Tuesday, 29 May 2012

That PAC meeting

You can read the transcript of the Public Accounts Committee meeting on Tuesday here.  Not the bit that was held in secretBut we did learn that there was another witness besides Eddie Hutchinson whose evidence was heard in private.  She was a whistle-blower who was complaining about what had happened.  For those who don't want to plough through the entire piece I have made notes below.  The characters involved are, on the committee, Margaret Hodge, Fiona Mctaggart, Austin Mitchell, Matthew Hancock and Richard Bacon and, as witnesses, Robert Devereux, Permanent Secretary, Department for Work and Pensions, and Alan Cave, Delivery Director, Department for Work and Pensions, along with Amyas Morse, head of the National Audit Office.

MH not happy with RD.  She sent him the A4e internal report and some emails.  He said there wasn't enough specific information in them to do a proper investigation.  She says he should have come back to her for that info.  He says that Grayling announced his enquiry.  She persists, he is infuriating.  What about the internal report?  He accepted A4e's word that of the 9 cases only 3 were actually fraud, and they related to one person.  But they are going to investigate all the cases.  He says they can't investigate where a company has gone out of business.  R Bacon points out that you can.  MH asks about the audit Grayling asked for.  RD says that it won't be published.  "This is a whole lot of good chaps-I understand that the Chairman is an ex-Permanent Secretary, whom, no doubt, you have conversations with. It is a big company with an expensive PR machine, which we have seen in operation over the past few weeks. They are bound to be good citizens, so we don’t need to have open and transparent oversight of them." - MH.  RD gives the official answer about possible litigation.  Lot of discussion with committee members about this.  RD says all the evidence is that A4e is not fraudulent.  Hillier keen to link value for money to the service her constituents are getting.  RD says the WP is not about the service - if they don't provide the service they won't get paid.  FM wants the evidence that A4e " has in place a system for staff to report improper behaviour or performance management systems that avoid perverse incentives".  
AM: "You have just sat through a long closed session, which produced some fairly damning indictments of both the structures and the practices in A4e and Working Links and which gave several indications of possible fraud. Some evidence has been submitted to us as well-to the Chair-by the people who gave evidence in that closed session. Will those allegations be investigated?"  He is keen to talk about what they do to avoid fraud - mentions Private Eye, about which RD is sarcastic.  He describes controls now in place to ensure claims are correct.  MH: "So is A4e fit and proper to undertake the Work Programme ?"  RD says yes.  
RD goes through all the checking process in detail.  Matthew Hancock asks him the questions which allow him to show how watertight the WP is.  Hodge raises issue of bonuses.  RD says it's not an incentive to fraud because they can't now commit fraud.  Hodge describes the case of a woman who already had a job lined up but was persuaded to sign the forms for A4e in return for £50 for herself.  She thinks this is wrong because A4e did nothing for the money.  RD says the £50 was A4e's and it's within the rules.  Some argument about this.  How can you measure what help was given?  They get on to complaints and argue about that.  
Hillier wants a single hotline for complaints and whistleblowers.  RD says he wants people to go to the provider first then the JC.  FM says: "The reason that I first wrote to the Comptroller and Auditor General about how A4e were behaving was that there was no process where the concerns of my constituents, who were referred to A4e, could properly be dealt with. I just got brush-off letters and there was no process where I could advocate on their behalf. Now that was not always about fraud, but there is a lack of a process."  RD bats that aside.  
Cave admits that they didn't ask for the 2009 report and should have done.  Conversation shows that there were two earlier witnesses, not just Hutchinson.  He later admits that he doesn't know who the other 4 shareholders of A4e are.  FM presses the point about controls needing to be not just financial.  She returns to this.  "What struck me from my contact with people is that a large proportion of those customers are very often not reluctant, but are very keen on getting into work, very keen that the public’s money is properly spent and feel that what they see is not spending the public’s money properly."  (Hancock again feeds RD nice questions.)    RM: "We keep hearing from people that they do not know how they can complain and that they have bullying managers who prevent complaints. I accept that you have not been able to investigate all these cases, but one of the things that I have learned as an MP is that while you get green ink complainers, when you get the same complaint from all ends of the constituency, there is something that you should be alert to, and one of the things that I am very struck by is the number of people who have worked for these companies and say that bullying management means that there isn’t a way in which they feel that they can safely make complaints when they are asked to do things. We have had evidence from people who have been asked to do things that include making up evidence and telling lies. We have not been able to test that evidence in a court of law. Nevertheless, it is quite perturbing that people feel that that is what they have been asked to do and that there is no way they can whistleblow about it."  She refers to a previous witness: "She was talking about a different programme, but it was in this period, and therefore she did not know how to complain. While you are right that the programme that she was asked to lie about was not the Work Programme , if she had known of a safe way of passing it up, that would have equally applied to people who worked on other programmes at that time in that company."  
Mitchell:  " I think Mr Devereux has said that one of these companies could go bankrupt. That is about equivalent to the Governor of the Bank of England saying moral hazard could discipline the banks because they might go bankrupt, too. They are already too big to fail. It is so unlikely. Here is a new category of capitalism that was set up to milk the state. It is not facing the competition of the market; it’s got a safe contract, which just goes on, so the threat of bankruptcy is really hypothetical."
Argument about what "systemic" means.  Then Hodge: " Finally, a public sector contract to build houses, hospitals or schools is pretty straightforward. I am thinking of payment by results-the school is there-and you can keep a little bit of money back to make sure that if anything has gone wrong, you can get it back. Would you accept that a contract that provides human services is qualitatively different? It will work only if you build trust. I think that that is the key thing-there has to be trust in the system. It is partly about the outcome but also about-this is the Fiona point, really-how well the customers are treated. That has to be part of the mix in these sorts of contracts. So it is about the how as well as the how much-I hope that you accept that. If I put it to you that I think that trust has broken down here, in particular in relation to A4e, how can you rebuild it?" Just stonewalling from RD, helped by Hancock.
Several points stand out for me.  There is Devereux's determination that anything before the Work Programme doesn't really matter; and the WP is fraud-proof.  Hodge and Mctaggart in particular want to focus on the service customers get, but Devereux thinks that's irrelevant because the companies only get paid if they deliver a service which gets results.  
It's frustrating to read, but not as frustrating as it must have been for the committee members.
Meanwhile, Chris Grayling is assuring us that the Work Programme is doing splendidly.  In the Express he says that 100,000 people have found work through it.    


  1. I watched this on the parliament tv, and i also saw it on youtube. I have to say I got very frustrated at Robert Devereux's comments. Nothing is Fraud Proof, It just means it takes time to work out how to do it.

    I think its inconceivable that his comments about how it was in the past so that is ignored. Fraud is FRAUD even if its 1 year, 10 years, 30 years ago.

    Yes go complain to the person you have a complaint with, and they will say theres nothing here, Complain about the company to the company, and they will say you are just being over sensitive, that you are a trouble maker.. and nothing will happen, apart from you getting penalised.

    "Robert Devereux: Pretty much at the same time as you sent me those individual allegations, you will remember that the Department announced that it was doing a complete review of its contracts with A4e. So pretty much the same investigators went about doing a systematic sampled base inquiry of the contracts." this is telling.. The auditers they had were busy so couldnt investigate the individual complaints. But Isnt that the whole point

  2. I think a lot of these schemes while to be charitable they were created with the best intentions..They forget to see the human costs. People are tick boxes.

    Devereux has fallen into the trap of thinking the outcome is worth anything , rather than the process being important. They look at outcomes (which could be less than the dead weight figures but we wont know that because the DWP have decided to not publish the information as yet.) Getting a job isnt just about applying for jobs. its about getting confidence back, its about dealing with the underlying causes of unemployment.

    If the infrastructure in the areas where these schemes run are not able to cope with massive amount of job seekers, then it will fail. There needs to be places where people can get jobs, unfortunately at this moment in time there is hardly any growth. But these work programme schemes they only look at get a job.. rather than reasons why, they have the ideological bias that if you are unemployed you must be lazy. They forget as i said the human cost of unemployment.

    These companies a4e, serco, g4s etc all are profiting from the short sightedness of the DWP/Devereux/Graying,/Duncan Smith.. But because of the ideological bias these people have they cannot see the harm thats cause (I am not just blaming one government they all have fallen into the trap of ideology,

  3. Had a friend send me this This is very interesting A4e Being mentioned in new zealand http://www.newstalkzb.co.nz/auckland/news/nbpol/1588535392-Fears-over-contracting-out-of-WINZ-functions Fears are being raised over contracting out of Work and Income functions.

    The Green Party is outlining its concerns about the future of beneficiary casework in its minority report on the Government's Bill reforming the welfare system.

    Co-leader Metiria Turei's citing Treasury advice which warns it'll be hard to evaluate whether providers of employment services are offering value for money.

    "Our concern is that if contracts are let to poorly organised private providers at great cost to the public but with very little monitoring and proper quality controls, it is the most vulnerable New Zealanders who will pay the price.

    New Zealand First is also saying no to the use of private sector companies in finding work for beneficiaries.

    The party says it has serious reservations about paying private organisations for getting people off welfare.

    It says while fine in principle the party's not convinced sufficient safeguards are in place to ensure private providers will actually get young beneficiaries into jobs.

    New Zealand First cites the case of the company A4e in Britain, which defrauded the system, and says it should serve as a warning.

    Photo: NZ Herald

    1. I read that. It may well be that other countries see what's happening here as a warning.


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