Updates

The DWP has published the "framework specification" for the Work Programme bidders. A summary on the Indus Delta site is somewhat opaque, but we learn that contracts will be between £10m and £50m in value. The DWP says that "the £20m turnover figure is intended to give potential bidders a steer regarding the size of organisation they believe is required to manage within a more challenging, outcome-funded commercial arrangement than they have hitherto employed." So the big players will end up in charge, with the smaller companies and "consortia" trying to pick up work by competing with each other for sub-contracts. It's interesting that there are more big players in the market competing with A4e, Serco and the rest. One of them is Peopleserve which already has contracts here. It's a division of Rescare, an American company. Iain Duncan Smith was in America recently, admiring the welfare-to-work system over there. But the one big difference in the US is that welfare benefits are time-limited. No doubt he sees that as the next step here too.

One of A4e's income streams is from Train to Gain. The Yorkshire Post reports "Dismay as taxpayers save firms £175m on training" That £175m is just in Yorkshire and the Humber. "Already £200m has been cut from this year's budget – which has been slashed to £757m – and diverted into apprenticeships and building projects at colleges. Business Minister John Hayes told MPs recently: 'The problem with Train to Gain is its deadweight cost – a fact that the last administration were unwilling to face up to. The evaluations of Train to Gain suggest that it is used to support all kinds of training that employers would have funded anyway and to accredit skills that already exist.'" So that particular stream is drying up.

We've reported before that A4e advertised for volunteers to mentor their clients. Another advert again seeks people to do a minimum of 3 hours a week for a minimum of 6 months in the London area, to "provide support, information and guidance, helping their mentees to gain confidence and overcome the barriers they face in gaining sustainable employment". I have no idea whether the other providers do this. It seems on the surface a good thing. The mentors can provide one-to-one help whilst themselves receiving training. But if the mentor is successful and the mentee (yes, it is a word) gets a job, the money goes to A4e, and that doesn't seem quite right.

We should always celebrate success, and I'm happy for Peter Whitwell who, according the MyA4e community site, has started his own business with the help of A4e Middlesborough. But "to acquire funding, A4e liaised with the local council (who provide funding through their Local Enterprise Growth Initiative) who agreed to provide Peter funds to purchase tools, and equipment, and cover advertising costs." So while A4e certainly played a role, it was the local council which provided the money. This source of funding is disappearing as councils lose money and the Work Programme replaces all such initiatives, and that is everyone's loss.

Damning verdict on Train to Gain

"A £1.5bn government initiative to improve the skill levels of employees has been heavily criticised by MPs", reports the BBC. "Train to Gain" was launched in 2006, through contracts with private sector companies. It was intended to encourage employers to put their workers through qualifications at NVQ level 2, by paying their wages for the time they spent in training. A4e won the contracts in many areas, and it was clear from the outset that there was a tortuous administration system and unrealistic targets. The Public Accounts Committee blames the Learning and Skills Council, which was responsible for organising the scheme, and says that "Success rates for too many providers had been lower than expected .......... It also said £112m spent on skills advisers was not good value for money." An Ofsted report in 2008 was largely positive but criticised the "brokerage" layer of the contracts. The Chair of the PAC said: "Despite providing work-based training for around 5% of the workforce, the Train to Gain programme has been mismanaged from the outset. In the face of evidence of what was achievable, targets for the first two years were unrealistically ambitious. The number of learners, the level of demand from employers and the capacity of training providers were at first all overestimated. By the third year, demand for training, fuelled by substantially widened eligibility for the programme and by the recession, had increased to the point where the programme could no longer be afforded."

A4e is the "National Lead Provider for Train to Gain" through the A4e Consortium. But the responsibility lies with the LSC and, ultimately, with the government.

Other contracts

• Train to Gain is a government scheme under which employers are encouraged to release members of their staff to take an NVQ Level 2, by paying their wages for the time they spend on the course. A4e won a large number of these contracts in the short term, but created a tortuous administration which hampered the scheme, and the company subsequently lost many of the contracts.
• Recruitment services, particularly in education and the NHS.
• Online business courses for Learndirect.
• OLASS - Prisoner education contracts in four areas of the country. Perhaps A4e saw this as similar to training the unemployed but with less chance of the clients dropping out! Certainly they saw the benefit (to them) of tacking the New Deal stuff onto the education programme. One problem they hit was in staffing; they had to take on existing teaching staff but could not join the teachers' pension scheme, and this meant that staff were worried about a possible reduction in their pensions.
• Money advice Courses on money management are provided to schools. Stoke Council have given A4e a contract to give money advice to council tenants, in a scheme which in July 2009 claimed that "Almost 2,800 residents have been helped to reschedule £9.6 million worth of personal debt and receive over £3.5 million in unclaimed benefits". All this has inspired Emma to go further. She wants to start a bank aimed at the poor. She said recently that she hopes to have three trial branches operating within 18 months. Encouragingly, a partnership with RGMR consultancy has secured a titbit from the Treasury to pilot generic financial advice initiatives.
• A4e were, on 14 January 2009, announced as one of the "partners" in a Money Guidance pilot programme in the North West and North East, along with genuine advice agencies like the CAB and the Consumer Credit Counselling service.
• Social Care As the government pursued the idea of direct payments for social care, A4e was in there, waiting to grab a slice of the cake. By late 2008 it had 12 contracts across the country, including Middlesborough and Somerset.
• CLACs Intentionally or not, the government created another opening for A4e when it sought to reduce the bill for legal aid. Local authorities which used to fund advice charities like CAB now have to put these out to tender, seeking bids from partnerships between solicitors and advice organisations. The first of these was in Gateshead, where the voluntary sector managed to win the contract. But A4e got its act together for the next offering in Leicester, and won the contract. In Hull it was also announced as the preferred bidder, and despite a determined campaign by the CAB the Hull CLAC opened its doors in December 2008. The government has since had to rescue the Hull CAB, and has decided that CLACs are not a good idea.
• Choice Advisors Along with Centra, A4e have the contract for the Choice Advisors Support and Quality Assurance Network, which "supports" people in local authorities who advise parents on school admissions.
• An education business link organisation consortia (EBLOC), which organises work-related learning activities across the four local authority areas of the Tees Valley. This gives A4e a foothold in schools.

It's a Frequently Asked Question - how has A4e managed to insert itself into so many "markets"? With the reputation it has, how does it secure contract after contract? There are two main reasons:

1. When considering bids for a new contracts, government departments are not allowed to take into account the previous records of the bidders. Odd? Yes, and it means that you can bodge one contract but secure the next.
2. Local authorities which feel that they can't, or don't want to, provide a service in-house have to go through rigorous procurement processes. They have to accept the bid which offers "best value", which is not necessarily the cheapest - but if it's not the cheapest they have to have a very good reason, and not liking a particular company isn't good enough.