Politics

Chris Grayling has performed so well at the DWP that he has been promoted to the Cabinet as Justice Minister.  There is no word yet as to who replaces him.  Iain Duncan Smith was apparently offered the job but wanted to stay put.  So we expect no change.

No change to the Universal Credit policy, despite criticism from several sources.  The Chartered Institute of Taxation is concerned about it being "wholly impractical" for the self-employed, who will have to report their transactions every month, within 7 days of the month end.  The Federation of Small Businesses agrees.  Gingerbread, which campaigns for single-parent families, is even more worried.  They reckon that more than a million such families will lose out.  Read their findings here.

Some change (for the worse) for those who have been shifted onto ESA work-related-activity.  They will now lose up to £71 a week if they don't comply with the instructions of their "advisers".  The Guardian has an excellent article on this.    The Telegraph, however, chooses to headline its own account as "Fines for workshy sickness benefits claimants to double."

No change to the government pretending that millions forced into part-time work because they can't get full-time is a good thing.  The Express has a good article on this, which ends with a typical Grayling "everything is wonderful" quote.

But there is change - dangerous change - in the numbers of people having to depend on food banks.  There's an excellent, detailed article by Paul Mason on the BBC's website.  It shows that 43% of the people needing to turn to these food banks are there because of benefit "sanctions" or the refusal of a crisis loan; and there's a graph showing how these sanctions have spiked.

Another of those MPs who have been invited into A4e's offices has blogged about how impressed he was (scroll down the page).  He's Conservative Guto Bebb, MP for Aberconwy.  He's another who thinks that self-employment is great.  But he complains about the Welsh government (Labour, I believe) supposedly creating initiatives which are damaging the Work Programme.  Or so A4e says.  Does anyone know anything about this?

Grayling on Newsnight

Okay, I take it back.  The BBC did tackle the A4e fraud question on Newsnight last night.  If you missed it (as I did) you can catch up on iplayer here 25 minutes in.  Paul Mason summarised Eddie Hutchinson's evidence, picking out all the juicy bits.  He then showed the 2009 internal A4e report which, he said, they had handed to the DWP only to be told that they weren't interested because they were concentrating on current programmes.  Mason said that Hutchinson had been surprised to learn of this report.  (He joined the company the following year.)
Emily Maitliss then interviewed Chris Grayling.  She wasn't sufficiently clued up about the contracts, but the main points got across.  Grayling insisted that the allegations were not about the Work Programme, and that the detailed investigation done by the DWP's audit team and Ernst & Young had found no evidence of systemic fraud.
Maitliss tried the obvious questions.  Is A4e a fit and proper company?  If this was a fraudulent benefits claimant he would be "down on them like a ton of bricks".  Grayling stonewalled, but said that there were "significant doubts" about the evidence and "significant doubts" about Eddie Hutchinson.
So the strategy is clear.  Suggest that Hutchinson is a liar.

The future of A4e depends .....

All the newspapers have reported the revelations from the BBC yesterday.  The coverage ranges from the Daily Mail's usual strident reporting, complete with graphics, to the more sober account in the Telegraph, which quotes an A4e spkesperson: "While this investigation uncovered a number of areas where procedures may have been lacking, the final audit and further investigation determined that five claims were irregular and related to one former employee.  This was reported to the DWP Risk Assurance Division, which confirmed that the action taken by A4e fully met their own audit requirements and that they considered the matter satisfactorily resolved.  A4e repaid the value of these three claims in full, which totalled less than £5,000.”  

The Yorkshire Post has the full quote from the DWP: "A 2009 A4e internal audit and risk document, relating to programmes contracted by the previous government, has today been passed to the department.  The Work and Pensions Select Committee was made aware of this audit at the time and the department later received assurances from A4e that it had not uncovered any major issues."  [my italics]

Paul Mason picked up this point on Newsnight tonight.  He said the DWP is now certain that it never received the report.  Yet weeks ago it asked for all the relevant information.  The report was made public in October 2009.  (I'm not sure what he meant by this.  Presumably it wasn't this leaked draft which was made public.)  So what did the DWP get, Mason asked.  
A4e says that they reported to the DWP the results of a final audit and further investigations.  The DWP says they only got the document yesterday. So was the version of the original audit report which was given to the DWP devoid of all the damning findings and warnings?  Did it amount to a cover-up? 
Mason ended by saying that the future of A4e depends on what was actually submitted in 2009.

Is this the end? Newsnight revelations

When Newsnight devotes nearly 20 minutes to the story you know it's serious.

We got a trailer in the news; and the Guardian published the details earlier tonight.  But the piece on Newsnight was pretty devastating.  A report has been leaked, an internal A4e audit, which found evidence of widespread fraud and irregularity.  Numerous job outcome claims could not be backed up by evidence.  If this was systemic management failure, asked Paul Mason, why have A4e still got contracts?  We were shown David Cameron at an A4e office and told that A4e are paid £170m a year.  Then we were told that 224 client  records were examined from 20 of the company's top performers.  4% of the claims were described as potentially fraudulent and 12% as risky.  These cases come from all over the country.  Employers complained of being given blank forms to sign.

A4e were said to be playing it down and wouldn't be interviewed.  Kirsty McHugh of the ERSA (the industry trade body) said that appropriate action had been taken.  But the DWP never saw the document.  Why not?  And what did A4e do about it?  Mason said that there were questions for the politicians.  The government has a duty of care to the unemployed who are being sent to A4e.  No one from the DWP would be interviewed.

That gave free rein to Margaret Hodge, who talked of a "shocking catalogue of incidents" and fraud being "erndemic in the company".  Any manager of moral integrity would have shared this evidence with the DWP.  Hodge is sure that it's a systemic issue throughout the company.  She has had over a hundred emails on the matter.  The company has been greedy, she said, and she wants their contracts suspended.  people will lose trust in the system as a whole.  She rejects the idea that this was all in the past and couldn't happen now.  She believes that the culture in A4e hasn't changed, and they are not an appropriate company to be getting all that money.

Liam Byrne was also interviewed.  He wants to know if ministers knew about this when A4e got the Work Programme contracts, and what checks are now in place.

The government is now in a difficult position.  Trying to bluff this out, when even the BBC have got their teeth into it, makes them look complicit in fraud.  But pulling the plug would be very messy.

If I had to bet on it?  I think it's the end for A4e.

Stop press - Newsnight tonight

We've just heard that Newsnight (BBC2, 10.30) has a special report tonight, 22 March, on A4e.  They have a leaked report, A4e's own audit, from 2009, which suggests widespread potential fraud.  Paul Mason says that it reveals that A4e knew that its controls were "minimal".  It surveyed only the top 20 recruiters in the company, and found that 8% of the outcome claims were potentially fraudulent and only 70% could be verified.  Employers say that they were asked to sign blank forms.  Two of those staff named are still working for A4e.

This could be dynamite!

"All relationships" - and new contracts

It must be serious, it was covered by the BBC.  The new fraud allegations and the DWP's investigation were reported, albeit briefly, on Newsnight.  Paul Mason put a slightly different spin on it.  As the Guardian reported, the government has launched an audit of 10 other A4e contracts.  Mason takes that to mean that it will ask why A4e was given so many contracts; but I doubt that.  It would have to go back ten years to be credible.
Most of the media add little to the press releases of the DWP and A4e.  The Huffington Post carries the reaction of union leader Mark Serwotka.  The Guardian gets someone to explain how the MWA fraud might have come about.  The Mail is remarkably restrained.
At the same time as all this bad publicity, there is good news for A4e.  As reported on FE Week, it is the "preferred bidder" for 2 of the 9 prison education contracts announced by the Skills Funding Agency.  The SFA is keen to make clear that this doesn't mean that the contracts are signed.  There's a "due diligence" stage to go through before they are finalised in the early summer.  But this will be the acid test of the government's seriousness.  I have had to delete comments from people who know, and are concerned about, A4e's role in OLASS, but some of them may now make themselves known to journalists.
A4e has announced that its new non-executive Chairman is Sir Robin Young.  He was a career civil servant before retiring to directorships, and became a member of A4e's board in 2007.  He begins his statement with the words "A4e's role is to improve people's lives".
Back to the investigation.  The government has said that A4e could have its contracts suspended if it is found guilty of "systemic fraud".  It's that word "systemic" which could prove the get-out for A4e.  It seems likely that the instances of fraud are the result of two factors; the intense pressure in the company to meet targets and make the money, with bonuses for outcomes, team prizes etc.; and a large proportion of inexperienced, minimally trained staff.  But if that is the case, should it let A4e off the hook?

At last, Newsnight - but nothing new

Well, the BBC finally got round to reporting on the A4e story, on Newsnight tonight.  But it was half-hearted, just pulling together what everybody else has reported - including using the whistle-blower Catherine who made the front page of the Independent.  She told her story briefly; and A4e had had time to come up with a refutation.  She was not told to work for one week without telling the Jobcentre, they say.  It was only one day, an unpaid trial which doesn't have to be notified to the Jobcentre.  This is what tends to happen.  A whistle-blower got it wrong / is not telling the truth / misunderstood what was said.  And what can Catherine do about that?  Margaret Hodge said that she had received an "astonishing" number of allegations and wants A4e's contracts to be suspended.  Paul Mason, who had started by describing the "pally" history between A4e and government, ended with a mention of the employment of David Blunkett and Jonty Oliff-Cooper.  So nothing new.  But the BBC may now feel that it's done its bit.