That's it, then. A4e sold

Yes, it's confirmed (and thanks to my correspondent for the early tip-off).  A4e has been sold to Staffline Group for £34.5m.  The story is here.
Staffline has acquired the entire issued share capital for £23.5m.  That's almost £20m for Emma Harrison, who owned 85% of the shares.  There are more complications, but that's basically it.
Staffline reckons A4e is a "profitable, cash generative business" and the acquisition is good for the company.  Remember that all that cash is straight from the pockets of tax-payers.
A4e's staff have been told by email this morning about the deal.  They now face waiting to hear about their future.  Andrew Dutton and the entire group board will also be looking for work.

A4e's year

2012 has been an eventful year for A4e.

 

There have been changes at boardroom level.  Roy Newey went early in the year; he was the director who travelled round the world selling the company's services.  He remains an advisor to the group board, and a small shareholder in the company.  Also gone is Jo Blundell, the director who was, briefly, the face of A4e for Flexible New Deal.  She has formed something called "futurepublic" (capital letters for proper nouns are unfashionable), advising outsourcing companies.  Matt Stevens came in as Chief Financial Officer.  David Blunkett MP ceased to be an advisor at the end of October.  The biggest change, of course, was the departure of Emma Harrison as Chair of the company.  She still owns 85.1% of the shares, but her role on the Board has been filled by Sir Robin Young as Non Executive Chairman.  Mark Lovell is Executive Chairman (and owns 6.5% of the shares) and Andrew Dutton is CEO.  Jonty Olliff-Cooper is Director of Policy and Strategy but not a board member.

The year seemed to start well, with Harrison riding high as the government's "families champion", rolling out her scheme to pilot local authorities and put forward by Cameron as the solution to all our social problems.  That all came crashing down with the revelation that she had received £8.6m in dividends in the previous year.  When the Daily Mail in particular got its teeth into that, tearing into her for days on end, she was forced to stand down from her government role and from the Chairmanship of A4e.  Drawn into all this terrible publicity were the allegations of fraudulent activity along with persistent failure to meet targets.  A4e's reputation could hardly get any worse.  Expensive PR consultants were brought in to repair the damage.

It didn't help when A4e was told by the Advertising Standards Authority that it could not describe itself as a "social purpose company" since this could mislead people into thinking that it was not a profit-making business.  The response was somewhat petulant.

The focus for the media was always on the Work Programme and its predecessors.  A leak of A4e's performance data to Channel 4 News showed that, after about 8 months, the results were terrible.  Another leak of the full first year figures confirmed the worst, but the leak was also the occasion of Emma Harrison's re-emergence for what was to prove a disastrous interview, for her and for the company.  It was a set-back for the rehabilitation process.

What about business?  It has been a lean year for new contracts.  The OLASS prison contract was delayed by concerns over A4e's record but started in November.  And that's it.  International business seems to have shrunk.  There was a point when A4e bragged about operating in 11 countries.  Now it's 5, not counting the UK, and of those one, Spain, hasn't actually yielded any contracts yet.  We will have to wait a long time to see how all this has impacted on profits.  The Work Programme hasn't contributed anything to profits in its first 14 months, but doesn't appear to have caused losses.

Perhaps it's a sign of wanting to create a new image, but A4e has a new website.  It's a lot cleaner and less fussy than the old one.  The slogan - "Improving people's lives" - is still there, but less stridently.  All those blogs are gone, and the grammar is a lot better.  Maybe it's an indication that A4e will become just another outsourcing company in 2013.  Personally, I'd like to see the whole business of outsourcing shrink drastically.

 

My thanks to all those who have followed this blog in 2012 and contributed to the debate.  I wish everyone, whatever their circumstances, a good Christmas.

What next?

The dust has settled on the Work Programme publicity.  Amazingly, the spin failed and the right information got the headlines.  The government had delayed as long as it dared so that it could put out 14 months of figures rather than 12.  The 12-month outcome figure was around 2%.  But even the 14-month figure came out well below the dead-weight figure.  Who would have guessed that the media would actually be talking about the dead-weight figure?

But this blog is supposed to be about A4e.  So what has all this meant for them?  Their results were not outstandingly bad or good, so they weren't singled out.  Channel 4 News were able to resurrect that Emma Harrison interview to show how wrong she was.  And A4e could really have done without that.  After the crisis of February, when she had to step down from her government post and from the chairmanship of A4e, George Bridges of Quiller Consultants was called in to use his connections to get the company through the mess.  Harrison's appearance will surely have set back those efforts.  But more important in the long run is that the company itself cannot hide behind platitudes.  The failure of the Work Programme puts it under scrutiny.  Andrew Dutton writes: ".... our current performance is materially better than the first year data shows".  Like all the other providers, the claim is that more outcomes are in the pipeline and will show up in the next release of data.  But that was always going to be the case.  He adds that "A4e has invested £50m in the past 18 months into our services, people and offices."  This is what Harrison said was her own money.  However, other providers claim to have broken even in the first year of the WP, so we can assume that that investment has been recouped.  They have a curious set of graphics on their website.  The figures include a claim that they saved the taxpayer £24m in benefits paid to people who now have jobs.  They do not indicate whether this figure takes account of in-work benefits which people still have to claim.  And does it take into account the amount the government has paid A4e?  Anyway, figures like these mean little; it's the experience people have of the company, and its performance in doing the work it's contracted to do which count.

A different company?

Andrew Dutton says, "A4e is a different company from what it was two years ago."  Is it?

 

Obviously the disappearance of Emma Harrison as its figurehead has made a difference.  She's still the owner, but is no longer the face of the company.  Indeed, it doesn't have a face any more.  Other top people have gone as well.  So maybe the ethos of the company has changed for the better.  But that can only be judged from the outside by its clients and from the inside by its staff.  And neither seem impressed by any perceived change.

Bearing in mind that A4e is not all about welfare-to-work, it's that area which most people experience.  For staff, the pressure to achieve targets is as great as ever - more so, say some people.  They've moved to "team incentives" for what are considered unachievable targets.  They have to put pressure on clients from the outset.  We were told back in June that caseloads were unmanageable.  Now we hear of people having to wait seven weeks from their referral phone-call to their first appointment; and then of clients given no individual attention.  We don't know whether this is because the number of referrals is much higher than expected or because the required staff and facilities are not in place.  

Then there's the pressure to punish, or "sanction", every perceived failure to attend.  Jonty Olliff-Cooper over on Twitter is insisting that A4e don't sanction people, it's the DWP.  This is disingenuous.  A4e files a "DNA" (did not attend) with a single mouse-click.  They can also include an explanation when there's a good reason for absence.  These go up to a central office which passes them on to the DWP, sometimes leaving out the explanation.  And, of course, there can be mistakes.  Before the WP, clients had the chance to appeal before their income was stopped.  Now they can't, and there are some very angry and desperate clients.  

The answer to all this, according to Olliff-Cooper, is "mystery shopping, customer panel, forum and visits".  It sounds just the sort of thing people come up with in those awful meetings where you're supposed to be brain-storming; I can imagine the flip-chart sheets pinned up around the room.  It's something you can't see Harrison contemplating.  But "mystery shopping" is a non-starter, and is no substitute for the Ofsted inspections which the providers persuaded the government to drop.  A customer panel is similarly irrelevant.  A forum could be more interesting; but it would have to be pro-actively moderated, and I doubt very much that A4e could resist the temptation to moderate out everything critical or hostile, as they have always done on their websites and blogs.  The plans could easily end up being entirely cosmetic; intended to improve the image of the company rather than the way in which it works.  After all, if you believe that you head "a different company", why would you think anything needs to be changed?

And then, of course, there are the results.  In those areas where A4e's results can be directly compared with those of other companies they have not done significantly worse - or significantly better.  The fact is that almost all of them have failed to come anywhere near the results they promised in their bids.  Will those results now improve?  It didn't look like it from those leaked A4e figures.  But we don't know because the DWP refuses to tell us.  

If A4e wishes to be just another outsourcing company, it has that opportunity.  The very fact that it's allowing J O-C's antics suggests it isn't there yet.

The PAC's report

The Public Accounts Committee has published its report into the Work Programme, and there's a lot of disapproval in it of the way the DWP fails to oversee and manage its contractors properly.  The Press Association has the basic press release.  In the case of A4e, they say, the DWP didn't obtain the 2009 internal audit report which showed alleged fraud and malpractice.  The subsequent enquiry into A4e resulted in one cancelled contract but did not address the wider question of whether A4e was a fit and proper company to have any such contracts.  If it hadn't been for whistle blowers, says committee chair Margaret Hodge, a range of issues would not have been addressed at all.

As we reported last night, the report does not include the evidence of those whistle blowers, who asked for it to be pulled at the last minute.  We don't know why, but we can guess.  The Independent publishes some of Eddie Hutchinson's evidence which was leaked after the committee meeting.  In another article on the report itself, the Independent reminds us that one of those whistle blowers "who had worked at A4e told how she had been asked to 'fix' files to suggest that people had successfully found work".  The DWP repeats the mantra that it all happened under Labour's programmes and couldn't happen now.  She also says the the enquiry into A4e is on-going.

The BBC news website has an unusually long piece.  It includes Hodge's concern that "The design of the programme still allows for the possibility of providers being paid for finding work for people who found the jobs on their own".  It also includes an attack by Iain Duncan Smith; he had asked senior Labour figures, including Hodge, "to reveal advice they received about fraud during their time in office".  Some hadn't even replied.  Like the Independent, the BBC reports, though briefly, Andrew Dutton's response.  They have strengthened their controls, etc., and "we are now openly calling on MPs, business leaders and employers to come and see for themselves the work we are doing".  Interestingly, the BBC uses as a graphic an old clip from A4e's website which still describes it as a "social purpose company".

For the whole of Dutton's response see the WallStreetonline site.  This begins with the central message that A4e wants to get across:  "A4e is a different company from the one it was two years ago".  Many of us are yet to be convinced.

Shell game?

Is A4e unusual in having a maze of companies, most of which seem to serve no useful purpose?  

• The parent company, the one we all think of as A4e, is A4e Ltd.
• We looked at Action for Employment Trustees Ltd; directors Emma Harrison and Mark Lovell.  It's wholly owned by A4e Ltd and its purpose seems to be simply to hold shares in A4e Ltd - 7.1% of the total.
• Then there's A4e Employee Trustee Ltd.  This was set up in March 2012 as All Employee Company Ltd, but changed its name in May of this year.  Its director is Steve Boyfield, one of A4e Ltd's directors.
• A4e Fundraising Ltd was in existence from 2003 to 2009.
• A4e Consult Ltd was set up in 2006 but has morphed into A4e Management Ltd.  Its directors are Andrew Dutton and Mark Lovell.  (Emma Harrison ceased to be a director in February this year.)  The company's 100 shares are all held by A4e Ltd.  Various directories give its purpose as career advice or the like.
• Two other companies were set up in 2011.  They are A4e Europe Ltd and A4e Worldwide Ltd.  The sole director of both is Andrew Dutton.  A4e Europe's one share is held by A4e Worldwide.  A4e Worldwide's one share is held by A4e Ltd.

Some of these would appear to fit the definition of shell companies.  Perhaps this is normal practice.  Perhaps it makes perfect sense to a tax accountant.

Interview with Andrew Dutton

The Telegraph has an interview with Andrew Dutton, A4e's CEO.  It gives him the opportunity for some PR for the company but leaves unanswered the really important questions.

On Monday, says the article "a group of MPs is due to question DWP ministers on their handling of fraud allegations across the welfare-to-work industry, not just at A4e, suggesting the problem runs deeper than one firm."  Dutton wants to repair A4e's reputation and is keen to stress that "the issues we’ve faced are genuinely market issues – there’s been 126 investigations into the whole market. We’re not alone.”  The estimated cost of all the fraud is £773,000 but A4e accounts for only 9% of that.  "The silver lining, Dutton says, is that A4e now has a competitive advantage.  'My business has been completely audited. The other organisations can’t say that,' he says."  Part of the PR operation is to invite MPs and "opinion formers" into A4e's local offices.

Reading thus far, one begins to wonder whether the writer of the article, Louisa Peacock, is ever going to challenge Dutton on the real issues.  "A4e obtained jobs for 310,000 people last year," she says, "and it clearly wants to promote the figure, although Dutton does not say how many of those are still in work."  Note the phrasing.  Not "310,000 people got jobs".  The credit is all A4e's.  Some way after that we read, "Still, a damning report from the spending watchdog last week showed up to £1bn of taxpayers’ money was being spent on finding jobs for people who would have found work without help."  Peacock doesn't use this to challenge Dutton's earlier statement (nor does she pick up on the nonsense in that sentence).  Perhaps she only did the research afterwards.  Towards the end she says, "As far as is possible, it is business as usual for A4e."

It's all very helpful for Dutton and the company he runs.  But it leaves out of consideration the other allegations against A4e, about the way it treats its clients.  Business as usual indeed. 

PS.  This article was put on the Telegraph's  website at about 6.00 pm on Saturday.  By 11.45 pm it had been shortened and retitled "A4e seeks details on 'secret' frauds".  Interesting.

And yet more contracts

Thanks to the Richmond upon Thames Liberal Democrats for this story.  Richmond upon Thames council, like a lot of other local authorities, funded the Council for Voluntary Service (CVS) to support and train people in small, local voluntary organisations and charities.  The CVS branches usually consist of paid professionals helped by volunteers.  They are probably not experienced in drawing up bids for contracts to do the work.  So when Richmond Council, led by Conservative peer Lord True, decided to put the work out to contract for £85,000 the CVS lost - to the Foundation for Social Improvement (FSI).  Not A4e - or not quite.  The FSI is the creation of Emma Harrison and has received £1m from A4e.  Harrison is Chair of the Trustees (although the piece on the website about her doesn't mention A4e) and two other A4e directors, Jo Blundell and Andrew Dutton, are also trustees.  It's a registered charity, and it was originally about helping small charities to raise funds.  Now it is obviously using the bid-writing skills of A4e; it is based at A4e's Westminster offices, so it would be silly not to.  As Lib Dem leader on the council, Stephen Knight, says: "It beggars belief that Richmond council is intent on handing a contract to the A4e group of organisations, while the government and police are investigating evidence of widespread fraud and mismanagement. Local residents will be shocked that the Tories are intent of pulling funding from the local Council for Voluntary Service and instead handing a contract to a scandal-hit organisation based in Westminster."

There's an interesting piece on the Morning Star website (scroll down) headed "A4E isn't always terrible. Sometimes it is just mediocre."  A4e was hired to train 30,000 childminders in 2004, and the writer has got hold of an evaluation of the contract carried out by consultants PriceWaterhouseCoopers.  It's not good.  In fact, it's pretty grim.

Most of the newspapers have reported the story we took from Exaro yesterday about A4e being the preferred bidder for another contract, to run the Equalities and Human Rights Commission's helpline.  The Daily Mail takes the opportunity to re-run its previous graphics on A4e, but also quotes Margaret Hodge as saying: "This belies common sense.  There are so many question marks about this company’s competence and integrity that I can’t believe any government department is thinking of signing another contract with them.  The Home Office should hold off from making any decision until the investigations have been completed."


PS.  I read the latest Private Eye after posting the first paragraph above.  They have the story; but they also show that A4e used the FSI to help win the Work Programme contracts - the "bid candy" which the charities claim they became for the prime providers.  The Eye has also set its sights on another prime, Working Links, recalling a leaked "compliance visit" report last year which showed that Working Links in Liverpool had made 85 claims for outcomes which it was not entitled to. 

Keep Calm and Carry On

The Independent on Sunday is the only paper today keeping the story going.  "Further No. 10 link to A4e" says the headline, linking the departure of Cameron's advisor Steve Hilton with the appointment of Harrison as "families champion".  Hilton recommended her, they say.  And they describe the £250k contract given to A4e last September.  "A4e is advising No 10 on the next wave of privatisation. It will offer advice on "value for money" in contracting out, including writing guidelines on future privatisations. The firm will hold a seminar in Whitehall explaining how to design welfare contracts with private firms. .......... The Cabinet Office hired A4e to advise on four experimental schemes to help families with unemployed parents. All are in Conservative-led authorities: Hammersmith & Fulham, Westminster, Birmingham and Leicestershire.  A4e is not running the schemes, but is helping the Government write the rules on how they should work. They are based on social impact bonds, the Government's 'big idea' for privatising welfare. Investors and banks will pay private companies to help poor families. The taxpayer will then pay them back over years for the supposed 'savings'.  A4e is being asked to advise how to stop welfare firms taking money for poor performance. Yet A4e has often been found to be a poor performer itself."  

 

When A4e's main website went down recently there were some of us who felt that it was the result of a decision to revamp the site as part of an image makeover.  But no.  It's back, with no changes.  Even the link to "Emma's blog" is there on the home page, even though it hasn't been updated since last November.  Andrew Dutton has posted a response to the various accusations, and he ends with a note on "A4e and Emma Harrison".  "As a result of Emma Harrison’s resignation, announced on 24 February, she is no longer a Director or Chairman of A4e which means she cannot participate at Board meetings. The governance of A4e has therefore changed with immediate effect and decisions relating to future dividend policy will be determined by the Board under a new, independent non-executive Chairman. In addition, Emma’s salary as Chairman and Director and payments made by A4e in respect of Thornbridge Hall have ceased."  So who made the decisions about dividends before?  And that last bit about Thornbridge Hall is interesting.  The Board are really seeking to distance themselves from the woman who still owns most of the company.

But back to the websites.  The MyA4e site looks like something designed by professionals who have no clear idea of who their target audience is.  One could say the same about the multitude of other sites set up by A4e.  There's A4e Voicewhich is a blog for good news items.  The latest, posted on 2 March, is aimed at refuting the criticisms of A4e for using clients in work experience roles in its own company.  Then there's A4e Transitions which is an arm of the company which provides services to companies which are making lots of people redundant.  Very different is A4e Careers which apparently seeks to recruit people to work for the company.  It's a mess, with cartoons, handwriting-style fonts and all the familiar slogans.  Much more sober is the Direct payments for social care site.   Eleven local authorities contract with A4e to deliver this service.  Then there's A4e Skills which is "the direct delivery arm for vocational learning, delivering Apprenticeship programmes, work based learning (QCF & NVQ's), in-house training and vocationally related courses, accredited courses including e learning courses.  Most training takes place within the workplace, working flexibly to meet the needs of both organisations and individuals."  Finally there's A4e Insight,  their "research and consultancy arm".  This is where the line between private company and public sector becomes dangerously blurred.

 

I've almost certainly missed some of A4e's numerous websites.  But what they show is a confusion about image, despite the vast amounts of money A4e has spent on PR over the years.  Will the aim now be to shun the limelight, stop provoking the natural response to hype, and just buckle down to making money?  

 

By the way, Emma Harrison is a trustee of the Eden Project, which is currently having to lay off staff because of financial difficulties.

Changes

Let's not get carried away.  Emma Harrison is no longer Chair of A4e, but amidst all the media coverage only two papers point out that still owns almost all of the company.  If she hangs on to those shares she can still continue to make a great deal of money, if not from the Work Programme then from all the other contracts.  The Financial Times quotes Jim Carley, a consultant to the outsourcing industry, saying that she will probably want to sell if she's not involved any more, and that A4e is "one of the few companies out there that is still buyable". 
Andrew Dutton, A4e's CEO, is putting in place a review of the whole company and its processes by a top law firm.  Talking of the fraud allegations, the Telegraph has a mysterious paragraph: "Sources said police are aware of allegations that the fraud went higher up the chain of command than the four front line staff that have already been arrested, although not to the top of the company."  The Telegraph reckons that there's more to emerge over the weekend.
Maybe.  But the Daily Mail is quite hysterical.  They put online two articles.  The first claims the credit for her departure: "She resigned as chairman of A4e four hours after the Daily Mail warned  it was to publish claims of 'rife' corruption at the employment firm."  It goes on: "A whistleblower claimed that champagne was lavished on successful staff while forged signatures and blank timesheets were ‘routine’ techniques used for bumping up the numbers of successful job placements."  The second article details those allegations, giving five minutes of fame to ex-employee Tracie Spiers.  She describes what anybody in the industry would see as a mixture of poor practice, incompetence and deliberate fraud.
A4e brought the techniques of sales teams to the business, completely inappropriately.  Some staff are actually on commission, getting paid for every job outcome.  There are prizes for successful teams; from the champagne described in the article to holidays.  This pressure can lead to the fraud of forging signatures on job outcome forms.  The interests of the clients have vanished.  The forging of timesheets smacks of sheer incompetence.  It was perfectly possible to devise a system for getting those timesheets updated daily and signed off on Friday.  Failure to do that leads to fraud.
In the past A4e has been quick to threaten whistle-blowing staff with legal action.  The tide of such allegations may well be unstoppable now.
A4e will certainly change.  The cult of personality will go, for one thing.  But Dutton will have to look at changing the whole ethos of the company, with good staff training and better management.  We will have to wait and see.

Emma gets the Daily Mail treatment

The unemployed are used to it.  Being demonised by the Daily Mail is something you have to put up with if you're out of work.  But today the paper turns its fire on Emma Harrison, following the Public Accounts Committee hearing.   "Fury as families tsar gets £8.6m in one year (and the bulk of it comes from taxpayers)" is the headline.  And the focus is on money.  She "pocketed £8.6m", which was up 300 per cent on the year before".  Margaret Hodge is quoted as saying it's an outrage.  There's an insert on Thornbridge Hall, her home, and we're told that, "She is now worth an estimated £70million, putting her at 968 on The Sunday Times rich list. A4e is worth £80million, with her stake put at £68million."  There is then a write-up of the committee's proceedings, and the response of Andrew Dutton.  The article has no less than 4 photos of Ms Harrison, a signal that they're targeting an individual.  Last night A4e put out a statement saying that their performance was better than the industry average.  


I doubt it will bother Harrison too much.  Two days ago she was at a charity reception at 10 Downing Street.  And don't they say, "all publicity is good publicity"?

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.

Andrew Dutton - and those "workshy" figures

Andrew Dutton, A4e's group CEO, has written a piece for Director magazine which deserves careful scrutiny.

He starts by saying that "Businesses have a moral obligation to get the long-term jobless back into work", and continues that it disappoints him "that there is a genuine view that the unemployed are workshy and feckless. They simply are not." Good. I couldn't agree more. How has that perception come about, I wonder. But, according to Dutton, firms which have an online application process automatically filter out unemployed people. That's chilling if you're desperately looking for work and being told that you have to make a minimum number of applications. "Directors tell me," says Dutton, "they have a bottom line to hit and because they need the best people, dipping into the unemployment pool isn't what they want to do." So far, we can applaud his honesty. He is exhorting companies to shed their prejudices and work with A4e to "cut their costs of acquiring new employees and be more certain about getting someone who is more culturally aligned to the business." (I'm not at all sure what that last phrase means.)

But there's a paragraph which is questionable. "While it is true often that the long-term unemployed have barriers that do need to be overcome – confidence, low self-esteem, mental health or childcare issues –companies like ours clear those obstacles long before candidates go in front of an employer." How often is often? It is true that a good advisor can motivate people who have lost confidence; but what can they do about mental health issues? As for childcare - well, Hayley Taylor, who learned her trade with A4e, recently advised someone who was worried about childcare that she should never mention this to an employer and worry about it only when she was offered a job, at which point relatives and friends would step in to help. Perhaps that's how you clear the obstacle.

Dutton is straightforward about the fact that A4e is a business, not a charity, and describes the payment model. He wants employers to demonstrate some corporate responsibility and start employing the unemployed. No one could quarrel with that. But at the coalface, as advisors try to get people into work (are they still on commission for job outcomes?) doesn't it reinforce the suspicion that providers have every reason to focus on those who have been unemployed for the shortest time? And what mention is there of "upskilling"? The longer someone is out of work, the more outdated their skills and experience become. Unless A4e and the others are prepared to fund relevant training Dutton'e exhortations will probably be ignored.

Back to that piece in the Daily Mail and the Express which stated that 50% of claimants had signed off or not turned up for MWA and justified the description of "workshy". The FullFact website has examined this claim. The DWP told them that it hasn't released any figures. The only attribution is the Mail's "a source close to the programme". So it's worthless and malicious propaganda. Surprise, surprise.

Engaging with employers - and housing

An interesting piece in the People Management magazine, which is for HR professionals. CIPD chief executive Jackie Orme wants firms to think about how they can engage with the Work Programme, and she says that "there are solid business reasons to give opportunities to people who have previously been excluded by the labour market." This comes before a "round table" event involving Orme along with Chris Grayling, A4e's Andrew Dutton and a number of large employers. The piece doesn't say who convened this meeting or why, of the providers, only A4e is represented.

If it's such a good thing to employ people who have previously been excluded, one wonders why employers haven't thought of it before. Still, it's got to be a good thing if it results in people getting jobs. But one note of caution; does this mean that providers, in competition with each other, are signing up companies to offer preferential interviews to their clients? If so, how transparent will that be? There are some interesting implications here.

A4e's Jonty Olliff-Cooper has been at another round table, this time with Moat, a "social housing" provider. Now, I'll resist the temptation to rant about the pernicious concept of "social housing"; but the fact remains that around 60% (it may be more by now) of tenants in council or housing association properties are dependent on benefits. Olliff-Cooper says: “At A4e, every customer journey from welfare into work starts with a discussion about the breadth of problems they may face, not simply the status of their employment. We know, from the work we do every day, that housing is a concern for a significant number of people out of a job; given the changes in the sector for provisions in both employment and housing, it’s our responsibility to help make both of these things as accessible – and stable – as possible. Discussions with our partners and colleagues, like today’s roundtable, are an invaluable step towards achieving this, and helping improve people’s lives.” Is this, perhaps, the start of contracts between A4e and housing associations?

Work Programme starts

Loads of publicity today for the start of the Work Programme, most of it ill-informed. The BBC's Today programme on Radio 4 made a complete mess of it, with a dreadful interview of Chris Grayling by John Humphrys and then a brief discussion between a chap from the Work Foundation and one from CDG.

The print media are scarcely any better. As you'd expect, the Express leads with "A crackdown on benefits scroungers will be launched by ministers today" and continues in the same ignorant, not to say demented, vein. The Mail is actually rather better, but it loves the idea of "recruiting former Army officers to help instill discipline into young jobseekers".

The Telegraph takes a different line. Its writer, Louisa Peacock, asks how the scheme can succeed when it "is being delivered by the same old providers". She points out that PriceWaterhouseCoopers pulled out because it didn't think the scheme was financially viable. "If the same old providers haven't found a solution to this by now, what on earth can be different in this 'step change' of delivery?"

The BBC news website quotes A4e's Andrew Dutton, who "said it would look at removing the barriers that had been keeping people out of work. 'They [sic] may be debt issues or housing issues or problems within the family, legal issues around housing, but often very much around supporting them to really gain confidence,' he told the BBC."

The Guardian is thorough and balanced. Its writer, Patrick Wintour, cites the concerns of the Work Foundation "that in areas of Britain with the highest unemployment and fewest job vacancies, contractors will struggle".

Chris Grayling had an easy time on The Daily Politics. But when asked about the concerns that providers would focus their efforts on those areas of the country with the best job prospects, he said that there had been intense bidding and competition for all areas from the providers, so he was confident that wouldn't happen. The interview ended with a question about why the private sector was going to be better at this than the public sector. The answer was purely ideological.

Andrew Dutton and income

We're used to A4e sprinkling PR stuff all over the internet, but this piece is unusual in that it names Andrew Dutton as the "mastermind" behind A4e's growth to "an international, £250m-turnover powerhouse". The piece is in question-and-answer form, and Dutton has all the right phrases (like "social purpose company"), but there are some interesting figures. He says that welfare-to-work contributes 60% of their global revenue, but they have diversified into various other areas. He'll get some applause for saying, "Over 90 % of the people we come across want to work and have a job. They see it as part of what gives them identity. There is a tiny minority of people that sees being on benefits as a lifestyle. They are few and far between. But it's also part of our job to persuade those people that working has more benefits to staying at home. I do not subscribe to the view that a large proportion of our society is happy to sit on benefits." And in talking about competitive tendering he says that "the contracts currently under tender are worth £3-4bn collectively. Two years ago, competition was stiff but there was a multitude of relatively small players. We now turn over a quarter of billion pounds a year." He cites India as the biggest growth market for A4e, and is interesting on the subject of bringing in outside investment and the possibility of floating the company on the stock market. "The ultimate plan is to be a half-a-billion-turnover business by 2014, and generate revenues of £1bn by 2020. Being privately owned, we can take a long-term view. How we do that in terms of equity structure is still up for debate. I do know we'll have to open up the company to enable that level of growth, so we'll never rule out the option for an IPO."

So all this competitive tendering has, in reality, driven out the competition.

Now that the government is publishing a complete breakdown of its monthly spending we can see just how much A4e is getting at this site. I started to tally up how much they'd been paid already this year, but decided that life was too short. Suffice it to say that it's a lot!

Jobs, failures and volunteers

Some snippets of news today. First, A4e has a new Group Chief Executive, replacing Bob Martin. He is Andrew Dutton, who is currently Executive Director for A4e’s International Business. He has been with A4e since 2007, coming from a medical services business and, before that, from Vertex, one of the biggest outsourcing companies.

The Commons Public Accounts Committee has reported on the Pathways to Work programme. You may remember that the committee grilled A4e's Steve Marsland and Reed's Chris Melvin on why results had been so poor. Now the Chair, Margaret Hodge MP, says that Pathways "was not well implemented and has had limited effect." The committee's report said "the performance by the mainly private sector providers has been universally poor in relation to their main target group, those people who are required to go on the Pathways programme". The providers are accused of cherry-picking clients but still only reaching a third of their target figure. The saddest aspect of this story is in the last paragraph: "Employment minister Chris Grayling said: 'This report is hugely disappointing and just underlines how misplaced many of the previous Government's labour policies were. They just never got to grips with the challenges of getting people back to work.'" A political point, rather than facing the real implications. And this will have no impact on future contracts, so A4e and the others who failed needn't worry.

We've mentioned once or twice that A4e advertises for volunteer "mentors" to work with the unemployed. Now CDG, a rival provider, has gone a step further. The Indus Delta site reports that the company wants "an expert volunteer corps" of people with the necessary skills and experience to "complement the work that welfare to work providers such as CDG and the government undertake." Has CDG stolen A4e's thunder? "CDG is a dynamic charity that seeks to help those who are unemployed find and sustain meaningful employment" says their website. But like other such third sector organisations they have contracts from the DWP in the same market as the private companies. It is hard to see how large numbers of volunteers can be recruited to assist these companies in making money.