployed people that the company was going to change their lives.  (Fortunately for all the providers, the competition element was postponed and the contracts were bought out by the coalition government.)  None of the other companies behaved in this way.  They didn't want publicity, apart from the odd good news piece in the local press.  For A4e, publicity was essential. 
9. While all this was going on, there were reports of fraudulent activity, acknowledged but never publicised by the DWP.  While this was fairly minor stuff, it brought out more criticism of the company.  And it should have highlighted a major cause of such activity; the intense pressure on staff to make the money, whatever it took.  Bonuses or commission for getting job outcomes; prizes for success; it all encouraged corner-cutting if not downright fraud.
10. Harrison boasted of her closeness to government.  While she probably made little impression on Blair, and none at all on Brown, she was able to persuade Cameron that she had the answer to all society's ills.  She was the solution to whatever had caused the 2011 riots.  She would rescue the horde of problem families and put them back to work.  It was hubris.  While other companies made millions for their shareholders and paid their executives very well, it was Emma Harrison's 85% share of an £11m dividend which brought A4e's huge profits into the spotlight.

Why pick on A4e?

Counting the cost

Yesterday John McDonnell MP asked a very pertinent question of the Secretary of State for Work and Pensions - and got an answer!  McDonnell asked "what the value was of contracts given by his Department to A4e in each year from 2007 to 2011."  Chris Grayling told him that details of the contracts awarded to A4e during 2007 and 2008 were not held centrally (why not?) and it would cost too much to get the information.  But he listed the value from 2009.  (You can see it on TheyWorkforYou) 

Flexible New Deal contracts added up to £157,500,000.  MWA comes to £2,656,013.  Jobcentre Plus Support contracts (6 of them) add up to £66,470,115.  All of which adds up to £226,626,128.  And that's without the Work Programme contracts, which "depend on company performance".  It's also just contracts from the DWP.
Did we get our money's worth?

A comment from the past

I've been deleting quite a few comments lately.  But one comment, from September 2009, I didn't either delete or publish; I just saved it.  Now, I think, it's time for it to see the light of day.

I set up a website in 2008.  After a year or so I suddenly found that a pusillanimous web host had bowed to A4e's claim that it was "defamatory" and closed it.  I had no opportunity to find out exactly what was supposed to be defamatory, let alone remove it.  All I could do was retrieve as much material as possible and set up again.
In September 2009 New Deal was turning into Flexible New Deal, and A4e had embarked on a marketing exercise, a road show entitled "Know Hope".  A friend in Hull saw it, and I published a short piece on 24 September.  That same night a comment came through, which I now publish in full:

"This site never fails to amaze with any attempt to try and badmouth the work A4e is doing in any capacity.  The fact is that A4e have campaigned for a new way of working after listening to clients who did not like the system under New Deal.  Flexible New Deal is an entirely new way of working where people are given a personal career coach and a structured plan over twelve months where A4e have the time and resources to assess exactly what their needs are. This has taken years of research and work with the government with the aim on improving services to help the hardest to reach.  The Know Hope Campaign is nationwide and the reason for A4e logos and branding not taking centre stage is that the emphasis is mainly on the client - Their Journey and getting them back into Sustainable Employment.  The majority of people in Hull were really enthusiastic about the changes and the new way of working. A4e are taking feedback on board and trying to make a difference. No company is perfect but A4e staff are all passionate about getting people back into sustainable employment and trying to make a difference.  A4e have tried to communicate with the person who leads this negative site to try and establish exactly what happened to make them launch this incessant tirade against the company.  We help so many people every day and there are so many positive stories that would do so much more good instead of this constant stream of negativity and accusation.  A4e want to aspire to inspire and empower people to leave benefits and improve their own lives. This is not corporate spiel but actually how everyone feels in the organisation and strives to make a difference in an economic climate that is hard to maintain a positive outlook in.  We want people to Know that there is Hope for them. It does not matter if you have barriers to employment - under Flexible New Deal we are here to make a difference.  No doubt this will be interpreted in a different way if it is even posted. But suffice to say A4e are sick of trying to find out exactly what your issue is with us. We have tried communicating and talking sense to no avail.  We genuinely want to help people - can you not find it in your heart to give us a break and see the good we can do?"

I was gobsmacked by the sheer mendacity of this.  They had never "tried to communicate", unless getting a website closed was communication.  They had never tried to find out anything.  How could they?  So what was the point of this comment?  Did they really expect me to publish it?  Probably not, but maybe they hoped it would slip through.  And who were "they", anyway?
Ah well, time moves on.

Widening the debate

I thought we might get a day off, that the furore would be dying down.  But no.

First, A4e put out a press release yesterday.  Two things are really exercising them.  The first is that continual reference to 9% outcomes on Pathways to Work.  That wasn't the figure.  They don't actually say what the true figure was, but we've seen low twenties percent mentioned.  The target, however, was 30%.  The figure isn't some aspiration, it's what the bidders promise in order to get the contract.  The best performer on this contract was Jobcentre Plus!  A4e has consistently underperformed, promising 50% outcomes on the 2006 privatised New Deal contracts and delivering around 25%.  Flexible New Deal was even worse.  So while it must be galling to see the error repeated, the fact of poor performance is inescapable.
The second factor is the reporting of the fraud investigation.  A4e states again that the disclosure was the result of their own internal processes and they reported it to the police.  Today that becomes somewhat irrelevant as we learn that four people have been arrested.  (See the BBC report.)  Now, I know nothing about what went on in Slough.  But A4e is one of a number of contractors which pay commission to staff for getting someone into work.  The temptation to fiddle must be that much stronger.
Yesterday the Guardian published a long article by John Harris.  Most of it rehashes what has already been published, but he has spoken to Margaret Hodge MP, chair of the PAC.  She became annoyed, she said, when she found that A4e had the contract in her own area but sub-contracted it to a local charity while taking 12.5% of the attachment fee.  Harris points out that this all began under Labour, and she accepts that.  It was a mistake.  Harris is one of the first journalists to see this fuss as part of a wider problem.  "The rise of A4e also highlights a very modern fact of public life: handing over large swaths of what the state used to do to the private sector has become so mundane as to barely attract comment, and some people have been doing very well out of it indeed."  Now we read on the BBC news site that a London charity, London Citizens, is claiming to be doing much better at getting people into work than the big contractors, and doing it much more cheaply.  And the article says: "There has been increasing scrutiny of work-to-welfare schemes."
That's what we need, of course.  The current targeting of A4e should be the start of a much wider debate on the role of private profit in public service delivery.

Moving on?

The fuss dies down, the media spotlight moves away from A4e, and nothing has changed.  It's time to remind myself, and my readers, why this matters.

Successive governments decided that the delivery of public services would be more efficient if it was motivated by private profit.  A few outsourcing businesses such as Capita and Serco grew fat, making big profits for their bosses and shareholders.  The last Labour government applied the same logic to welfare-to-work efforts.  In 2006 the role of Jobcentre Plus was downgraded and people were sacked.  One company, A4e, did so well from the privatisation that other players couldn't understand how they'd done it.  However, those New Deal contracts were so badly designed that results were half of what had been promised; projected outcomes of 50% came in at 25%.  Still, the contractors made a profit, and A4e widened its business, scooping up contracts in a wide range of public services, all of them dealing with the most disadvantaged people.  On the back of its success in Britain, it secured contracts abroad.  

Flexible New Deal delivered even poorer outcomes than its predecessor, but profits were still good.  And through all this, A4e behaved in a very different way from its rivals.  Who could name the boss of any other outsourcing company?  But Emma Harrison was the very public face of A4e, hungry for publicity and advising governments.  There was bad publicity, certainly.  Yet none of it lasted.  TV producers wanted to go after the company, but had decided that the only way to do such reports was with whistle-blowers and / or secret filming, so it was left to radio producers to keep up the pressure.  Harrison seemed fire-proof, however, and the incoming coalition government decided that she was the person to rescue the country from its burden of workless families.

The government was unable to rid itself of the delusion that profit was the best incentive.  The Work Programme has been designed to reward only "success".  It was never considered that a better way was to beef up Jobcentre Plus.  There was outrage when the amount of money which Harrison personally had made from contracts last year was publicised, especially when it was linked to a distinct lack of success.  Of course, the other outsourcing companies had made similar profits, but none of them had the same public profile as Harrison and A4e.  All that money could have gone to creating jobs or shaping a better service to the unemployed.

I regularly get comments from readers which I can't publish.  They tell stories of experiences with A4e which I can't verify.  But they add to the picture of a company which needs continuing scrutiny.  

Strange figures

I'm puzzled. While the projected figures for the Work Programme are being questioned there are contradictory figures being put out for the performance of Flexible New Deal. On the one hand, there's the document put out by the DWP which we mentioned the other day,entitled "Ad hoc analysis of Flexible New Deal costs" dated January 2012. This gives a table of outcome statistics which shows 407,690 starts (excluding re-referrals) and 49,740 sustained jobs of 26-30 weeks, over 16 hours a week. That's 12.2%. Isn't it? But in response to a question from Stephen Timms MP, Chris Grayling provided, on 20 January, a table of results broken down by provider for jobs lasting 3, 6, 9 and 12 months. And the 6 month figures average to 16%. A4e averaged 15% over its 5 contracts. So which one is right?

You might say it doesn't matter much, since even the larger figure is appalling. But then let's look at a piece in the Guardian by Ian Mulheirn, director of the Social Market Foundation. He points out that for the WP the "non-intervention performance", i.e. the figure the DWP estimates will get jobs without any input at all, is 30%. Just think about that. And ask why the WP is being promoted as the solution to everything. Leave people alone and 30% will get work.

I don't normally bother any more with the daft advice given by Hayley Taylor, that most famous of A4e's alumni, but the latest question-and-answer on her site makes me cross. A 59-year-old, very experienced in admin, IT, management and as a JCP advisor has applied for lots of jobs and got some interviews, but hasn't found work. What should she do? Taylor says, " I think to remove any dates that relate to your age being worked out by a prospective employer is something I would reccomend." I know we've argued about this before, but how on earth do you keep dates out of an application form? And how do you construct a CV which gives no clue as to your age? Anyway, says Taylor, you're getting interviews so you must be doing something wrong at the interview. "Work on this area and I feel you will suceed." So it's this poor woman's fault. How helpful. It couldn't just be that they pick somebody younger, could it? I'd like to think that there was better advice being dished out by WP providers, but somehow I doubt it. By the way, there's a film on Vimeo called Hayley's Top 5 CV Tips. I can't bear to watch it.

It won't work

It's in all the papers this morning; a damning report on the Work Programme by the National Audit Office. The Telegraph reports it straightforwardly. It says that only 26% of those referred to the programme will get work, not the 40% forecast. "Fewer people than expected are being referred on to the work programme in the 'harder to help' category, as providers scramble to cover upfront costs by helping the easiest set of jobless back to work, such as the highly qualified or experienced, to ensure they collect money under the contracts." Some providers will get into serious financial difficulties. The government paid out £63 million to terminate the FND contracts, only to give the WP contracts to the same companies. The Financial Times points out that some companies offered price discounts to get the contracts. Not surprisingly, the industry says it doesn't recognise the figures. And Chris Grayling says it's all guesswork, and it's all right because it's the companies which are taking the risk, not the taxpayer. No, Mr Grayling, it's the unemployed who are taking the risk. He also says that the providers will be able to release "limited information" before the official release of data in March; so watch out for loads of spin - numbers of job outcomes without any start figures. What's important about this, of course, is that the government is waving the Work Programme as the solution to everything, especially in its determination to reduce welfare benefits.

No one has yet related this to the release of figures for Flexible New Deal by the DWP. They show that the total cost (money paid out to providers) was £770m. The percentage of "sustained" jobs to number of starts was 12.2%. Yes, just 12.2%.

Do you remember an exercise you used to do at school called "comprehension"? You had to read a piece of text and then answer questions to show you'd understood it. Well, if you were any good at that you might like to try reading a submission A4e made to the Communities and Local Government Select Committee on community budgets and tell me what the point of it is.

Bizarre PR

We are used to A4e sprinkling PR pieces all over the internet, but the latest effort is particularly bizarre. Foodbuzz is a "food blog community" site; but this month A4e joined and on 23rd posted 14 links to pieces on its own website (which, of course, have nothing to do with food).

Note: they've now been removed - see comment below.

One of A4e's Business Improvement Managers has his CV on a jobs site. One intriguing statement on it is that in Flexible New Deal in his contract area he moved "over 45% of referred customers into full time employment". But the DWP has published the figures. In that particular area, between October 2009 and October 2011, A4e had 14,810 starts, of which 3,230 got short-term jobs and 2,150 got "sustained" jobs. Now, even if you add short and long-term together, it only comes to 36.3%. So I wonder where the 45% figure came from.

What went wrong with FND

An interesting evaluation of Flexible New Deal has been published by the Policy Studies Institute. (The link to the full report doesn't work.) It doesn't name providers, which is a shame. However, some of its findings are:

• For the 18-24 year old group, it was less effective than New Deal.
• It often didn't live up to the expectation that support would be individually tailored and personalised.
• There was little innovation in the design of the service provided and "greater flexibility also appeared to have led to differences in the amount of support received (eg, variation in access to training and in-work support, and different rules on the payment of travel expenses)."
• Some providers didn't meet the requirement that they should see clients once a fortnight and couldn't find "work-related activity" for all clients.
• Finally, "The qualitative research identified several issues with regards to the effects and administration of sanctions, including poor timing and inconsistency of messages between Jobcentre Plus and providers, and staff believing long-term claimants were less likely to change their behaviour when faced with the prospect of losing money." I'd have to read the full report to be sure what that means, especially that last bit.

What's worrying is that the Work Programme is similar to FND in many respects.

Terrible results

We haven't anything yet about Emma Harrison's meeting on Tuesday with people from the Education Department. She hasn't mentioned it in her tweets, although she has talked about the reception at No. 10 for the Nordic Baltic MPs. I wonder if they talked about the figures for Flexible New Deal, which are out now for the period Oct 09 to Nov 10. I'm sure they'd have been impressed with the fact that of 315,000 people who started on the programme, 6% (that's right, 6%) got "sustained" i.e. long-term jobs. Short-term job outcomes weren't much better, at 10%. In the 5 regions where A4e had contracts they performed more or less the same as their competitors and their results were in line with the average. Worst was in central London with 9% short and 5% long-term jobs, while best was Cambridgeshire & Sussex, with 13% short and 8% long-term outcomes. (Remember, don't add the two percentages together. A short-term job turns into a sustained job.) No wonder there are worries about the Work Programme and its viability.

Is the publicity-hungry Emma Harrison going to be called on to explain these terrible results? Perhaps she would say that they will do better when they are allowed to interfere in the lives of "whole families".

Those figures

The DWP has released the figures for Flexible New Deal outcomes; you can download them from their site here. They are not immediately understandable, since all you get is the starts and outcomes for each month and, of course, the outcomes don't relate to the starts. What you can see straight away is how bad the figures are, and that A4e has performed comparably with the others.

There are two articles which interpret these figures in very different ways. One is by Alex Barber in the Financial Times. He asks "What has gone wrong with welfare-to-work?" and includes a graph to show how far below expectation the outcomes are. Barber argues that Grayling's criticism of the Labour government is misplaced. "Grayling argues it [paying too much money up front] destroyed incentives. But companies were still paid the bulk of their fee for getting someone into work. Not only that, but the Work Programme will also include upfront payments. It will just be called something like an 'activation fee'." And the "help based on individual needs" promised in the Work Programme will be little different from FND.

Another perspective altogether comes from Neil O'Brien in the Telegraph. O'Brien is one of those dangerous young men who provide the theoretical justification for political ideology. With no personal experience or historical insight he assumes the part of an authority on the subject, with selective use of data, and he wants to give more power to the providers to "sanction" people. He includes a table which shows that A4e's performance is slightly better than its competitor in each area. O'Brien has been around the media lately -he was on The Moral Maze last week - touting his view that we should have the time-limited kind of welfare-to-work that exists in some other countries, notably America.

Meanwhile, there's a whole new world of opportunity opening up for A4e. The government have endorsed the idea that groups of public service workers should turn themselves into "mutuals" or co-operatives. The bit they don't mention is that they would then have to bid for the contracts to provide the services. Even if the private companies don't get the contracts first time round, they will soon be picking them off.

Clawing back

Chris Grayling "slams" Flexible New Deal in a piece in the Express and Star, a Midlands paper. It was "chronically mismanaged", he says. "The Flexible New Deal programme helped 16,200 people find work, working out at a “staggering” £31,284 per job, said employment minister Chris Grayling. More than £500 million was spent in a year, mainly for service fees under which providers were paid for every person the government thought would go through the scheme, regardless of the outcome, the minister said. Mr Grayling cancelled the contracts on taking office in June and revealed that £100 million worth of service fees had been “clawed back”." He goes on to insist that by paying only for outcomes the Work Programme will be completely different. Naturally, he's blaming the Labour government. But the prime contractors in the new scheme will probably be the very companies which, he says, failed so badly on FND (and on Pathways). Was it just the contracts which were wrong, or were the companies at fault? Apparently not. And what does that bit about "clawing back" £100 million in service fees mean? Have A4e and the others had to pay that money back?

Workfare - nothing new

The news today is full of headlines like "Unemployed told: do four weeks of unpaid work or lose your benefits" from the Guardian. In several papers, of course, the epithet "work-shy" is used. And as always the media ignore the fact that this is not new. Under Flexible New Deal claimants are supposed to do a 4-week placement, and the requirement goes way back to old contracts. There are all sorts of problems; small employers don't want the hassle, and the voluntary sector has been stuffed with non-volunteers doing "placements". If anything is different this time, it's that they're talking specifically about "manual labour" and allowing it to be seen as punitive. I suspect that little will actually change. With so many public sector jobs being axed, the unions are not going to stand for street cleaners and the like being replaced by unpaid work gangs.

Contracts, tweets and volunteers

All the attention at the moment is on the Work Programme; and the government is still saying that it can't give any figures for the cost of ending the Flexible New Deal contracts because they are still negotiating. Obviously the incentive is huge to give the new prime contracts to the firms which are already running FND, rather than having to pay them off.

But meanwhile A4e picks up more small contracts. There's something called Hartlepool Works where they're running a project funded by the European Social Fund and the Learning & Skills Council delivering basic skills. And there's more life skills on offer in Blaenau Gwent with £1.27m from The Big Lottery Fund.

We've had A4e's Roy Newey on Twitter for some time, and Mark Lovell occasionally tweets. Now Emma Harrison has joined in (she's emmachat) with news of "A4e summit. Manchester. Senior people from around the world. All of them passionate about our single vision to improve peoples lives."

CDG, one of the providers seeking to expand, is still going on about getting an army of expert volunteers involved with the Work programme, mentoring the jobless. They held a "summit" which doesn't seem to have been attended by any of the other providers. "It is an effort owned by all those with an interest in helping those who have been unemployed for a long time back into work, with CDG’s initial role being to put the initiative forward, and to give it shape and structure so that it gains momentum," reports the Indus Delta site. As we've pointed out before, it's hard to reconcile the use of volunteers with profit-making private contractors. CDG is a charity, and it's boss may think that it operates differently. But charities are involved in contracts on exactly the same basis as private companies, and they employ people on the same basis. If CDG take this forward they are going to come up against some difficult questions.

No choice

There's an interesting exchange on the BBC "Ouch!" message boards started by someone who got a phone call from A4e. The person had no idea what "A4e" was, and, when told that s/he was in receipt of direct payments for social care, was still flummoxed, since the only payment s/he had received was a one-off small cheque some time ago. The point of this account is not simply that an A4e employee made a mess of a phone call; it's that a great many people can have vital parts of their lives controlled by this company without even knowing it. Privatising public services removes choice and it removes accountability. The thousands of people whose direct payments have been farmed out to A4e had no say in the matter. Similarly, those whose children are referred to Vox centres, or who have to access a CLAC any of the numerous services "outsourced" by local councils, may well not know that it's A4e who are running things. In some cases, like direct payments, even the local councils have only the choice between A4e or keeping the service in-house, because there are no other players.

Welfare-to-work similarly gives the client no choice. Flexible New Deal was set up with choice in mind. Each area would have two prime contractors so that clients could choose between them; but the companies successfully argued that the clients would not have enough information to make an informed choice (previous reputation being, apparently, irrelevant) so for the first year they would be allocated to a provider by the Jobcentre. Now with the Work Programme each of the 11 large areas will have a single large contractor, which will engage a lot of smaller outfits and create competition between them. (A4e describes this set-up on their MyA4e site.) Note that the client has no say in the matter whatever.

Few people know or care about this - until it impacts on them, and they find that there is nothing they can do about it.

The transition

We reported last week Freud's reassurance to the FND providers "that all providers currently performing well will take a full place in the new programme and as long as they worked hard, they had no need to worry." That came after Emma Harrison's apparent assumption that A4e would have contracts. On Wednesday a written answer in the House of Lords shed a little more light on the situation. Lord Kirkwood of Kirkhope (who was, as Archie Kirkwood, a Lib Dem MP), asked "what is their [the government's] estimate of the legal costs of cancelling last year's phase 1 contracts with employment providers to deliver phase 1 of the Flexible New Deal." (See theyworkforyou.com). The answer from Lord Freud was, "We have embarked on some very productive meetings with FND1 providers on how between us we best manage the transition from Flexible New Deal to the new work programme. It is too early to provide an estimate of the likely costs of making this transition and indeed some of this will depend on whether existing FND1 providers are successful in bidding for the work programme." What that means is that the ideal scenario from the DWP's point of view is that the current providers bid for the new contracts and are acceptable, so that there is a cost-free transition. If any of them decide not to bid they will be entitled to compensation for the premature ending of the FND contracts. And that gives the "primes" like A4e a lever to extract concessions in the WP contracts, and little hope to any new providers who want to come in.

But according to Ben Brogan in the Telegraph the DWP is giving cause for concern. "Iain Duncan Smith is admired for his commitment to reform and the passion he brings to the issue. But the jury is out on whether he has the skills necessary to translate ideas into action, let alone deliver them at the helm of a complex bureaucracy. The ideas are great, but the detail is a killer. Some speculate that Chris Grayling was put in there to provide the executive oversight, after he made a success of the DWP brief in Opposition. But civil servants report that Lord Freud is roaming beyond his area and wonder whether he might turn out to be the Frank Field of the outfit if his frustrations with IDS begin to be felt. To cap it all Mr Field is being given a role to involve himself in welfare issues and the department fears that like some unmanned drone, he will keep circling above the battlefield, launching occasional deadly strikes." So nothing is certain. and it's still a case of "wait and see".

Ministerial statement

Chris Grayling has issued a written statement giving a bit more detail about the transition to the Work Programme. There are details on the Indus Delta site and on the CarleyConsult site. It contains nothing really new, but we now know that FND1 providers (Flexible New Deal phase 1) are being given 12 months' notice of the termination of their contracts. The worry now for those providers is whether they will be the preferred bidders for the new Work Programme contracts. A4e's Emma Harrison certainly gave the impression on Sunday that she expected that to be the case; and Graham Hoyle, Chief Executive of the Association of Learning Providers, has said that Freud has suggested as much, and wouldn't it be odd if they weren't, "unless of course any had not been able to cope with the current opportunities". It will be interesting to see whether a provider's record will be taken into account.

No decision has apparently been made about the future of Work for your Benefit.

The new buzzword is "framework". This appears to mean that a number of selected providers will do not only the basic WP stuff but also any other work-focussed services required by other "public service commissioners". How this framework will help to include smaller organisations, except as sub-contractors, is not clear.

"Providers of New Deal to voice concerns"

There's to be a meeting tomorrow, 2 June, between the "minister for work", Chris Grayling, and the body which represents the New Deal providers. That body, the Employment Related Services Association (ERSA) is chaired by Rob Murdoch, who is an executive director of A4e. The Financial Times reports on this today, and says that the providers "have spent millions bidding for the second wave of Labour's Flexible New Deal contracts". It goes on: "Those contracts were put on hold just as they were about to be awarded when the general election was called. But the existing providers also hold contracts under the first wave of Flexible New Deal that run to 2014." Current stop-gap contracts are due to stop taking on new clients next month, and the government wants the Work Programme up and running by April next year. Given that the government wants to roll up all the various existing contracts into one provision and put people on it much earlier, it "implies larger scale contracts", says Murdoch. He points out that if providers are only going to get paid for outcomes, it "has big implications for cashflows". If an organisation has to wait longer for payment, only the biggest companies can afford to bid for the contracts and stump up the money. Murdoch also has a threat for the government. "If they breach contracts, that would be very negative for how the provider market looks at the changes."

This is something which, presumably, the government has thought about. They have suggested in the past that they want to get smaller organisations and the "third sector" involved, but that will only happen if they act as sub-contractors to the big companies.

A quiet time

It's a quiet time on the government contracts front, and there's little news from A4e. But their business continues. Earlier this month, for instance, Middlesborough put more work their way with the Middlesbrough Enterprise Gateway (MEG), which "is encouraging self-employment and small business start ups with one-to-one coaching." See the nebusiness website.

Meanwhile, various accounts are appearing on the internet of people's experience of Flexible New Deal. As with New Deal, such accounts are not necessarily representative of the whole; they are by people who feel strongly enough to vent their frustration. And clients are, by definition, people who have been unemployed for a long time. But some common themes are emerging. Clients feel patronised, and say that the promised respect is not forthcoming. They complain of inconsistent information and pointless occupation. This was, perhaps, inevitable. There is little hope that these huge, money-wasting contracts will end with a new government. The small contracts will probably proliferate. It's a depressing prospect.

What a good idea!

It's always nice when influential people agree with you. Today we learn that "the Local Democracy think tank LGiU has proposed a radical devolution of responsibility for back-to-work services from central government to local councils." See the egovmonitor site. Their report says that local councils are much better placed to understand the needs of their areas, and cites the Dutch model which rewards councils for cutting the benefits bill by getting people into work. The article ends: "The report argues that a large financial incentive would help mobilise all local authority services around the goal of helping people get jobs and keep them there. The money would be re-invested in local communities in ways that would further support opportunities for work, rather than at present under the Flexible New Deal, where it is absorbed by private profit. It is a self-financing scheme for local investment, aimed at both tackling the human tragedy of long-term worklessness and restoring public finances."

It's common sense, really. I wonder why no one in government or opposition is listening.