Lessons in outsourcing and bias

The last few days have seen a graphic example of the perils of outsourcing.  As the NHS is gradually auctioned off, one of the pieces up for grabs was the GP out-of-hours contracts.  Serco got the job in Cornwall, and were recently slammed for providing a substandard service.  Next came the 111 helpline.  The bidders had to work on assumptions about call volumes and length, since they were going to be paid per call.  NHS Direct, which won a lot of the contracts, has given one back shortly after starting it, and the rest before even starting.  The assumptions were wrong, and they can't make them viable.  For a minor player like NHS Direct, this is terminal.  They can't exist while making big losses.  But the major players can carry on regardless.
The journalist John Harris wrote a long article in the Guardian on Monday about Serco in particular and outsourcing in general.  He's got all the main points, and writes clearly and passionately.  But he misses one serious issue.  Contracts handed out by one government run for a lot longer than the government itself.  An incoming government in 2015 cannot cancel existing contracts except at immense cost.  So our fragile notion of democracy is further undermined.  We can get no further, because the politicians on all sides are not going to back away from outsourcing.  More local councils are looking at hiving off many of their services.  Government will flog off anything it can.  There are vast amounts of money to be made, and that's all that matters.

There was a hilarious article in the Telegraph yesterday.  Back in November 2011 the BBC's John Humphrys presented a radio programme called The Future of the Welfare State.  It was a personal view, from his Welsh home town.  But there were complaints that it was not based on evidence, and was politically biassed.  The BBC Trust has just ruled that it failed to back the views presented with figures, and breached the rules on impartiality and accuracy.  Cue outrage from Iain Duncan Smith, who obviously loved the original programme, and sees the Trust's verdict as typical left-wing bias.  Ironically, he felt the same about Humphrys interview of him about the benefits cap recently; and he professes himself "staggered" about the way the BBC reported the High Court's judgement on the bedroom tax yesterday.  Yes, IDS is ridiculous.  But he's also very dangerous.  The only acceptable stance, as far as he's concerned, is for the BBC to parrot the government's line uncritically.  Yet another chip out of the structure of democracy.

"I'm proud of our welfare reforms" says IDS

An astonishing piece appears on the Guardian site today in which Iain Duncan Smith is given the space to tell us how proud he is of his welfare "reforms".  There's no point in my analysing it for falsehood and self-delusion.  That's an exercise you can do for yourself.  It is, perhaps, significant that the paper disabled comments after 329 - quite a few of them not allowed by the moderator.  People were angry.  I will just pick out one claim: "Our Work Programme has launched and the industry tells us that so far 321,000 people have found a job through it."  This is at worst mendacious, and at best utterly misleading, as all of us who follow the WP know.  And it's typical of the whole article.
There's still no sign of the figures for sanctions, figures which were supposed to be published in May but were suppressed because of "doubts about the quality of the data".  I wonder why.

Burying bad news

The birth of the Windsor baby, and the fact that MPs and their journalist mates are all on holiday, meant that a significant news story was effectively buried.  The papers which did pick it up are a bit confused, and no wonder.  Try the Guardian.  "Atos reports found 'unacceptably poor'".  It's the quality of the written reports which the Atos people make which has not come up to scratch, not, the DWP insists, the validity of the verdicts.  Even so, they are bringing in "additional providers" from next year to work alongside Atos in order to speed things up.  It is really not clear what deficiencies the DWP is admitting to.  The Mirror says, "Atos rapped over wrongly passing fit for work up to 41% of claimants", and that the DWP was "told to act because of deep concerns about Atos at No 10".  That doesn't seem quite true, but who knows?  And what penalty has Atos actually paid?
Another little-reported failure is that of the Youth Contract, the wage incentive scheme which was supposed to help 160,000 young people into work over three years.  In its first year it helped just 4,700.  The Guardian and the Financial Times both analyse the figures.  But unless you read these papers you won't have heard any of this.  Is the timing accidental?

Stats, and a report

We learned last week that DWP press officers were to be sent on a statistics course this summer, following the outpouring of dodgy and downright untrue figures, designed to prove whatever Iain Duncan Smith wants to believe.  On Tuesday the man himself appeared before the Work & Pensions Select Committee, but the topic was the non-progress of Universal Credit.  It seemed to many of us that he was not to be answerable for misleading the public; but it's now been confirmed that he will appear before the committee on 4 September to answer questions on the DWP's annual report and on the Department's use of statistics.  It will be interesting; but if his performance on Monday in the Today programme interview is any guide, it will be entirely unproductive.

There's a report out today on the whole subject of outsourcing.  It's by the Institute for Government, a think-tank which seems to be genuinely non-partisan.  It is summarised in the Independent, which headlines it as "the great outsourcing scandal".  The report uses the Work Programme as one of its four sectors for examination, and comes up with the (hardly startling) opinion that there is a lot of "creaming and parking" going on.  They say that they "found companies regularly playing the system to ensure they made money....... Providers were also cutting costs by using 'group sessions' and telephone calls rather than face-to-face contact."  Yes, well, I think we knew that.  The IfG's recommendation is disappointing: "The Government should set minimum performance levels, and punish poor performers by imposing penalties or terminating contracts entirely."  The authors are apparently unaware that there are minimum performance levels, and there are supposed to be penalties.  They miss the point that government has no wish to proclaim its own failure by punishing its contractors.
It's a timid report which, despite a few sensible points, misses some of the crucial dangers of outsourcing.

Iain Duncan Smith - true to form

I thought we might get an IDS-free day today, but still the media keep coming up with depressing pieces.  I've bookmarked so many that I can't possibly post links to them, and you wouldn't want to read them anyway.  When I listened to the interview yesterday on the Today programme, I was hoping that John Humphrys would challenge him over his misuse of figures - and he did.  But that brought the extraordinary conversation, recorded in the Huffington Post: 

  '"What they said was you can't absolutely prove that those two things are connected."  Challenged over the fact his statement was not supported by officials statistics published by his own department, Duncan Smith said: "Yes, but by the way, you can't disprove what I said either.  I believe that this to be right, I believe that we are already seeing people going back to work who were not going to go back to work," he said.  "I believe that this will show, as we move forward, that people who were not seeking work are now seeking work."'

Of course, lots of people picked that up and mocked it.  Another assertion, quickly picked up by the New Statesman, was that homelessness figures had "hardly moved".  Actually, homelessness in England is up by 27% since 2010.  The New Statesman published an excellent piece, "Five things Iain Duncan Smith doesn't want you to know about the benefit cap" - essential reading.
Something which went unchallenged was the assertion, or implication, that people can go out and get a job if they want one.
It was inevitable that the interview would result in a complaint from IDS about the BBC.  He said to Humphrys, "This is absurd. What you are doing, as always happens in the BBC, is seeking out lots of little cases from people who are politically motivated to say this is wrong.”
My final link is to a Steve Bell cartoon in the Guardian.

Labour had little to say.  And that's because they support the benefit cap, and know that a large majority of the electorate support it too.  No minds were changed yesterday, but what I found most worrying was that so many people on the ideological right were content to churn out statements which they know to be untrue or highly misleading.  
And the Tories feel that they're on a roll, and can put forward further "reforms".  We're hearing today about a reduction in the cap to £20k, if it's shown to "work"; stopping housing benefit to the under-25s; and denying housing to teenage single mothers.

  

Bingo!

There's an amusing story in the Daily Mail today.  The people running A4e's office in Kirby had a syndicate gambling on the EuroMillions, and they recently won the £28.8m jackpot. 
There was none of this, "It won't change my way of life" nonsense.  The next day, no one turned up for work.  And who can blame them?  Unfortunately, one of the 11 members of the syndicate was off ill on the day the payments were collected, and now the rest of the syndicate won't pay her her share.  She's taking them to court.
The Mail reports: "Yesterday an A4e employee tweeted: ‘In recruitment hell....all our staff in Liverpool office have left after winning lottery.’ The tweet was removed a few hours later."  

As I was saying ......

Last week I speculated about the future of outsourcing, and pointed out some of its perils.  Now comes vindication with the story of G4S and Serco having overcharged the government massively on their contracts to tag offenders.  Because G4S is apparently not co-operating fully with the government's investigation, Chris Grayling is calling in the cops.  With new contracts in the pipeline, Serco have said they won't bid for them - but Capita plans to do so.  Unless a foreign company throws its hat in the ring, that's it.  There are no other companies in a position to bid.
We learned today that, between them, Serco and G4S get £1.5 billion a year from the may contracts like this that they have.  And in total outsourcing is worth more than £80 billion a year.  That's our money.  Some are now putting the blame for messes like the tagging contracts on the poor skills of those civil servants who are supposed to manage and monitor them.  Well, maybe, but that's inevitable.  They are hugely outgunned by the companies.