Mark Lovell on finance

On an obscure website called myfinances.co.uk A4e's Mark Lovell gets the chance to expound his ideas about "Tackling the challenges of supporting public services". It's not so much an interview, more of an essay, and it makes interesting reading. A4e has long had the ambition to own a bank, and while that may seem an unlikely proposition, the piece shows that there are ways of getting into it sideways, as it were. He addresses the question: "In the current financial climate, what are the three most important initiatives your company is undertaking?" He talks about their debt advice services, and then: "Developing a fund with finance partners from which the people we work with who start their own business, or a social enterprise, can secure capital to help them get going. Access to capital and microcredit / finance is more important than ever in the current economic climate and self-employment or business start up is really important. - Working with likeminded organisations – banks, charities, credit unions, intermediaries, lenders, utilities – to change the way financial products and services are designed and reach low income consumers. Biting off a big challenge on that one!"

Think about the first part of that. It means that A4e clients who want to start their own businesses will borrow money from A4e (or an A4e partnership). Sounds fine, at a time when banks won't lend to start-ups with no security to offer. But a client can only make a profit for A4e if s/he is in work, or self-employment for two years. Getting the start-up loan from A4e would bind him or her into a relationship with the company which could be uncomfortable, to say the least.

The other part of the interview which worries me is: "We want to join up as many services as possible. We deal with around 400,000 consumers per year at the moment. Most of them are either out of work or on low incomes. They access a range of public services from multiple agencies and we contract with nearly 40 different organisations to deliver these services. We can provide better, joined up services at more marginal cost by bringing some of these activities together." Again, this is a long-held ambition of A4e, the "super-contract" which would see A4e having the right to be the gateway for all services to its clients. Am I overstating it to say that, in effect, a local authority would sell people to A4e? We can certainly see Emma Harrison's "working families everywhere" venture as part of this campaign to roll up access to all public services into one contract and direct people's lives.