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?