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.

Round-up, 25 September 2010

Knowing that PR pieces are more effective than news, A4e are still plugging the failed Pathways scheme. Typical is an article on Guildford People citing the success of one man in getting back into work, thanks to A4e. It ends with the standard advert for the company. We're happy for the man who is back in a job - let's hope there a few more such successes.

Another piece of marketing is A4e's involvement with the Homeless World Cup. It's a tournament taking place in Brazil. Like all such events, it's a vehicle for sponsoring companies to advertise their wares, and A4e are making the most of it.

All the outsourcing companies will be watching events in Suffolk, as the County Council plans to flog off all its services. They are following Barnet, which was dubbed "easycouncil" after its plans to do the same (although Barnet's auditors have now warned that the council doesn't have a credible business plan). In Suffolk, "Services would be offloaded in stages. While some 'early adopter' services could be outsourced as early as this autumn, the rest would be divested in three phases from April 2011. Libraries, youth clubs, highway services, independent living centres, careers advice, children's centres, registrars, country parks and a records office are among the first services that could be divested." This is supposed to save 30% of the council's budget, and it's an attractive model for Tory-controlled councils around the country. But, as Chrus Huhne has pointed out, unless the contracts are very well designed the councils can get stuck with failing delivery which they can do nothing about. As the bids go in from the likes of A4e, Serco and the rest, residents will have no say in which company ends up running, for profit, the public services that are vital to them.

A4e have submitted a memorandum to the government on Local Enterprise Partnerships. These LEPs are going to replace the Regional Development Agencies which were a lucrative source of contracts for private companies, not least A4e, so you would expect to find them eager to have a role in the new set-up. Sure enough, the memo proclaims A4e's credentials; it "has close, practical experience of the past and current approaches to local economic development, understands the issues intimately and is well placed to contribute to the debate on their future led by the new LEPs." There is much more in that vein. They want to ensure that the Work Programme is "joined up" to the rest of the LEPs' activities; and they want more of the "Total Place" concept, "joining up locally provided services". A4e wants to be one of the "managing agents" which, they recommend, will be commissioned by the LEPs. You can't blame them for trying, and perhaps they'll succeed. LEPs could be a bigger source of profit than the RDAs.

For a political take on New Deal read an article on Progressonline by Alison McGovern, a new Labour MP.