They've got away with it

It must be congratulations all round at the DWP.  The Work Programme results are terrible but hardly anyone has noticed, because the raw numbers are impressively big, and a week of spinning has convinced the largely gullible media that failure is actually success.  Well done, chaps.
But these are the figures (in percentages):

Why are there no headlines this time around about "its worse than doing nothing", as indeed it is for more than half the providers?  Leaving ESA aside for the moment, the minimum contracted figures - what the providers contracted to deliver - were only a tiny amount above the dead weight figure - what the DWP assumed would happen with no intervention at all, which means no money spent.  But half the companies couldn't even deliver that.  For JSA 18-24 the wooden spoon goes to A4e in South Yorkshire, which managed just 15.5%.  Yet Mark Hoban says, "The improvement in performance over the past year has been profound and the scheme is getting better and better."
The failure with ESA is inescapable, and some publications, like the Independent, choose to headline that.  But it's been spun for a week that this is down to lack of "resources", i.e. those on ESA need more money spent on them than the programme provides.  The excuses are somewhat tortured.  An outfit calling itself Inclusion (it describes itself as a "cutting-edge thought leader" but doesn't say where its funding comes from) wants to move the goalposts and take the economy into account.  It recognises that poor performance means less income so even poorer performance.  Another think-tank, the Social Market Foundation (equally cagey about where its funding comes from) says, confusingly, "Poor performance against the DWP's minimum levels cannot be taken as evidence that providers are doing a bad job or that the scheme offers poor value for money," because we don't know how a different approach would have fared.  The ERSA, the mouthpiece for the providers, declares that the government's way of measuring performance is wrong and that the targets should take the state of the economy into account.
The Financial Times tells us that "several providers have been put on watch for having their contract terminated."  12 contracts, they say, have been put under a "performance improvement notice".  But I would be very surprised if any providers do actually lose contracts.  In another piece the FT points out that the WP is "cheap and it isn't working".  The bidding process meant that companies said they could do it "at a lower cost than was probably wise", and so the profits aren't coming in which would enable them to spend enough to be successful.  It's that negative spiral which those actually experiencing the WP know only too well.  The article concludes with the opinion that Osborne is shifting money from the WP to the jobcentres.  Yet JCP has suffered big staff cuts recently.
In real business, as opposed to outsourcing, contracts have a legal reality.  They come with penalty clauses, punishing the contractor for failure to deliver.  In this business, the companies know that the minimum contractual requirements mean little or nothing.  The likes of A4e are used to missing their targets and still making loads of money.  The government has an interest in pretending that failure is, in fact, success.  When the model is payment by results (but not really) the contractors make less money; but the casualties are not the businesses but the people who have not received the service.
It is nonsense to blame the economic situation.  If the number of unemployed people who can get back into work depends on the state of the economy (and it probably does) then what is the point of a scheme like the Work Programme?  The companies are adding little or nothing to what would be happening anyway.
However, it appears that Iain Duncan Smith has got away with it.

Give them more money

You may remember that when Channel 4 News revealed A4e's current performance figures last Thursday, they rolled out Ian Mulheirn to say what he thought of them.  It didn't matter at the time who Ian Mulheirn is, but he pops up again today in the Guardian to give his take on what's wrong with the Work Programme.  It's a bizarre analysis, which concludes that providers should get more money and have less expected of them.  So who is this man who gets a newspaper article to air his views?


Mulheirn runs something called the Social Market Foundation - a think tank.  It proclaims itself to be "a leading cross-party think tank, developing innovative ideas across a broad range of economic and social policy.  We champion policy ideas which marry markets with social justice and take a pro-market rather than free-market approach. Our work is characterised by the belief that governments have an important role to play in correcting market failures and setting the framework within which markets can operate in a way that benefits individuals and society as a whole."  Which sounds nice and cuddly.  But with think tanks one should always follow the money.  Where does their funding come from?  They show it on their website.  The money comes from a variety of sources, but nearly half of it comes from private business, including Avanta and G4S.  


Mulheirn believes that the reason for the apparent failure of the WP is the state of the economy. The minimum performance targets are based on forecasts of growth done in 2010, but these have proved way too optimistic.  The providers can't control the labour market.  The solution, then, is to:
i) "tone down the proportion of payments made for achieving job outcomes. In the depths of recession, the priority must be to make sure jobseekers get the help they need. For that they need the money to provide it."
ii) "Second, it (the government) should reassess its expectations of what's achievable in a recession, and formally link minimum performance levels to the latest OBR forecast."  And
iii)  "the government should look at re-engineering the Work Programme so that a large proportion of the payment to providers is based on their performance compared with those of other providers, rather than judging them on inflexible targets and crucifying them when the economy falters."

 Mulheirn seems to want a return to something like the on-programme payments of privatised New Deal and FND.  That certainly created big profits for the companies but the outcomes were half what they forecast.  The money did not go into providing the support or skills training that clients needed.  There is no reason to suppose that it would be any different this time.  And how would revising down the performance targets help?  If the current 5.5% minimum was reduced to, say, 3.5% what is the point of the Work Programme at all?  You are just shovelling money into private companies which could be used to create real jobs.  As for comparing providers' performance with each other rather than with an objective standard; they have always performed similarly badly.  They would go on comfortably doing so.


The comments which follow the Guardian article are mostly very sensible.  What a pity that we can't engage Mulheirn in real debate.

Success and failure

A Yorkshire publication, the Yorkshire Business Insider, reports that A4e's Emma Harrison is one of only ten women on its list of the 100 top working millionaires in the region. Hardly a surprise.

But there are more rumblings of discontent from the voluntary and other organisations which signed up to be sub-contractors in the Work Programme. Or haven't yet signed up, in some cases, where promised contracts have yet to be signed. Housing Associations were among the organisations which fell for the idea that they could earn money from the WP (although their tenants might think it was none of their business) but they are now finding that they are getting no referrals. An angry article on the Guardian's website reports that, "One housing association, Harvest Housing, was hoping for a small amount of work from A4E. But guess what? They got nothing and have chosen a different path." The writer, John Little, is less than complimentary about Emma Harrison and A4e. Patrick Butler, a regular Guardian columnist, writes on two reports by the voluntary sector and asks, "What is going wrong? Some primes claim they haven't been referred any "hard-to-reach" clients by jobcentres. It is said high numbers of appeals against work capability assessment tests have blocked the flow of these clients into the system. Others believe primes, overwhelmed by higher than expected numbers of jobless clients coming on to the books, are simply 'parking' vulnerable jobseekers and focusing solely on clients who are 'job ready' and easy to place." Butler cites the Social Market Foundation's concerns, back in August, that the WP was "at risk of financial collapse" and suggests that the most vulnerable are being pushed to the back of the queue.

Questions and doubts

The papers are mostly cynical this morning about Emma Harrison's scheme, going with the "gimmick" line. The Yorkshire Post reports this but is slightly confused, saying that the initiative "will be" piloted in Hull, Blackpool and Westminster (it's already up an running in at least two of those areas). They have a quote from Harrison: “The thought scares a lot of politicians [who are asked to take part] because they don’t know how to do it but I have said ‘I’ll show you once and for all how this is done’. And they are very enthusiastic.” But the headline on the article is "Middle class in Hull urged to ‘adopt’ a jobless family". The only person from the Hull City Council they could find to comment was the deputy leader of the Lib Dems, who "cautiously" welcomed the initiative.

The next time anyone interviews Emma Harrison there are three questions I would like them to ask her:

1. Has A4e bid for the contracts the DWP is putting out, to use European Social Fund money to pay private companies to run the same scheme that you're promoting? Are you trying to pre-empt these contracts by getting your scheme up and running first?
2. You have argued in the past for "super-contracts" in which a private company would run all the services in a local authority area. Is this scheme a step on the way to that?
3. Given your company's record of missing targets by some distance in previous welfare-to-work contracts, why do you believe you will be any more successful with this?

There's a report out today by the Social Market Foundation, claiming that the Work Programme is at risk of financial collapse. They use the performance of the providers in Flexible New Deal to forecast that the DWP's expectations for the WP are over-optimistic. If the providers can't meet the minimum targets they will lose the contracts. They seem to be arguing for a better deal for the providers. But in an interview on the Today programme this morning Chris Grayling claimed that the WP was different from FND because providers have much greater freedom "to do what works". (This is disingenuous. They had the freedom under FND, and indeed under New Deal, to pay for such things as skills training.) Grayling said that the providers knew what they were doing when they bid for the contracts, and that there will be no re-negotiation. One interesting point was his statement that the minimum performance standard must be greater than the "dead weight" figure, those who would be expected to get jobs without any input from contractors.