The news couldn't be much worse for A4e. The MailOnline, which has savaged Emma Harrison and A4e in the last few days, now reports that A4e iis at the centre of a fraud investigation. "The Department for Work and Pensions confirmed last night that a probe into A4e – headed by Mrs Harrison – was under way. A source at the company told The Mail on Sunday that on Friday afternoon, officers from Thames Valley Police visited the company’s offices in Slough, Berkshire. The source said they stayed for up to four hours and demanded staff hand over documents and computer files dating back two years." Apparently what's being investigated is the allegation that "the company had put some people in jobs for just one day, but claimed the funding nonetheless."
Anyone connected with the industry will be scratching their heads at this. Under the 2006 contracts (I don't know about subsequent ones) it was perfectly possible to do this in certain circumstances. A client gets a job, to start on Monday morning; so the provider fills in the paperwork on the Friday afternoon and sends it back to the Jobcentre, which signs the client off benefits. The client turns up to work but decides at the end of the day that he doesn't want to do this and walks out. This is still claimable as a job outcome if the employer signs that the job was intended to last for 13 weeks. They won't get the other half of the money, which is payable only when the client has stayed in the job for 13 weeks. If this is what's being investigated, then A4e will probably be in the clear. But we'll wait and see.
Saturday, 18 February 2012
Friday, 17 February 2012
"Living off the state - and how"
I brought the week to an end too soon. The Daily Mail hasn't finished with Emma Harrison. Its long article headlined, "Living off the state - and how: Inside the 16 bedroom, 42-loo mansion of Government's families tsar whose £8.5m payday provoked outrage" is a real demolition job. They've homed in on the opulence of her home, Thornbridge Hall; her personal wealth, an estimated £70 million; and the history of A4e. They've spoken to the neighbours, and to some clients. It's painful. And it's not all accurate. They haven't grasped the history of New Deal, for instance. But it really is so devastating that one could almost feel sorry for Harrison. Is there a danger of overkill here? It won't deprive A4e of any contracts. All it will do is drive her off the TV for a while.
Two links
Just a couple of links to end an eventful week.
The first is to a BBC local news item on the "millions for Emma Harrison" story.
Thursday, 16 February 2012
Free labour for Tesco
Many people will have seen the news today about Tesco's use of free labour. It started with a "job" advert on the government's own website for a night shift worker in Tesco in East Anglia. Pay - "JSA + expenses". Outrage spread via Facebook and other sites. Then Left Foot Forward showed how this was far from a one-off. Guardian journalists had found several similar adverts. Tesco's response fluctuated. First they told people that they were helping young people by taking part in a government scheme; then they said at had been a mistake. Now John Harris has written a considered piece in the Guardian about what he calls the "sinister reality" of such schemes.
I can add little to what has been written. But it will be interesting to see whether the story is taken up by the rest of the media. Newsnight, perhaps? If you're one of those driven to boycott Tesco because of their use of free labour to save on employment costs, bear in mind that Sainsbury's and the Co-op have decided to steer clear of the scheme, and can be patronised with a clear conscience.
I can add little to what has been written. But it will be interesting to see whether the story is taken up by the rest of the media. Newsnight, perhaps? If you're one of those driven to boycott Tesco because of their use of free labour to save on employment costs, bear in mind that Sainsbury's and the Co-op have decided to steer clear of the scheme, and can be patronised with a clear conscience.
Moving on?
The fuss dies down, the media spotlight moves away from A4e, and nothing has changed. It's time to remind myself, and my readers, why this matters.
Successive governments decided that the delivery of public services would be more efficient if it was motivated by private profit. A few outsourcing businesses such as Capita and Serco grew fat, making big profits for their bosses and shareholders. The last Labour government applied the same logic to welfare-to-work efforts. In 2006 the role of Jobcentre Plus was downgraded and people were sacked. One company, A4e, did so well from the privatisation that other players couldn't understand how they'd done it. However, those New Deal contracts were so badly designed that results were half of what had been promised; projected outcomes of 50% came in at 25%. Still, the contractors made a profit, and A4e widened its business, scooping up contracts in a wide range of public services, all of them dealing with the most disadvantaged people. On the back of its success in Britain, it secured contracts abroad.
Flexible New Deal delivered even poorer outcomes than its predecessor, but profits were still good. And through all this, A4e behaved in a very different way from its rivals. Who could name the boss of any other outsourcing company? But Emma Harrison was the very public face of A4e, hungry for publicity and advising governments. There was bad publicity, certainly. Yet none of it lasted. TV producers wanted to go after the company, but had decided that the only way to do such reports was with whistle-blowers and / or secret filming, so it was left to radio producers to keep up the pressure. Harrison seemed fire-proof, however, and the incoming coalition government decided that she was the person to rescue the country from its burden of workless families.
The government was unable to rid itself of the delusion that profit was the best incentive. The Work Programme has been designed to reward only "success". It was never considered that a better way was to beef up Jobcentre Plus. There was outrage when the amount of money which Harrison personally had made from contracts last year was publicised, especially when it was linked to a distinct lack of success. Of course, the other outsourcing companies had made similar profits, but none of them had the same public profile as Harrison and A4e. All that money could have gone to creating jobs or shaping a better service to the unemployed.
I regularly get comments from readers which I can't publish. They tell stories of experiences with A4e which I can't verify. But they add to the picture of a company which needs continuing scrutiny.
Successive governments decided that the delivery of public services would be more efficient if it was motivated by private profit. A few outsourcing businesses such as Capita and Serco grew fat, making big profits for their bosses and shareholders. The last Labour government applied the same logic to welfare-to-work efforts. In 2006 the role of Jobcentre Plus was downgraded and people were sacked. One company, A4e, did so well from the privatisation that other players couldn't understand how they'd done it. However, those New Deal contracts were so badly designed that results were half of what had been promised; projected outcomes of 50% came in at 25%. Still, the contractors made a profit, and A4e widened its business, scooping up contracts in a wide range of public services, all of them dealing with the most disadvantaged people. On the back of its success in Britain, it secured contracts abroad.
Flexible New Deal delivered even poorer outcomes than its predecessor, but profits were still good. And through all this, A4e behaved in a very different way from its rivals. Who could name the boss of any other outsourcing company? But Emma Harrison was the very public face of A4e, hungry for publicity and advising governments. There was bad publicity, certainly. Yet none of it lasted. TV producers wanted to go after the company, but had decided that the only way to do such reports was with whistle-blowers and / or secret filming, so it was left to radio producers to keep up the pressure. Harrison seemed fire-proof, however, and the incoming coalition government decided that she was the person to rescue the country from its burden of workless families.
The government was unable to rid itself of the delusion that profit was the best incentive. The Work Programme has been designed to reward only "success". It was never considered that a better way was to beef up Jobcentre Plus. There was outrage when the amount of money which Harrison personally had made from contracts last year was publicised, especially when it was linked to a distinct lack of success. Of course, the other outsourcing companies had made similar profits, but none of them had the same public profile as Harrison and A4e. All that money could have gone to creating jobs or shaping a better service to the unemployed.
I regularly get comments from readers which I can't publish. They tell stories of experiences with A4e which I can't verify. But they add to the picture of a company which needs continuing scrutiny.
Saturday, 11 February 2012
The bad publicity rolls on
The Guardian started it with their report of the Public Accounts Committee grilling of A4e's Andrew Dutton about the company's record and the money paid to its chairman Emma Harrison. When the Daily Mail took up the story the next day there was a huge wave of interest (four times the average number of hits on this blog testify to that). Other papers chipped in. The Express had "Fury over familes tsar's £8m payout". Unfortunately they chose to quote the Taxpayers' Alliance, not a good way of boosting your case. But they also summarised A4e's reaction: "“Some members of the Public accounts Committee unhelpfully referred to early performance figures in the previous Pathways to Work contract without looking at performance during the life of that contract. They also confused A4e performance with another contractor, whose performance level was significantly lower than that of A4e.” Well, they didn't protest when the 9% figure was given at that first PAC meeting. And they didn't protest when it was repeated on Wednesday. I think they mean that Reed did even worse.
The Yorkshire Post went with a simple summary, but also had a reaction from A4e: "For the past 21 years, Ms Harrison has taken substantial and significant risks in growing the company. Like all entrepreneurs, she has provided personal guarantees and invested a significant amount of her personal capital into the company during its lifetime. Having built a private company with her own resources, and continued to invest and take risks, her remuneration is in line with that of a successful entrepreneur.” But that simply won't do. There has been no risk whatever in these contracts. In the 2006 and 2009 contracts providers made substantial profits despite achieving roughly half of the outcomes promised. In the numerous other contracts A4e has secured, the money comes in however good or bad the performance turns out to be. This is not entrepreneurship. The Telegraph headlines "David Cameron's families adviser 'shares £11m dividends pot'" Their take on it is that "The disclosure is likely to prove embarrassing for the Prime Minister, who has urged restraint on pay among companies which rely on state contracts. Mr Cameron has previously heaped praise on Mrs Harrison, claiming he had confidence in her to deliver on its targets to get people into work."
The Star, Sheffield's local paper,has a short summary, but also quotes Nick Clegg, a Sheffield MP. “I know the work of A4e very well. The payments a private company makes are something the Government cannot stop. I will be asking through the Treasury that every department in Whitehall has a very close look at whether they are getting the best value for money with companies paid through the public purse.”
Clegg is right, and the "outrage" of some politicians is a little forced. It was Labour's David Blunkett who decided that private profit was going to be the best incentive for New Deal. It was a Labour government which designed the contracts, unworried by how much money the companies were making. No doubt all the fuss seems terribly unfair to A4e. Why aren't they getting at Serco, G4S or any of the others? They have made the same sort of profits. Well, if you seek publicity as avidly as Emma Harrison has always done it can come back to bite you. If you own 85% (or is it 87%) of the company your personal income comes under scrutiny. If you bandy about phrases like "social purpose company" and "doing well by doing good", while the other companies just get on with business, you invite the sort of publicity you're now enjoying.
The Independent on Sunday has a leading article which uses the affair to illustrate why the government's welfare reforms are going wrong. After expressing doubts about the benefits cap they say: " while we support many of the fine principles set out by Mr Duncan Smith, we fear that the design of his reforms will cause needless hardship, while the spending cuts of which they are part will hurt the economy and mean that there will be fewer jobs into which people can be helped." They then say that while Labour's privatisation of New Deal was "a plausible idea" but, "Unfortunately, the contracts seem to have allowed some private providers to cream off large profits. The Public Accounts Committee last week criticised the £8.6m dividend paid to Emma Harrison by her "social purpose" company A4e, which used to be called Action for Employment. Her company's record on getting people into work seems unimpressive, yet Ms Harrison was appointed the Prime Minister's adviser on "problem families", and her generous pay derives entirely from public contracts. She stands as a symbol of how hard it is for governments to get people off welfare and into work, and how hard it is for this government in particular to do it in such a way as to convince us that we are 'all in it together.' "
The Guardian has moved on to a related issue, unpaid work schemes. Sainsbury's have followed Waterstones in deciding to have nothing to do with any of these compulsory free labour schemes, and the unions are calling on the other high street chains to do the same. "John Hannett, Usdaw general secretary, said: 'Usdaw is not opposed to schemes that genuinely aim to give young people appropriate work experience or help long-term unemployed people get back into work, but schemes should be voluntary, participants should receive the rate for the job, and there needs to be transparent checks and balances in place.'" The TUC says that it could simply encourage employers to use free labour rather than recruit young people into jobs. Tesco comes up with some figures. In the last 4 months they have had 1,400 people working free for a month, and have taken on 300 "jobseekers". Even assuming the figures are correct, that means that 4 out of 5 don't get a job. We are going to need really detailed figures on this, from individual stores. And there's a very important news item by the BBC's Paul Mason showing that even those who do get jobs in supermarkets will still have to be subsidised by the state because the wages are so low. It puts Emma Harrison's pay into perspective, doesn't it?
Friday, 10 February 2012
Emma gets the Daily Mail treatment
The unemployed are used to it. Being demonised by the Daily Mail is something you have to put up with if you're out of work. But today the paper turns its fire on Emma Harrison, following the Public Accounts Committee hearing. "Fury as families tsar gets £8.6m in one year (and the bulk of it comes from taxpayers)" is the headline. And the focus is on money. She "pocketed £8.6m", which was up 300 per cent on the year before". Margaret Hodge is quoted as saying it's an outrage. There's an insert on Thornbridge Hall, her home, and we're told that, "She is now worth an estimated £70million, putting her at 968 on The Sunday Times rich list. A4e is worth £80million, with her stake put at £68million." There is then a write-up of the committee's proceedings, and the response of Andrew Dutton. The article has no less than 4 photos of Ms Harrison, a signal that they're targeting an individual. Last night A4e put out a statement saying that their performance was better than the industry average.
I doubt it will bother Harrison too much. Two days ago she was at a charity reception at 10 Downing Street. And don't they say, "all publicity is good publicity"?
I doubt it will bother Harrison too much. Two days ago she was at a charity reception at 10 Downing Street. And don't they say, "all publicity is good publicity"?
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