Thursday, 9 February 2012

A4e's "abysmal" record

The Public Accounts Committee yesterday launched a blistering attack on A4e during a session on the introduction of the Work Programme.  (See the Guardian)  Why, the committee wanted to know, did a company with such an "abysmal" record get contracts.  Andrew Dutton, A4e's CEO, had to respond to questioning about the company's UK turnover last year of £160m - £180m, all of it from government contracts, and the £11m it paid out in dividends, 87% of which went to Emma Harrison.  The committee chair, Margaret Hodge (a hero of mine despite her politics) ensured that they "spent some time trying to establish where money paid to A4e to deliver government contracts ended up."  She told Dutton, "You're one of the first examples we have had of a company which is entirely dependent on public contracts for your existence. We, in terms of looking for value for money, have an interest in following the pound. All your business is public contracts. You and Emma Harrison have to accept that there will be a different interest in the remuneration and profits made because the profits you make come from the taxes that ordinary, hard-working people pay."   The example of abysmal performance cited was the Pathways to Work programme, with 9% of clients got into work.

Several members of the committee expressed amazement that companies with such a poor record could get new contracts.  But the DWP's permanent secretary, Robert Devereux, confirmed what we have pointed out before - that they can't take past performance into account.  Lots of them had poor records (!)  And since some of the companies bidding were new entrants it wouldn't have been possible.

Fiona MacTaggart MP raised an interesting point about "job substitution" - "companies delivering the Work Programme, getting paid for pushing their clients into jobs that would otherwise have been filled by other jobseekers without the need for a third-party payment."  "In my constituency," she said, "a lot of people are being given work experience, unpaid, in retail, and then the retailers, I think, are being directly encouraged to employ people who have been given this one-month or two-, three-month interview process … and when they're offering jobs, a company like A4e, which operates in Slough, can say to Primark, if you want more of our free workers, I hope you are going to give our people 20-hour-week jobs. I'm sure it's not quite as overt as that, but I believe there is a risk of that happening."  All that Devereux could say to that was that a job was a good thing.  Another civil servant had a more wordy response but didn't answer the question.


  1. This work programme May help some unemployed get into work, but i personally see it as a way of these big companies getting free work. Why spend money to hire a person for 20 hours a week, when we can get 5 or 6 other people doing the job for nothing. Why buy the cow when you get the milk free? I am not saying all companies will do this.. but it makes good financial sense for them. No NI. no pensions, no pay and they still get to have the workers.

    The unemployed are invisible, the people who are sent on this work programme will be invisible, so the moral majority will feel good about themselves thinking its sorted when 3 months on then however many months off doesnt help anyone get a job.

    1. My son just signed on after having surgery on his shoulder(previously worked at amazon)he was put on work experience,sorting glass at a recycling plant for 8 weeks 30 hrs a week.The employer was very nice but admitted 2 days training would of sufficed,but as he was offered free labour and once agreeing to work there you cannot opt out or you lose your JSA what can he do,so lets do the math

      8 workers at 30hrs per week=240 times 8 weeks=1920hrs = cost nothing
      so why would they hire anybody?


    However, in making providers of the Work Programme compete on price, the Department for Work and Pensions has sought savings in the short term, from the payments made to the providers.

    In order to cut their costs, contractors must reduce the scope and quality of their service, see fewer jobseekers and see them less often. They must prioritise rigorously, not wasting precious time on intensive, professional, expensive assistance – such as help with debt, depression, alcohol abuse, homelessness, and so on. In the harsh parlance of procurement, they must "cream and park", focusing on the quick wins and ignoring the difficult ones.

    But if we are to hold these contracts to account, the government must release further detail on performance more than six months into the scheme. We must know how many jobseekers, with what backgrounds, have started, with which contractors; what service they have received; what jobs they are applying for; and with what outcomes. We should see what has been spent and whether contractors are using and paying the charities they committed to.

    We also need a plan B. Anyone not finding a job after two years should attend a further year of assistance on a new "Work Programme plus". It should be delivered through local specialist organisations, providing intensive support, up to 12 months' work experience and investment in business start-up and growth.

    This is a good story Committee Room 15
    Meeting started on Wednesday 8 February at 3.25pm. Ended at 6.34pm

    The introduction of the Work Programme
    Baroness Stedman-Scott, Chief Executive, Tomorrow’s People, Professor Dan Finn, Professor of Social Inclusion, University of Portsmouth, Geraldine Blake, Chief Executive, Community Links
    Robert Devereux, Permanent Secretary, Alan Cave, Senior Responsible Owner for the Work Programme, Chris Hayes, Director, Labour Market Strategy, Department for Work and Pensions, and Andrew Dutton, Chief Executive Officer, A4e The video

  3. Considering that Fred Goodwin lost his bauble, sorry knighthood (originally awarded for his services to the banking industry) for poor performance, would it not be fitting to remove Ms Harrison's CBE (originally awarded for helping the unemployed and the voluntary sector) for her now publicised poor performance? Especially as both have cost the taxpayer dearly.

    Just a thought.

  4. Plan b? were will the jobs come from?

  5. There is much more to a back to work programme than providing free "labour"... Some people do get work out of these schemes. HOWEVER it is up to the delivery agent in this case A4E to ensure that potential employers do not take advantage of the labour that is on offer.

    As the last comment said- Where will the jobs come from?


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