Everything must go

The government is in a desperate hurry to sell off whatever it can of the remaining shreds of the public sector.  Yesterday it announced the winning bidders for the Transforming Rehabilitation contracts, that hugely dangerous outsourcing of probation services.  As we can see from the Guardian's report on this, two companies get more than half the business.  Sodexo gets six areas, Interserve five; of the rest of the 21 areas, Working Links gets three and Ingeus two.  All have signed up charities to do the work.  Between them they will handle more than half of the probation service work, with supposedly medium and low risk offenders.  Their profits will be on a payment by results basis, albeit under a more complicated system than that of the Work Programme.  G4S and Serco had to withdraw their bids because they are still under investigation for fraud.  A4e, we understand, also withdrew from the process.
It's bad enough that such we have to watch this vital work flogged off for private profit.  Worse is the fact that the companies' profits have been insured against a new government pulling the plug on these contracts.  They are guaranteed their expected profits for 10 years!  So it would be ruinously expensive to cancel them.

We also heard yesterday of the company replacing Atos in the WCA contracts.  It's Maximus, an American company with as dreadful a record in the US as G4S and Serco have here.  For details, look at this piece on the Disability News Service site.  We can't know the financial arrangements that brought Maximus into this, but we should.

We learn from the Guardian that the government is pressing ahead with another disturbing outsourcing scheme; that of child protection services, currently the responsibility of local councils.  A lot of people are not aware that private companies already run children's homes, looking after the most vulnerable children for profit.  Now the government wants to take child protection out of the councils' hands altogether.  It might be thought that, given the stream of news recently of councils' failings in this area, it couldn't be any worse.  But councils are accountable for what they do.  Private companies just want to make a profit.

You will have read today that the government has considered cutting ESA to only pennies above JSA level.  It denies that it's actually going to do it, and the cries of protest will probably stop it this side of an election.

ATOS out, but secrets and spin remain

We knew that ATOS were pulling out of their WCA contract, but the terms have now been agreed.  Of course, we don't know what those terms are; commercial confidentiality and all that.  But Mike Penning, the minister, is obscuring matters even further by first insisting that "Atos will not receive a single penny of compensation from the taxpayer for the early termination of their contract.  Quite the contrary, Atos has made a substantial financial settlement to the department," and then, "“They haven’t pulled out actually, we’ve removed them from the contract.  This is not them walking away.”  But "sources close to the company" pointed out that, "People don't usually pay a fine if they've been sacked."  In other words, Penning wants to talk tough and insist that it was the DWP which sacked ATOS, whereas we know that the company wanted out and was negotiating terms.  
The Independent says that the DWP is talking to Capita and Maximus with a view to them taking over the contract, but it's felt that the government is going to have to pay a huge amount of money to get anyone to take it, since it only lasts until August next year.  And Channel 4 News' Factcheck blog has pointed out that the assessments, although carried out by the company, were devised by the DWP.  Will they be changed?  
Atos says that anyone who has an appointment with them for an assessment must keep it, but they won't be making any new appointments.

A4e and the government

The latest edition of Private Eye has shown once again the unhealthy relationship between A4e (and the other Work Programme primes) and the government.  They have documents released under FoI relating to a meeting which Chris grayling had last July with A4e directors.  At that point it was already clear, or should have been, that the WP was failing, and the publicity around A4e had been terrible.  But Grayling tells them, "In six months it will be all forgotten," and that he's grateful for what they're doing.  Grayling was replaced by Mark Hoban, who was similarly congratulatory at a meeting with Maximus in September.  The article continues: "The most revealing document, a 'short feedback' email, says Hoban wants Maximus' views on 'how we "sell" the Work Programme'."
Hoban has since made stern noises about tackling under-performance on the WP.  But, as the Eye points out, this is indicative of the fact that the government is more concerned with covering up the failures than securing value for money.
One important link with government for A4e was Jonty Olliff-Cooper, and he has gone.  The only publication to have picked up this fact is the Guardian, with a diary piece by Hugh Muir.  He points out that Cooper used to be "assistant to eccentric [Tory] strategy guru Steve Hilton".  Muir seems to be suggesting that Cooper has departed because the WP figures, due out shortly, are going to be terrible, but I wouldn't be surprised if he's clearing his path to a seat in parliament.  Nor would I be surprised if his position became untenable after his appallingly ill-judged tweets.  His going leaves one strong link between A4e and government, however.  After the meltdown last year and Emma Harrison's departure, the company hired the PR consultants Quiller, which includes George Bridges, "a pal of Chancellor George" as Muir puts it.  This was supposed to be a temporary arrangement, and Jonty confirmed that in a tweet not long ago.  But Quiller is still there.
Outsourcing by government is not a straightforward business relationship.  There are mutual interests, which are not necessarily those of the people who ultimately pay the bills - us.

Financially viable?

Nobody seems to be asking at the moment whether the Work Programme is financially viable for the providers.  The Work and Pensions Committee has taken evidence from "users" and there is a focus on the voluntary sector and small organisations which have found that the programme is not working for them or for anyone else.  Charities which help the homeless are particularly concerned about the specific problems of their clients being ignored; WP providers not even asking whether someone is homeless.  Yet the charity Crisis says that it got two people into work separately from the WP but was contacted by a provider asking for details so that it could claim the outcomes.  Meanwhile the media are focussing on other groups such as the disabled.  I missed the Panorama programme, but I gather that A4e was just one of the providers that didn't come out of it very well.  The response of A4e, as usual, is to point to a success story.  Next Sunday morning at 11.00 Radio 5 Live is looking at self-employment and the WP.
But, as I said, nobody is asking whether the whole thing could founder on the fact that the providers can't afford to run it.  The government insisted from the outset that only the largest and most financially secure companies could be prime providers, and that drove some companies, such as Ingeus, to partner with companies which could guarantee their financial security.  A4e didn't do that.  Nonetheless, the DWP was surprised that some potential primes put in bids that even the government didn't think were viable.  It now appears that the attachment fee income was sufficient to keep the companies ticking over.  Maximus, for instance, said that it had broken even on the first year.  But A4e's accounts to March 2012 showed them in deep trouble, and apparently without the expectation that things would improve much.
So what would happen if a prime decided that it just couldn't afford to go on?  Would the business be transferred to another company - assuming anybody wanted it?  Would they have to pay a penalty for breach of contract?  Is the government busy renegotiating terms in order to save the skins of these companies?  If that happens, I suspect it will be slipped through without publicity.

Someone put a petition on the government's e-petition website asking for the abolition of "work for your benefit/workfare schemes in the UK".  The rest of it was eminently sensible, but unfortunately the DWP was able to seize on the description and deny that there was any such thing as workfare in this country (it's American) and equally no such thing as "work for your benefit" - it's all about support.  How lucky that they changed the title of Labour's pilot scheme from "Work for your Benefit" to "Mandatory Work Activity".  

More stuff in more places

A "national celebration of enterprise" has been held in Sheffield, with Peter Jones of "Dragons' Den" as the chief attraction. It's a big annual event apparently. There were government ministers there and - you guessed it - A4e's Emma Harrison, who "was introduced by Sheffield MP David Blunkett, the former Home Secretary". She "told the audience about her schooldays as 'the naughty girl' who failed her A-levels She set an ambition to become the world’s largest organisation that improves people’s lives with a business plan focusing on scope and geography – or 'more stuff in more places'. This year, her company is set to turn over £250m." (Yorkshire Post) I'm sure it was inspiring.

Most of the Work Programme prime contractors have, in the past, been content to let A4e do all the publicity-seeking. But it's a competitive business, and some of them are now honing their own PR. Ingeus (Australian) isn't shy. And now we have Maximus (American) putting out PR stuff about how they got the best results in Flexible New Deal. They were "top-ranked provider" - but nowhere in the piece are there any figures. I suspect that the figures for FND were so bad all round that no one wants to boast about them.

Emma Harrison once said that she had wanted to convert A4e into a mutual organisation but had found that the obstacles were too great. Perhaps she should talk to the people from Prospects, which has been doing welfare-to-work and similar stuff for 16 years and now has a WP contract. It started out as a company limited by guarantee (no shareholders) and has now turned itself into an employee-owned mutual.

In the run-up to the WP contracts, CDG was arguing, and organising conferences, for an army of volunteers to mentor the unemployed. It's now a sub-contractor of Maximus in West London, and is advertising for a "volunteer co-ordinator". It will be interesting to see how volunteers will be enticed to help make profits for business.