One of our commenters broke the news yesterday, but now we have confirmation and the details in the Guardian. A4e has pulled out early from a £17m contract to provide prison education (OLASS) in 12 London prisons. The contract had almost two more years to run, so we can assume that pulling out has cost the company dear. But it claims that it couldn't run the contract at a profit. Without any more details from the company, there is speculation that the reason is that overcrowding and under-staffing in prisons is resulting in prisoners being unable to attend classes, and this impacts on the private companies which are paid according to the number of classes they run. To add to A4e's embarrassment, the contract was initially delayed by the extended audit of its activities which followed fraud allegations. And, as the Guardian points out and as we reported at the time, it's not the first time A4e has done this. In 2008 it pulled out of 8 OLASS contracts in Kent prisons because it was making huge losses. It had then severely underestimated the costs of providing a pension scheme for the professional teachers it took over from the previous providers. Presumably it factored all that in to the London bid.
Maybe it's an indication that A4e now can't withstand the losses it might once have absorbed. It adds to the sense that this is a company in trouble.
Yet another example of profit first, people (a long way) second. Summarises not just A4e but the entire privatisation of public services.ReplyDelete
Yes, I think it may well be a strong indicator that A4e is in trouble, which isn't surprising given that it was millions of pounds in the red when it published its annual accounts a few months ago. I wonder what opportunities for employment with A4e there might be now? In recent months I had noticed that a large percentage of jobs working for A4e were actually tutor positions in prisons. Anyone who took up one of those prison tutoring jobs will now be facing unemployment- I just hope they don't end up on the Work Programme with A4e because that would really be rubbing salt into the wound.ReplyDelete
Probably not. Education has to continue and usually the staff are TUPEd across when a contract changes. In this instance someone will have to take over; even if it's HMPS for now, so staff should retain their jobs.......Delete
Will they have to pay a penalty? I am sure when the DWP pulled the plug on the Programmes before the start of the WP Millions were paid to the Providers.ReplyDelete
On the bright side maybe Emma will feel the brunt if A4E goes tits up!
As I said, pulling out will have cost the company. It always does.Delete
Watch the language.
The failure of A4e highlights why private sector involvement in the public sector does not work. If they cannot make a profit they quickly disappear, proving that they have no concern for the welfare of the people they are supposed to help but only for the interests of their greedy, selfish shareholders. Worse, it is the taxpayer who foots the bill, so we lose out in two ways: one, it is MORE expensive and two, we get a WORSE level of service.ReplyDelete
The only people who benefit from public sector outsourcing are sub contractor directors (like Emma Harrison) and Ministers and MP's who become directors of such companies.
The whole process is bent.
This goes beyond private sector. I work in a prison and this problem is affecting all of us. Prison staff have now the duty to relocate to support understaffed prisons. Just as an example of a conversation I had recently.. you can have a Manchester prison officer in Norfolk to support a prison in Norfolk when at the same time you can have a colleague from Norfolk in Manchester. You have staff shortage in almost every prison and talks are all about "we know we are struggling but how can we support other prisons?". Senseless behaviour by people who have been left with no choice but to stretch themselves risking their safety and the people they are supposed to protected.Delete
When companies depending on the number of prisoners attending the services they provide to get paid are left with a few service users because prisons don't have enough staff everyone suffers.
If A4E are having financial problems,perhaps they should ask for advice from the Professionals at Money Advice Service!ReplyDelete
FWIW, I suspect that only the largest of the outsourcing companies (eg G4S, Capita etc)ReplyDelete
can afford to absorb the financial losses forced on the companies by the present government’s errors A4E is not large enough to absorb whopping losses. Atos probably reached the same conclusions as A4E, I suspect.
Do the OLASS contracts come under the aegis of the MoJ rather than the DWP or the DfE?
SFA Skills Funding Agency and MoJ dictate the rules.ReplyDelete
They've also withdrawn from another major (and highly controversial) outsourcing tender.ReplyDelete
They may be the canary in the mine, but I suspect Judi is right - the genuinely big players can afford to stay in the game until they've driven everyone else out of the market - and demolished the public sector.
Which tender is that? Can you tell us more?Delete
I'm guessing too, but I can only think of one highly controversial outsourcing contract in the pipeline.Delete
More importantly than exposing the already known inadequacies of A4e, this evidences the intrinsic flaw of the PBR model. 'Results' cannot be gained (and paid for) by the contractor (here, A4e) if the contracting party (here HMPS) is unable to provide the conditions that will enable for results to be achieved (here, learners in classrooms and getting exam qualifications).ReplyDelete
Absolutely, but also now that OLASS 4 profits depend on qualifications clocked up, prison education is turning into a sausage factory with every opportunity for quick wins being explored, rather than dealing with individuals with specific needs. I work in prison education and it's now very demoralisingDelete
Sfa is contractor, hmps receives the service, therein lies the problem for any provider since hmps is not paying for the service it doesn't care.Delete
Manchester College are taking it overReplyDelete