Emma's tax; and Grayling's annoyance

Emma Harrison, A4's former chairman, seems to have become a classic example of the rich avoiding tax, at least according to Channel 4 News.  They point out that there was a lag between the introduction of the 50p tax rate and it coming into force, and this enabled Harrison and others to receive huge dividend payouts at the lower rate.  There's confusion in the article about how much that payout was; at one point they talk about £7m and at another £8.5m.  But they reckon that "because of the way dividend income is tax, this saved Emma Harrison £803,000 in tax on her share."  It was legitimate, of course.  The article is meant to show how any calculations about the take from the 50p rate are flawed.

Chris Grayling appeared in front of the Work and Pensions Select Committee yesterday.  The only account I can find is that on the BBC news site, and that may be the reason that it focusses on Grayling's annoyance with the BBC for what he perceives as its lazy reporting of the Work Experience fiasco.  "I think the Guardian newspaper got things wrong, but the BBC had more of a duty to get things right and I don't think it made an effort to do so. At the end of the day all of this created a situation where we could have lost something that was making a real difference to young people and I think that was reprehensible."  He particularly hated the use of the word "workfare" because, according to him, it isn't.  But he did acknowledge that the Work Programme will not work as well as they had hoped. "The hard reality is we won't get everyone into work. We won't be able to do something for everyone. We have to be realistic. Some people will be disappointed."

Select Committee Enquiry - a summary of submissions

We reported a while ago the submission that A4e made to the Work & Pensions Select Committee's enquiry into the "management and administration of contracted employment programmes". There are now links to all the submissions on the House of Commons website; and they are helpfully summarised on the Indus Delta site. There are some very interesting points from providers, representative bodies and the DWP. The Public and Commercial Services Union make powerful points which are treated rather patronisingly in this summary, and it's worth reading their submission in full. The union's stance is summed up in "PCS believes that it is wrong to allow private sector contractors to profit from the unemployed." But they are a lone voice in this welter of opinions.

Two Memoranda

Two memoranda submitted by A4e to the Work and Pensions Select Committee make interesting reading.

One, EP 07, is the formal response to the inquiry into "the management and administration of contracted employment programmes." It's a long document, responding to the cases of fraudulently claimed job outcomes in Hull. A4e says that it has introduced a procedure whereby 50% of all claims are routinely checked by an independent team which phones the employer to verify that the client is working there, and can check with the Jobcentre that the client is off benefit. Para 3.11 states "A4e encourages whistleblowing as it serves as another important mechanism for identifying fraud. A4e has strengthened its whistleblowing procedures to encourage other staff members to disclose concerns about malpractice. A4e also believe that an independent body acting as an Ombudsman for the industry may be an effective way of regaining a sense of openness and accountability in the industry. As more responsibility for delivering the government's targets for employment is vested in the industry, the market needs to respond by placing an increased emphasis on transparency and accountability." The new admin systems for FND make fraud harder. All sensible stuff.

The second, CP 02, is on the subject of child poverty, submitted in May this year. It's a shorter document, summarised as:

§ A4e supports the Government's 2020 vision for eradicating child poverty;

§ A holistic approach should be adopted in the consideration of issues relating to children that considers educational and emotional, as well as economic, dimensions of child well-being;

§ The proposed 'building blocks' that make up the Government's 2020 vision should not be allowed to develop as silos since the issues they address are related;

§ The welfare-to-work and childcare agendas need to be more closely co-ordinated;

§ The system of benefits and tax credits should be less complex and easier to use;

§ Local government should take the lead on reducing child poverty, but fresh approaches to funding, commissioning and delivery are needed.

This sounds eminently reasonable. But in discussing "A Leadership Role for Local Authorities" A4e's ambition becomes clear. Para 17 says, "A4e believes that far-reaching improvements and efficiencies could be achieved by pooling existing pots of funding under a single overarching contract. Services aiming to reduce child poverty could be combined with worklessness and recession-beating initiatives to create a larger fund. Major national and international providers in the welfare to work and wider public service industry markets experienced in frontline delivery would then be able to compete for contracts and use their expertise for the benefit of local communities. Service and cost efficiencies could be more easily achieved. Combining projects would eliminate duplication and reduce the commissioning and contract management burden on the local authority." Guess who's best placed to deliver such contracts. Well, para 19 gives a clue, describing A4e's "Advice 4 Stoke service on behalf of Stoke-on-Trent City Council, which has been independently confirmed to have a substantial positive impact on reducing poverty."

Nothing seems to have come of this inquiry yet.

Inquiry into contracted employment programmes

Parliament's Work and Pensions Select Committee has announced an inquiry into "Management and administration of contracted employment programmes" and has invited submissions. They seem to be asking the right questions, obviously prompted by recent revelations.

• Are there sufficient safeguards in place to prevent providers from making fraudulent claims for outcomes they have not achieved?

• Is there sufficient protection for employees who raise concerns about their employers’ delivery of a contracted employment programme?

• Does DWP’s contract management approach ensure the quality of service received by customers is commensurate with the level required under the contract terms?

• Do DWP and the National Audit Office effectively monitor the accuracy of providers’ management information systems, provider performance against targets, and the evidence on which provider payments are claimed?

• How has the centralisation of contract management in DWP impacted upon the role of Jobcentre Plus and both provider and customer experience of outsourced employment programmes?

• Will the customer charter proposed by DWP ensure that customers, Jobcentre Plus and contractors know what they can expect of employment programmes?

• Will contract management in the prime contractor model be transparent and effective in monitoring quality throughout the supply chain, and in maintaining a role for sub-contractors?

If anyone wants to make a submission - and I just might - they should read the guidelines carefully.