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?


  1. Maybe I'm being too cynical but this seems carefully phrased:

    'Tesco said that over the last four months around 1,400 people had worked for free for a month as part of work experience in its stores, and since the scheme began 300 job-seekers had gained a job with the company.' (Guardian website)

    It doesn't explicitly state that the 300 job-seekers it took on were all from the group of 1400 who worked free for a month. Just like it absolutely clear.

    And. even if they were, how many are down to the opening of newly built Tesco stores - 'opportunities' which are location specific and unlikely to be repeatable in other areas or for future participants.

    1. Well Carl the same thought struck me! I bet the scheme began more than 3 months ag. So boasting about 300 jobseekers gaining a job is downright misleading:1) if this is not over the same 3 month period. and 2) as you say)if the 300 weren't in the cohort of 1400 - they may have been a completely different group of people!
      Incidentally I worked in the US for a while and was admonished for using the word "scheme" as it was considered tantamount to "scam". Appropriate here!

  2. Not only do the supermarkets pay little. They also have signed up to this work programme. Which means workers working for nothing.

    The more they sign up for the work programme, the more it means people who are in a job are at risk by people forced to work for nothing.

    "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". The TUC says that it could simply encourage employers to use free labour rather than recruit young people into jobs." Those 1,100 that didnt get the job, they worked and helped tesco make money over those 4 months.

  3. Maybe one unlooked for side effect of all this publicity is that it will make it harder for the Condems to accede to any future pleas of poverty and increased WP payments.

  4. Great article.

    That bbc piece is...depressing.

  5. Looking at these publicised tales of woe concerning A4e, I'd be lying to myself as well as the rest of you if I said I wasn't feeling a degree of Schadenfreude.

    That said, considering the amount of time I and others have been warning about the likes of A4e and their actions, I feel somewhat like Chief Brody from the Jaws movie. A man who tries to warn those in positions of power about an impending danger but is ignored and even thwarted at every turn.

    And this is precisely what makes me rather angry reading the above links. It's as though I and others here and elsewhere have been shouting at a brick wall for several years whilst all this has gone on. I have personally spoken to people on the Jobcentre and even a govt minister who have all dismissed my views and concerns.

    A4e and the W2W sector has gotten away with a lot over the past 15-20 years due to the ability of various govts to spin, lie and bluster their way through any criticism, backed up by uninformed public opinion which seems to get the red mist whenever the topic of benefits rears its ugly head!

    The pressure on A4e and others has to be kept up. Considering they make most of their cash via the taxpayer, the public as well as govt ministers have to be asked if this is the best value for money.

    P.S. More about W2W failures can be read about on P31 of the current Private Eye.


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