Transparency

Paul Maynard, MP for Blackpool North and Cleveleys, blogs that he is encouraged by his "discussion with a local representative from A4E here in Blackpool, who are running the Government’s Work Programme scheme here in the North West. Whilst I often here (sic) that there are no jobs out there, it was refreshing to hear a slightly more positive point of view. No-one pretends that we are in the midst of economic boom, but the patient accumulation of business contacts is ensuring that A4E is becoming a one-stop shop for many employers with vacancies to fill." He goes as far as telling people looking for work who are not on the Work Programme that they should give A4e a call. Well, let's hope he's right.

But we won't know how successful A4e and the other providers are until next March. That secrecy is understandable up to a point. Even if someone got a job on the very first day of the Work Programme they won't yet have been in the job for 6 months. And the DWP is going to use the figures to compare the providers in a region and reduce the number of clients to an obviously failing provider, so a running commentary on the figures wouldn't be helpful. But it means that we have no idea whether the hype matches the reality. And lack of transparency is one of the themes of an article on the Morning Star website by Solomon Hughes. In the name of "opening up public services", he says, Cameron is handing over the funding of public services to private investors. Hughes describes how A4e has been hired to design the contracts for schemes funded by social impact bonds, something we highlighted recently. While this hasn't been a secret, it's not something that the average person would think sensible. The article is well worth reading.

A £300k contract

We mentioned an A4e company, "A4e Insight", first in November 2009. This "research and consultancy arm" of A4e had provided consultancy on two projects, money guidance and "train to gain", in which it had a large financial interest. In February 2010 we wrote about another Insight consultancy project in which it had provided "due diligence" research on a competitor training and skills company. This curious task of selling consultancy on things in which you have, or may soon have, a vested interest continued when, in February this year, A4e was named as a mentor to start-up public sector mutuals. Now we have a report of another contract for A4e Insight. It's getting £300,000 from the Office for Civil Society to investigate the effectiveness of social impact bonds in four pilot areas. (See the Third Sector website)

This is Big Society stuff, the OCS first describing the project in August this year. We were told then that "The OCS is not funding the projects, but has made up to £300,000 available to offer technical support to the councils in order to design the new tender documents." Is this the same £300k going to A4e? Mark Lovell has written enthusiastically about SIBs. Does this compromise the objectivity of the research?

The bandwagon

Lots of people are leaping aboard the bandwagon of solutions to unemployed trouble-makers, and displaying the usual ignorance, arrogance or naivete. All three are evident in a piece on supplymanagement.com by Rebecca Ellinor, who reports that the DWP believes it has "struck what it calls a ground-breaking commercial deal, with minimum cost to the tax-payer, and says this work is now an exemplar of procurement" with the Work Programme. It describes the speed and efficiency of the process; but neglects to mention that it's a procument process which ignores past failures by providers. Does any commercial enterprise operate like this?

The Financial Times takes a more intelligent stance in a piece by Chris Tighe. It highlights the way in which smaller, especially voluntary, organisations have been squeezed out of the Work Programme.

Then there are Social Impact Bonds. We reported on these some time ago, because A4e's Mark Lovell is very keen on them; and someone who is promoting these was on the Today programme a few days ago. The Cabinet Office describes them thus: "A major trial of an innovative new way to fund intensive help for families blighted by anti-social behaviour, crime, addiction and poor education was announced by Nick Hurd, Minister for Civil Society today. Social Impact Bonds lets people invest in social projects to address these issues and be paid a return if the projects are successful. Up to £40million could be raised by four Social Impact Bond pilots launched in Hammersmith & Fulham, Westminster, Birmingham and Leicestershire."

The Express, of course, shows its customary thoughtfulness with the headline "War on the Scroungers". It's actually commenting on a report by a think-tank, the IPPR, which has been out for some. And it's not quite what the Express portrays it as. The report says that those who have been unemployed for a year should have to take minimum-wage jobs; but these would be created by the government. And that's an admission that the jobs are not there unless the government creates them. The same IPPR report gets a very different treatment in the Telegraph, which focusses on the prediction that "around 100,000 people over 50 who lost their jobs at the start of Britain's economic crisis are now at risk of being forced to retire earlier than they planned. That will leave them living in retirement with a lower pension than they had hoped for."

It's left to the Guardian to strike a cynical note, with Alex Clark's piece inspired by Emma Harrison's publicity drive on family champions: "Be careful how you preach the benefits of the work ethic". It's a thoughtful critique of Harrison and her admirers, and, as always, the comments posted under the article are well worth reading.

The same can't be said for a piece in the Sheffield Telegraph, which is always sycophantic towards Harrison and A4e. Its article, "It’s not because they don’t want a job - it’s that they haven’t got a clue what to do next", is pure PR, and repeats the stuff she has said in her radio interviews.

I expect this bandwagon to roll on for a while yet.

SIBs and ABS

One of the problems which the Work Programme faced from the outset was that there was to be no, or very little, payment to the providers up front; they would have to stump up the money to finance it until the job outcomes started coming in - if they ever did. It's hugely risky, it excluded all but the biggest companies, and it drove even them into partnerships with other firms. But there's another model on the table, one which A4e's Mark Lovell is keen on. It's called Social Impact Bonds. There's an explanation and diagram here. Investors come in and put the money up to finance the providers' "interventions"; they work on the "target population", and the government repays the investors from the money saved by the success of the "interventions". Sounds reasonable. Certainly the private companies will get paid, and the risk is borne by people who can afford the gamble.

But the effect of this model is even worse than the current system. It further distances the state from those individuals who are seen as problems; they are not part of society, just nuisances who require intervention in their lives, and that intervention is a market in which financiers can invest.

Something else which interests Lovell is the Alternative Business Structure (ABS) for legal firms. It will come into operation this year, and allows any "fit and proper" person or company to own a legal services firm. It's been called "Tesco law" because supermarkets will be able provide legal services. There are lots of safeguards but it opens the sytem up to competition. And of course A4e is interested! They got into the Community Legal Advice business by partnering with an established legal firm, but if they can set up their own ABS a whole new market opens up. Lovell says that his focus is on what it could do for people on benefits and low incomes.