A4e pulls out of another prison contract

One of our commenters broke the news yesterday, but now we have confirmation and the details in the Guardian.  A4e has pulled out early from a £17m contract to provide prison education (OLASS) in 12 London prisons.  The contract had almost two more years to run, so we can assume that pulling out has cost the company dear.  But it claims that it couldn't run the contract at a profit.  Without any more details from the company, there is speculation that the reason is that overcrowding and under-staffing in prisons is resulting in prisoners being unable to attend classes, and this impacts on the private companies which are paid according to the number of classes they run.  To add to A4e's embarrassment, the contract was initially delayed by the extended audit of its activities which followed fraud allegations.  And, as the Guardian points out and as we reported at the time, it's not the first time A4e has done this.  In 2008 it pulled out of 8 OLASS contracts in Kent prisons because it was making huge losses.  It had then severely underestimated the costs of providing a pension scheme for the professional teachers it took over from the previous providers.  Presumably it factored all that in to the London bid.
Maybe it's an indication that A4e now can't withstand the losses it might once have absorbed.  It adds to the sense that this is a company in trouble.

Weekend round-up

A4e was at all the party conferences this year, as usual.  They don't record what interest they drummed up amongst the Lib Dems or Labour, but describe on their website the "event" they hosted in Manchester for the Tories.  They've had to amend the story in the last couple of days - it was "former minister" Mark Hoban who led the praise for 6 A4e "customers" (I do hate that word) who have found jobs through the WP.  Apparently 40 people turned up.  Now, as I've always said, I'm happy for anybody who gets work, with or without the help of A4e.  But it seems slightly over-optimistic for A4e to be lobbying just at the point when they've lost market share for getting poor results.

There was a little-noticed piece on the BBC website yesterday about the poor quality of prison education.  Ofsted has been very critical about current standards, and it's pointed out that prison education and training is outsourced to private companies.  No companies are named, but A4e has several contracts.

BBC Radio 4's "The Report" programme last night looked at the state of Universal Credit.  There was nothing which hadn't already been in the press, but the programme pulled it all together to show how the project went off the rails.  Around £200m has been completely wasted, there are no effective financial controls, and there is no chance that it will come in "on time and on budget", as IDS insists it will.  UC is being rolled out to 6 more jobcentres, but it's still limited to new claims by single people with no dependants, on JSA only and with no complications.  It was pointed out that you can't do a change of circumstances, or even sign off, online.  You have to phone an 0845 number, at your own expense.  The whole thing is supposed to be completed by 2017, but as the reporter said, whether IDS would still be in post by then is doubtful.

That dismal excuse for a newspaper, the Express, gleefully reported a survey which purports to show that a majority of people think that benefits claimants "should find a job or work harder".  Surprisingly, a lot of the comments under the article are not supportive of the Express's stance.  For the actual figures, read a better article on a website here.  But all such polls are suspect.  We don't know the sample size, but we do know that sampling methods tend to exclude the poorest people, and that would certainly skew the results here.  Of course, the government is jubilant, and Labour is flummoxed about how to respond.

Prison contract delays - and Oxford

There's a rather confusing piece in the Guardian today headlined "A4e prison contracts delayed by anti-fraud checks".  It's confusing because it's not news.  The contracts for prison education which were due to start in August were delayed for three months because the Skills Funding Agency wanted extra fraud checks, following all the accusations earlier this year.  The checks didn't find any fraud, and the new contracts will start on 1 November.

An interesting campaign has been going on in Oxfordshire, where David Cameron has his constituency.  The Oxford Mail teamed up with A4e on a "We want to work" campaign, trying to get 12 of their clients into work.  (The article which launched the campaign was written by one Emma Harrison, but presumably not that one.)  Another article on the same day listed the twelve and showcased two of them.  And yet another article is a straightforward advert for A4e.  We're told (ungrammatically) that "Last year, A4e helped 30,126 people into work in the UK, 10,695 people gain a qualification and worked with 13,523 employers."

The following day things became a little less clear.  There's advice on "gaining an edge" from a woman who runs a free job club in Oxford as well as advice on CVs from an A4e adviser.  By Friday local MPs are brought in to say how wonderful the campaign is, and two more jobseekers are showcased.  One has been through an A4e "All about care" course.  And by Saturday there is good news.  One of the 12, who hadn't yet been featured, has got a job.  Another has an interview with an employer who read his profile in the paper.  Another, not apparently one of the 12, has got a job after 6 months out of work.

I am truly delighted for all those who find work.  But something is worth thinking about.  An A4e business leader says, "We are hoping that this is just the start of employers contacting us."  This is a campaign by the local paper to publicise people on A4e's books, and it's that exposure which has had some success.  Nothing wrong with that.  But it will be A4e which gets the outcome payments.  There are other parts of the country where local councils have co-ordinated efforts with the local press and, possibly, WP providers, to find jobs for the unemployed.  Who gets the reward then?

Insight, prisons, quangos and unemployment

LDC is a private equity company and it is part of the Lloyds Banking Group (much of which you and I own). It wanted to support a management buy-out of JHP, a training and skills company which has been in existence for 25 years and is a competitor of A4e. So who better for LDC to bring in to do the due diligence than A4e? Its Insight consultancy arm "was able to draw on in-depth understanding of both the employability and skills markets, and used its knowledge and experience to provide detailed insight into the likely prospects for JHP". Yes, of course. And A4e "were also able to provide a unique insight into JHP’s positioning as an integrated provider of both employability and skills, an area of increasing importance to policy makers in all parties."

LDC went on to invest in JHP, so they were happy with what they learned. Now, I'm probably naive about such things, but isn't this a bit like asking Tesco to tell you whether it's worth investing in Sainsbury's?

The latest edition of that excellent publication Private Eye has two items which touch, albeit indirectly, on A4e. The first concerns prison education. A4e had a number of contracts including 8 in Kent; but it pulled out of those early because it was losing money hand over fist. They were taken over by Manchester College, which is now the largest provider with contracts in 96 institutions. Now they too are losing money and having to sack teaching staff. "Not all colleges failed to foresee the hidden costs," says the Eye, pointing out that two London colleges withdrew from a tendering process because there wasn't enough money in the contracts. But this is surely a case of the inability to undo a botched privatisation.

The second item concerns the PADA (Personal Accounts Delivery Authority). We reported that this quango has the job of enrolling millions of low-paid employees in a pension scheme based on stock market investment. One of its first actions was to dish out a large contract to 35 firms, including A4e, to do market research. PADA has become what the Eye calls an "old mates' club", staffed by people with surprising CVs who just happen to know each other. It's worth reading the article; it's entitled "Nest of Vipers". Let's hope that if David Cameron becomes PM he keeps his promise to do away with all these quangos.

And finally -- the unemployment figures which came out in recent days included the fact that "long-term unemployment, covering those out of work for more than a year, increased by 37,000 in the quarter to December to 663,000, also the highest figure since 1997." (Channel 4 news). So what is the point of New Deal?

Prison Education - a survey

This is rather old news, I'm afraid, dating back to February this year, but still very relevant. You wouldn't expect a trade union to be keen on the privatisation of public services; and the University and College Union are certainly not keen on the way in which "offender learning" has been contracted out to A4e. They produced a briefing for the Learning & Skills Council, with the results of a survey of about 100 UCU members who are employed by A4e. It includes:

"We asked what A4e was like as an employer and provider of offender learning. This is what they told us:

• 89.5 per cent employees would prefer to work for a college of further education.
• Over half (50.6 per cent) rate A4e as ‘Poor’ as a provider of quality offender learning.
• Over half (54.3 per cent) say offender learning has got worse since A4e won the contract."

And:

"Asked if A4e should be awarded the contract for offender learning again an overwhelming 81.6 per cent said ‘NO’"

It also includes a number of quotes from employees, including:

“A4e do not appear to understand or care about what education should be for. In my opinion education should be about enabling offenders to further themselves as individuals. They seem to regard the contract as a business.”

Another complaint concerned the lack of training and development. In April this year the union asked the LSC to take notice of this in awarding the new contracts. By August it had become clear that FE colleges were withdrawing from the bidding process because they couldn't afford to deliver an adequate service, and the union was warning the LSC "that it risks putting quality and standards in prison education at risk if it hands out contracts to private providers." We'll see.