Tuesday, 14 July 2009

History of the company

In the 1980s a small engineering training company was set up in Sheffield to take advantage of the Conservative government's willingness to pour money into such companies for uncertain returns. The owner, Harrison, took his daughter, Emma, into the company, then quickly skipped to Germany. This part of A4e's history has acquired the aura of legend. Emma Harrison was a young graduate, suddenly landed with a company to run, and an absent father who was busy draining it of money. In 1991 Emma renamed the outfit Action for Employment (quickly abbreviated) and set about making money. She remains almost the sole owner.

The breakthrough came with the Labour government's New Deal programme. A4e rapidly became the "preferred bidder" for contracts to provide back-to-work training. Their success baffled their competitors, who knew they were putting in equally good bids. This led to rumours that it was Emma's connections who were responsible. Someone high up in government, perhaps? A Sheffield MP name of Blunkett, maybe? But there was no evidence for this, and rival training companies went out of business as A4e prospered.

Business Link - questions in the House In 2001 the Business Link organisations, which had been formed locally, were put out to tender by the government. A4e bid for all of them. In their determination to get the contracts they were prepared to stretch the truth. In Somerset they had stated that local leaders, including the leader of the Council, supported the bid. That was news to the gentlemen in question, and the bid had to be withdrawn. In Humberside it was felt that something similar was happening, but government ministers seemed intent on awarding the contract to A4e. The company scooped up the majority of these contracts nationwide. They lost many of them in 2007.

EI EXCLUSIVE: Britain's double game In 2005 suspicions were heightened when A4e was able to work in Israel, in contravention of British government policy but apparently with British Embassy assistance. The contract also marked the beginning of A4e's expansion into the international market. They have been able to boast of their success in Britain in "reforming" public services, and by 2008 were being described as a £120m global organisation. In Israel, business appears to be going well. See an article in the Jerusalem Post, where A4e's genius for propaganda is well demonstrated. The company is now known as Amin in israel.

A4e operates in a growing number of countries, trading on their claim to be "the UK’s largest private provider of public services in the labour market and social integration sectors, including the welfare to work programme ‘New Deal Prime Contractor'". They are established in France, Germany and Australia. We also learn from a Polish journal that it "currently manages two projects in Poland, in Szczecin and in Zabrze, supporting 550 people back into work by the end of 2008". Another developing market is India, where A4e have a foot in the door. Turkey looks set to be the next opportunity, and they are trying to establish themselves in South Africa.

A4e's philosophy is now simple: bid for everything. Currently they employ over 60 professional bid-writers. The drive to diversify in the last few years has been partly the result of a drop in profits. In 2002 -03 A4e was worth £50 million on the basis of profits of £4m and sales of £60m. In 2004 - 05 the figures were £3.9m in profit on £75.7m sales. Note that these "sales" are the money spent on meeting the contracts; profit is what they manage to keep. Profits declined sharply in 2007, as a number of contracts were not renewed. Undaunted, Emma said that she was "proud that the company has sustained pure organic growth at a phenomenal rate" and forecast an increase in profits to a £500 million turnover by 2014.

A4e has set up the Foundation for Social Improvement, which apparently aims to encourage the "third sector", especially smaller charities, to depend on them for training and access to government. They are "proud to be working in conjunction with Communities and Local Government (CLG) to deliver Connecting Communities Plus scheme". The FSI is a "social enterprise", an organisation which blurs the line between the voluntary sector and for-profit businesses. It's another example of the company's ability to infiltrate all aspects of the government's dealings with the most disadvantaged.

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