Everything must go

The government is in a desperate hurry to sell off whatever it can of the remaining shreds of the public sector.  Yesterday it announced the winning bidders for the Transforming Rehabilitation contracts, that hugely dangerous outsourcing of probation services.  As we can see from the Guardian's report on this, two companies get more than half the business.  Sodexo gets six areas, Interserve five; of the rest of the 21 areas, Working Links gets three and Ingeus two.  All have signed up charities to do the work.  Between them they will handle more than half of the probation service work, with supposedly medium and low risk offenders.  Their profits will be on a payment by results basis, albeit under a more complicated system than that of the Work Programme.  G4S and Serco had to withdraw their bids because they are still under investigation for fraud.  A4e, we understand, also withdrew from the process.
It's bad enough that such we have to watch this vital work flogged off for private profit.  Worse is the fact that the companies' profits have been insured against a new government pulling the plug on these contracts.  They are guaranteed their expected profits for 10 years!  So it would be ruinously expensive to cancel them.

We also heard yesterday of the company replacing Atos in the WCA contracts.  It's Maximus, an American company with as dreadful a record in the US as G4S and Serco have here.  For details, look at this piece on the Disability News Service site.  We can't know the financial arrangements that brought Maximus into this, but we should.

We learn from the Guardian that the government is pressing ahead with another disturbing outsourcing scheme; that of child protection services, currently the responsibility of local councils.  A lot of people are not aware that private companies already run children's homes, looking after the most vulnerable children for profit.  Now the government wants to take child protection out of the councils' hands altogether.  It might be thought that, given the stream of news recently of councils' failings in this area, it couldn't be any worse.  But councils are accountable for what they do.  Private companies just want to make a profit.

You will have read today that the government has considered cutting ESA to only pennies above JSA level.  It denies that it's actually going to do it, and the cries of protest will probably stop it this side of an election.

Proud to work?

The DWP Press Office has been infamous for a long time.  It's staffed by civil servants who are supposed to adhere to the Civil Service Code, which says that they should have "integrity, honesty, objectivity and impartiality".  But perhaps they're working under the direction of the DWP's Director of Communications, Richard Caseby, who appears to have no such scruples (he's a former managing editor of the Sun).  Back in January the Press Office put out a press release referring to "welfare hand-outs", a term the Daily Mail obligingly repeated.  Then last week came this:

There was no pretence that this was anything other than straight-forward propaganda.  Objective and impartial it was most certainly not.  But I bet the intern (unpaid?) who gets to do the graphics has fun.

Today they attempted a rather different Twitter campaign, one which the Press Office didn't invent but which has decidedly sinister overtones.  It's called "Proud to Work", and it seems to be the creation of the ERSA, the work programme providers' trade body - but clearly they are all working together with this.  The DWP re-tweeted the highly dubious statement that the "Work Programme will deliver £18bn to economy".  Immediately afterwards came re-tweets of stuff from Interserve, A4e and Working Links (not on this screen capture).

What I find most disturbing about this is the "proud to work" tag.  It's subtle.  It suggests that those who are not working are not proud, have no pride.  It suggests that unemployment is voluntary, the result of lack of self-respect.  Perhaps it suggests other things to you.

Is there anything that can be done about the DWP Press Office?  Not at this stage in the parliament, I think.  There doesn't seem to be any mechanism for opposition MPs to complain about it effectively.  What it proves, however, very clearly, is that this government, and Iain Duncan Smith in particular, work closely with the right-wing press to spread lies and damaging propaganda.  If they win in 2015, it will only get worse.

CWP contractors - the full list

Thanks to a site called TWPSolutions, we have the full list of Community Work Placements providers, after the Financial Times gave us 4 of them.
There are 18 regions.  Of these, G4S have 6; Seetec 5; Pertemps and Interserve 2 each; and Learn Direct, Working Links and Rehab one each.
Did A4e put in a bid?  It would be very unusual if they didn't, and this must be a major blow for them.  All that's left in the pipeline are the Transforming Rehabilitation contracts, and the government wants to get on with them before the election, despite Labour's pleas to postpone the decision.

The evidence won't be published

The Exaro site has just reported that the Public Accounts Committee won't be including the evidence from whistle-blowers when they publish the report into the welfare-to-work programme tomorrow.  You'll remember that the committee heard evidence from several whistle blowers in May.  One of them, Eddie Hutchinson, had his evidence leaked, and pretty damning it was.  But the PAC wanted to publish the rest of it and won't now because the people concerned have made last-minute requests to block it.  This was the evidence about A4e and Working Links.  It's a pity, but it shows the fear felt by people who go public in this industry.
We'll have a good look at the report when it comes out.

PR or results?

A4e has been on a PR offensive, described on its website.  They have invited local MPs into their offices to show them "the real work that goes on behind the headlines".  Six have so far taken up the offer.  Niki Freeman, who is described as Local Business Leader for A4e, is quoted as saying: "Some of the comments that have been made against A4e have been incredibly frustrating and hurtful for my staff and the many partners we work with, who, day in, day out, have simply been doing their jobs."  I sympathise with that.  But the piece goes on: "Over the last year, A4e has been working hard to establish an excellent team of professional staff with a range of specialist skills to support individuals across the UK. The Work Programme’s ‘black box’ approach gives service providers the freedom to create innovative ways of working, allowing A4e to tailor its service to individuals."  This is where many clients would take issue with the company.  The reactions of three of the MPs are quoted.  Two of them, Helen Wheeler of South Derbyshire and John Stevenson of Carlisle, are Conservatives and effusive.  The third, Labour's Vernon Coaker, is more guarded.  But no doubt all of them were happy to be quoted.

It makes sense to get MPs on side.  But on the Work Programme A4e, like all the other providers, will be judged on results.  After the leaked document showing very poor results, and Private Eye's publication of the letter showing that Working Links is in the same position, the Telegraph now has an email to Ingeus staff from its director Jack Sawyer.  He says that the firm is not meeting its "contractual minimums" and its performance is not good enough.  Chris Grayling's reaction is simple.  It's all getting better and anyway, "any providers which were failing to deliver could see more unemployed people referred to other welfare to work companies under the programme."  He doesn't say what will happen if they're all doing equally badly.  

Waiting

Some people think that outsourcing has taken a bit of a knock lately.  The G4S fiasco showed how risky it can be, and the bad publicity surrounding A4e has done the whole business no good.  But none of it has slowed the pace of outsourcing, and ideologues of the right want to see everything hived off to the private sector.  Some local councils have already done this, knowing that they have no fall-back position if it goes wrong because they have sacked all their council employees.  The same handful of companies are scooping up all the work and the profits.  All that the government's much-vaunted Payment By Results has brought about is the even deeper involvement of the huge financial companies such as Deloitte and the shoving aside of the smaller organisations.  Big money rules.  And why would politicians want to change that?  

Working Links is having a bad time (see Private Eye) and warning staff that because they are not delivering the expected results for the Work Programme they could be in serious financial trouble.  One curious aspect of this is that the boss, Brian Bell, said that, "In some locations we are struggling to fill the vacancies we are finding."  Does that mean that employers won't consider people who are on the WP, i.e. have been out of work for a long time?  A4e's Andrew Dutton warned of that some time ago.  And the leaked document showing A4e's outcomes confirmed how bad the situation was.  But the official figures contradict that.  If the companies do fail, as the Eye points out, there is no fall-back position because there is no public sector involvement in the WP, so we could be looking at a bail-out for those companies.  That could include A4e.  But I suspect that some face-saving formula will be found to obscure the truth.  Anyway, A4e doesn't depend entirely on the WP.  

We're waiting for something to happen on the Slough A4e arrests.  The last we heard was back in May, when an eighth person was arrested on suspicion of conspiracy to commit fraud.  I know the legal system can grind slowly, but it's time we knew whether the case is going to trial.  

They want more sanctions!

A fascinating piece in the Observer reports that "Private firms on payment-by-result contracts have suggested more punishments should have been meted out".  In 2009, 139,000 people had their incomes stopped.  By 2011 it was more than 500,000.  And yet Corporate Watch has documents which show that the companies want more.  In the first 8 months of the Work Programme, jobcentres stopped benefits for 40,000 people, but that was only about a third of the 110,000 that were referred to them.  The rate, however, is going up.  The document shows that Working Links refers the most cases, but A4e is second.  It requested sanctions in 10,120 cases.  3,000 of these were accepted by the jobcentres.  
The procedure in A4e's case, I'm told, is that offices send the cases of non-compliance through to a central office, along with the reasons for this non-compliance (didn't turn up but was in hospital, that kind of thing); that office then refers them for sanctions.  But regularly the explanations get left off, so people find their income has been stopped when they've been told that wouldn't happen.
The article goes on: Richard Whittell from Corporate Watch said the Work Programme appeared to be focused on slashing benefit rather than putting people into work. "These figures give the lie to the government's claims its welfare reforms are about helping people into work," he said.   " By the time it's finished, more people will have been sanctioned by the Work Programme than properly employed through it. Every month thousands of people are having their only source of income stopped and being pushed into hardship. Companies like Serco, Working Links and G4S may not be very good at finding people suitable work, but they're dab hands at punishing them." The private firms say they make their referrals to job centres in line with government guidelines.
Chris Grayling is quoted as saying that "there was no financial imperative for private firms to punish jobseekers".  So why are they doing it?  Is it the case that increasing numbers of people are refusing to comply with the terms of the WP?  Or is there some other reason?

The secret evidence disclosed

Thanks to the Telegraph, we now know some of what Matthew Hancock MP and his Tory colleagues wanted to keep private at the Public Accounts Committee meeting yesterday.  The whistle blower is Eddie Hutchinson, an accountant who was appointed head of internal audit at A4e in 2010.  The paper has put the whole of his evidence online here.
Hutchinson had previously worked for Working Links, where he uncovered a level of fraud which he described as "farcical" and which was ignored by management.  As later with A4e, he said that the bonus system was to blame.  Hutchinson was made redundant by Working Links and then went to work for A4e.  He found a similar situation there.  By February 2011 he was dealing with the Slough case, which, he said, should have been referred to the police earlier.  "He claimed he also became aware of a fraud on the New Deal for Disabled People contract from A4e’s Glasgow office. In this case, he said, an employee resigned, saying she had falsified evidence and misappropriated cash. At the time, he made a note it was a 'regular occurrence' that no action was taken against people admitting to fraud."  There were numerous other cases in different contracts.  He was supposed to be helping A4e to develop watertight risk controls, but noticed no "significant enhancements".  His advice was not heeded.  "After seven months at A4e, Mr Hutchinson said in evidence that he was convinced he had seen 'unethical behaviour, mismanagement, inadequate corporate governance, and risk management, and excessive payments in the form of salaries and bonuses'. He has told MPs: 'In my professional view, it was systemic.'"  A4e denies this, of course.  It's all in the past.
Surely this sort of evidence can't be brushed under the carpet.


The Exaro website has published the 2009 internal A4e report.  It can be downloaded from the site here (you will have to register with the site).   We'll be examining that soon.

Fraud at A4e and Working Links ignored

The Guardian has revealed what is going to be told to the Public Accounts Committe tomorrow (Tuesday).  Both A4e and Working Links employed investigators to look into financial discrepancies, and then refused to hold formal enquiries.  "A senior figure in A4e's risk and audit department in 2011, claims there was evidence of fraudulent activity in many of the firm's offices.  He says that, in two of A4e's offices, staff were caught with company stamps that could be used on paperwork to claim public money for placing people in jobs. Despite a formal investigation, A4e took no action, the witness claims."  A4e has responded by saying that "the stamps were only used with the employers' full knowledge and consent, and that a stamp alone could not be used to validate claims."  I'd like to know the details of that.  But A4e is not going to be invited to the meeting to give evidence themselves, and they are very cross about that.  "Wherever we have been given facts to support any previous allegations, we have looked into them and we have not found a single allegation of fraud that stands up."  Can we mention their own 2009 internal report?

And yet more contracts

Thanks to the Richmond upon Thames Liberal Democrats for this story.  Richmond upon Thames council, like a lot of other local authorities, funded the Council for Voluntary Service (CVS) to support and train people in small, local voluntary organisations and charities.  The CVS branches usually consist of paid professionals helped by volunteers.  They are probably not experienced in drawing up bids for contracts to do the work.  So when Richmond Council, led by Conservative peer Lord True, decided to put the work out to contract for £85,000 the CVS lost - to the Foundation for Social Improvement (FSI).  Not A4e - or not quite.  The FSI is the creation of Emma Harrison and has received £1m from A4e.  Harrison is Chair of the Trustees (although the piece on the website about her doesn't mention A4e) and two other A4e directors, Jo Blundell and Andrew Dutton, are also trustees.  It's a registered charity, and it was originally about helping small charities to raise funds.  Now it is obviously using the bid-writing skills of A4e; it is based at A4e's Westminster offices, so it would be silly not to.  As Lib Dem leader on the council, Stephen Knight, says: "It beggars belief that Richmond council is intent on handing a contract to the A4e group of organisations, while the government and police are investigating evidence of widespread fraud and mismanagement. Local residents will be shocked that the Tories are intent of pulling funding from the local Council for Voluntary Service and instead handing a contract to a scandal-hit organisation based in Westminster."

There's an interesting piece on the Morning Star website (scroll down) headed "A4E isn't always terrible. Sometimes it is just mediocre."  A4e was hired to train 30,000 childminders in 2004, and the writer has got hold of an evaluation of the contract carried out by consultants PriceWaterhouseCoopers.  It's not good.  In fact, it's pretty grim.

Most of the newspapers have reported the story we took from Exaro yesterday about A4e being the preferred bidder for another contract, to run the Equalities and Human Rights Commission's helpline.  The Daily Mail takes the opportunity to re-run its previous graphics on A4e, but also quotes Margaret Hodge as saying: "This belies common sense.  There are so many question marks about this company’s competence and integrity that I can’t believe any government department is thinking of signing another contract with them.  The Home Office should hold off from making any decision until the investigations have been completed."


PS.  I read the latest Private Eye after posting the first paragraph above.  They have the story; but they also show that A4e used the FSI to help win the Work Programme contracts - the "bid candy" which the charities claim they became for the prime providers.  The Eye has also set its sights on another prime, Working Links, recalling a leaked "compliance visit" report last year which showed that Working Links in Liverpool had made 85 claims for outcomes which it was not entitled to. 

More contract opportunities

There's not a lot happening at the moment, at least publicly. A4e continues to scatter PR material around the internet, inclusing success stories. But, as usual, they don't bother to have these pieces proof-read, leading to amateurish efforts like this one. A piece about a youth summit in the North West had a new description of the boss of A4e - "BBC 1’s Emma Harrison".

Lost in all the furore about News International was the announcement by David Cameron of the privatisation of public services. The full paper is here. The Public Finance website has a report of his speech, and it's clear that the Work programme is being treated as the model for all the flogging-off of services. It's to be payment by results all the way. The latest announcement, which no doubt will interest A4e, is that key probation services are to be put out to tender (see the piece in the Guardian). Working Links has already said that it will be bidding. Mark Lovell was in talks with the Ministry of Justice yesterday.

Nice Work for Some

Private Eye has been scrutinising some of the outsourcing companies again. It notes that Working Links, which got three Work Programme contracts, has been caught over-claiming job outcomes in Merseyside. The company claimed for 85 recent job starts which people had secured before any intervention by Working Links.

But the Eye is even more interested in the finances of A4e. Three of its directors are paid through schemes which are common enough for the highly paid but not available to the rest of us. "In the last two years international director Roy Newey has been paid £662,000 through a company called Roy Newey Ltd," says the article, and two non-executive directors had similar arrangements. It goes on: "Newey paid himself NIC-free dividends totalling £326,000".

A4e paid Emma Harrison and her husband's conference management company Andromeda Park Ltd £462,000 last year, another of the couple's companies, Thornbridge Ltd, £627,000 for the lease of a building, and £81,000 rent on a property owned by the couple's pension scheme. And that was before profits after tax for A4e of £6.2m." A4e is definitely improving some people's lives!

ERSS Framework

The DWP has issued the list or organisations that have been selected as preferred suppliers for the Employment Related Support Services Framework. There are 11 "lots" or different areas of the country, and A4e is included in 7 of them. But there are between 9 and 17 organisations selected in each area. You can find the full list here. There's a useful description of what it all means on the Navca site. The DWP says that, "The Work Programme will be the first contract to be called off the Framework and the procurement exercise for this will commence shortly." It looks very much like contracts have been shared out amongst the main established companies; Serco, JHP, Working Links, Seetec and Reed all have 7, and Avanta has 6.

Response to a complaint

There were some who felt that the "Famous, Rich and Jobless" programme gave some very helpful free publicity to Emma Harrison and A4e. At least one person made a formal complaint to the BBC about it, and has passed on the interesting response he got:

"I understand that you have concerns regarding what you believe was one particular company being promoted.
We've discussed your concerns with the production team who've confirmed that the programme didn't make reference to A4e in this series at all. We describe Emma as founder of UK's biggest independent employment provider. She is an expert in her field, with direct, first hand experience dealing unemployed people, understanding them and helping them along their way. Her contribution to the programme has nothing to do with A4e and we don't feel the company was promoted in any way. We did film a scene in an A4e office in Wolverhampton, though we did not tell the audience that is was A4e, or suggest it was Emma's company. I hope this addresses your concerns."

(I'm assured that the errors in this were in the original.)

It's true, of course, that the company wasn't mentioned in the programme itself, and they were careful that there was no identification of A4e in the Wolverhampton office shots. But this is disingenuous. All the previews in the press mentioned A4e; they could hardly avoid it. And was it pure coincidence that the day before the first programme went out, Mrs Harrison was a guest on the BBC's "Working Lunch"? Perhaps it was, since in the BBC the right hand often doesn't know what the left hand is doing. But there you have it.

Don't mention New Deal - again

Unemployment has fallen. But there's more evidence of the perceived irrelevance of New Deal, FND etc. Long-term unemployment has actually risen in some areas, and there has also been a significant rise in some places in those who are "economically inactive", i.e. not working or claiming benefit. On Monday a group called the Centre for Cities published a report looking at the varying fortunes of British cities in the recession. It has copious statistics on unemployment and on the skill levels in different areas. The cities with the largest increase in people claiming JSA are Swindon, Grimsby and Hull. Those with the highest youth unemployment are Birmingham, Grimsby and Hull. Those with the lowest percentage of high skills are Grimsby, Ipswich and Hull. (Poor old Hull and Grimsby, where unemployment has continued to rise.) The report sees the solution in a changed organisation of local government to attract business, and in funding FE colleges to provide skills training. This in part echoes the government's own recent report, "Building Britain's Recovery", which recognised the need for skills and qualifications if unemployed people are to find work. But, unlike the Centre for Cities report, the DWP can only think in terms of a one-size-fits-all approach.

BBC's PM Programme on Tuesday was talking to NEETs. There are almost a million NEETs, the majority of them male. The lads the programme is following have been unemployed for upwards of 6 months, and are doing everything they can to find work. There was no mention of any training programme, but perhaps they had not been out of work long enough. PM is going to follow these lads, so it will be interesting to see what happens to them. However, BBC2's "Working Lunch" today reported on a "scheme" to help the unemployed in Sheffield, run by Working Links (yes, that surprised me, too). This was undoubtedly FND, but the words "New Deal" were not uttered. The impression was given that this was a local scheme, and if mention was made of its national coverage, I missed it. We were not told how FND is financed and run. The emphasis was indeed on skills training, but it was very much the sort of training we saw under the old contracts. A woman was enthusing over the one-day courses such as Basic Food Hygiene which may well improve her CV but are unlikely to get her a job. We were told about SIA and construction training - worthy but not applicable to many unemployed people. The item was too short to be informative.

FND may well be doing some good in some places. But clearly what is needed now is proper, wide-ranging skills training, with qualifications to suit the capabilities of the job-seekers as well as the needs of employers. A lot of money and effort is being put in by councils and voluntary groups. If private companies can help, fine. But they should be under the direction of JCP on a regional basis; in other words, we should revert to what happened before the system was privatised.

"Joined Up Moving Up"

A4e's news page reports: "The Welfare to Work Panel’s report 'Joined Up Moving Up' was launched today at a well attended and successful event in Central Westminster Hall. The Welfare to Work Panel’s report 'Joined Up Moving Up' was launched today at a well attended and successful event in Central Westminster Hall. Employment Minister Jim Knight spoke alongside panel chair Keith Faulkner from Working Links, Rob Murdoch from A4e, Chris Ledgard from Collinson Grant and CBI Director of Public Services Susan Anderson."

This panel was formed by the CBI, so you would expect that it would lean towards private business interests. Its Chair, Keith Faulkner, is also Chairman of Working Links (Employment) Ltd, one of A4e's competitors. Selections from the contributions at the launch can be watched here. A4e's Rob Murdoch talks about independent providers bringing "fantastic innovation", a personalised service and reduced expenditure on benefits. We need to capture that innovation, and develop more dynamic services to get people into work. The role of prime contractors is to ensure that all the services in an area are meeting the needs of the customer. The "supply chain" must be healthy and thriving to provide the best services. There was also a heavy hint about A4e's ambition to provide a more holistic service, one which can have an input into many aspects of the life of an individual or family - the super-contracts which they advocated to the DWP. Murdoch said that welfare reform cuts across all departments because it impacts on all fronts. Customers have a multitude of barriers, and they want to work with customers on all barriers to provide a more coherent service.

ESF Phase 2 - nothing for A4e

The announcement of the successful bidders for ESF phase 2 has been made. (For some background on the European Social Fund see this website.)

Now, when the PQQ stage shortlist was announced, A4e had succeeded in 8 of the 12 areas in making the shortlist. But they haven't won a single contract. The biggest winner is Seetec, with 4 areas. Ingeus and Intraining each have 2, and ESG, Reed and Working Links have one each (Cornwall is still to be decided).

Interesting.

The Rumour Mill

If you missed the first episode of Benefit Busters you can watch it via Channel 4's website. If you missed the second episode - tough. It was, apparently, briefly available but has now been withdrawn. This has, of course, fuelled suspicions in some quarters that A4e has insisted on it being pulled. Or was it the DWP? Or possibly someone who was filmed for the programme and who now objects to how he / she was portrayed? Channel 4 are not saying. And the Daily Express is not allowing comments on the brief piece about the programme on is website.

The rumour mill keeps grinding away on the idea that the FND contracts could be cancelled, or at least that one prime contractor could find itself without a contract. It seems that the contracts have not yet been signed, perhaps because negotiations are still going on. But the contracts have been awarded. And a crucial part of FND is that clients have a choice of providers. This means that in all areas contractors and subcontractors have been spending money on setting up facilities and staff. In Hull, for instance, Working Links have had to rent space for the first time. If the contracts were pulled at this stage, would they not be entitled to compensation for this expenditure? Perhaps that's another reason for the Conservatives' reluctance to spell out what they would do. This element of choice in FND also raises the question of what happens when clients all insist on avoiding a particular provider. Benefit Busters has stirred up a hornets' nest, and the DWP should get its act together and respond.