Channelling the money

A4e has benefitted greatly, along with other companies, from the government's determination to take powers away from democratically elected local councils and hand them over to unelected bodies. And now that they want to channel funds through local councils they're increasingly finding that they can't.

Take the Future Jobs Fund. This was designed actually to create jobs, albeit temporary, for young people, so bids were invited from councils and from "partnerships" which could cover a wider area. But these partnerships tend to include private companies. In the Plymouth area, for example, the contract has gone to a group headed by the Wolseley Community Economic Development Trust, an organisation mainly funded by the council and European money, working with JCP - and A4e. (Just how much involvement A4e will have isn't clear.)

Then there are the Regional Development Agencies. These have often come under fire for being very expensive quangos soaking up money that should be going into development and regeneration, and the Conservatives have made noises about abolishing them. The NWDA, operating in the North West, has been more criticised than most. At the end of last year it was revealed that it had spent nearly £90,000 on attending party conferences, and the Taxpayers' Alliance branded it an expensive failure which had proved ineffective in creating new jobs, attracting investment and bridging the gap between rich and poor. One of the NWDA's operations is called Business Start Up which is run by A4e. "Business Start Up is a new funding initiative operated by A4e on behalf of the Northwest Regional Development Agency (NWDA) aimed at encouraging business start ups and advising fledgling businesses within hard to reach groups and areas in the Northwest. The fund is operated locally by A4e’s Northwest based consortium. Access to Business Start Up and any other business support products in the region can be found through Business Link Northwest, the gateway to business support in the region."

But not every council is happy with this arrangement. In Sefton on Merseyside the council wanted to run their own Business Startup scheme with the money on offer, but were told they could not. A report to the council's cabinet said: "Initial discussions ...... indicated that an additional cash contribution was required from participating organisations in order to co-fund the Business Start Up programme in their area. Organisations not providing an additional contribution would have delivery managed by an intermediary (A4E)." The council thought that they had arranged the required funding but "the Agency declined this offer, without clear reasoning, and offered instead direct contracting by the Agency (through its project manager A4E)." Council members were not happy, but were helpless to do anything about it.

Perhaps more councils will start to question the wisdom of distributing funding through private companies.