Everything must go

The government is in a desperate hurry to sell off whatever it can of the remaining shreds of the public sector.  Yesterday it announced the winning bidders for the Transforming Rehabilitation contracts, that hugely dangerous outsourcing of probation services.  As we can see from the Guardian's report on this, two companies get more than half the business.  Sodexo gets six areas, Interserve five; of the rest of the 21 areas, Working Links gets three and Ingeus two.  All have signed up charities to do the work.  Between them they will handle more than half of the probation service work, with supposedly medium and low risk offenders.  Their profits will be on a payment by results basis, albeit under a more complicated system than that of the Work Programme.  G4S and Serco had to withdraw their bids because they are still under investigation for fraud.  A4e, we understand, also withdrew from the process.
It's bad enough that such we have to watch this vital work flogged off for private profit.  Worse is the fact that the companies' profits have been insured against a new government pulling the plug on these contracts.  They are guaranteed their expected profits for 10 years!  So it would be ruinously expensive to cancel them.

We also heard yesterday of the company replacing Atos in the WCA contracts.  It's Maximus, an American company with as dreadful a record in the US as G4S and Serco have here.  For details, look at this piece on the Disability News Service site.  We can't know the financial arrangements that brought Maximus into this, but we should.

We learn from the Guardian that the government is pressing ahead with another disturbing outsourcing scheme; that of child protection services, currently the responsibility of local councils.  A lot of people are not aware that private companies already run children's homes, looking after the most vulnerable children for profit.  Now the government wants to take child protection out of the councils' hands altogether.  It might be thought that, given the stream of news recently of councils' failings in this area, it couldn't be any worse.  But councils are accountable for what they do.  Private companies just want to make a profit.

You will have read today that the government has considered cutting ESA to only pennies above JSA level.  It denies that it's actually going to do it, and the cries of protest will probably stop it this side of an election.

Down the drain

With all that's going on, who is taking any notice of outsourcing?  Even the galloping privatisation of the NHS receives no attention from the mainstream media.  It's down to the "left-wing" papers to bring the occasional bit of news to our attention, but unless you read Polly Toynbee's excellent article in the Guardian back in May you would have little idea that anything significant was happening.
We don't know the situation with A4e, but the chances are that its finances haven't improved much, if at all, since March 2013, the date of the last published accounts.  And they're not the only ones in trouble.  Both Serco and G4S have gone into the red, and the publicity is all negative.  Quite right too; think of those electronic tagging contracts which both companies used to rake in money they weren't entitled to.  They've had to pay it back, but there have been no prosecutions.  Why?  For two reasons, I think.  One, that a court case would have exposed the fact that it was government processes which allowed them to overcharge by millions.  And two, that they have become indispensable to government.
Let's go back a bit, to the heyday of the last government when outsourcing became all the rage.  Some companies, like A4e, chose to concentrate on particular areas of business, in their case where the commodity was people.  Others, like Capita, specialised in "back-office" functions, focussing on IT systems and processes.  Serco and G4S both started life as security firms, and cashed in on the bonanza that was outsourcing in that field.  But they soon branched out into anything that was going.  They learned that there are a number of rules to the game:

1. Bid for everything.  That means employing a large number of bid-writers who know exactly how to write the tender.
2. Bid low.  Offer to do the job for so little that not only can you not make a profit but you can't fulfil the contract either.  It doesn't matter.  Just get the contract.
3. Renegotiate.  Having embarked on the job, announce that you need more money to complete it.

So Serco in particular have scooped up contracts for everything from prisons to council call-centres, trains to welfare-to-work, electronic tagging to forensic science laboratories.  How can they possibly know enough about any of these specialist areas?  Simple.  They take over a service that's already being run by someone else and employ their staff (not all of them, of course, got to keep the costs down).
But now they are coming unstuck.  Serco announced a little while ago that it was pulling out of the healthcare market altogether.  This comes after it made a mess of the GP out-of-hours contract in Cornwall and had to hand it back; and now we learn, from the Independent, that it has been overcharging the NHS by millions for pathology services through a firm it set up in partnership with two London hospitals.
But healthcare is just one area.  There are plenty of companies ready to step into that market.  Meanwhile Serco, along with G4S, Capita and the others move on to the next contract.  Sometimes they don't even have to go through the tedious bidding process; contracts are just handed to them.  Often now the whole outsourcing procedure is tailored to the demands of these few companies, making the idea of competitive tendering a nonsense.
If some companies go under, others will step in.  The competition comes now not from UK firms but from overseas companies like Atos, who've discovered just how easy it is here if you know the rules.  And we, who pay for it all, can do nothing about it; we can't even know what's happening because of "commercial confidentiality".  All we know is that it's money down the drain.

Not accountable to anybody

A curious story popped up in my Google alerts the other day, from the Rotherham Business News website.  It reported on the new "Help to Work" programme, then went on to the fact that Rotherham Council had discussed a review into the Work Programme as it operated locally, with Serco and A4e.  The report was particularly concerned about sanctions.  Both companies were invited to take part in the review, in person or in writing, but declined, "with A4e taking the view – based on advice from their Department for Work and Pensions account manager - that it would be inappropriate to respond to the panel's questions."  I'm not entirely sure what a DWP account manager is.  But clearly A4e don't see themselves as accountable to anyone.
The DWP has shied away from investigating another provider, Seetec.  Private Eye broke the story some time ago.  Two whistle-blowers had reported fraud around Seetec's Work Choice contract.  The DWP has now "investigated" and exonerated the company.  But it didn't interview the whistle-blowers, and claimed that it had all the evidence needed in their emails - which contained no detail, just a short summary.  The Eye says that Margaret Hodge is on the case.
It's staggering that the value of outsourcing contracts has risen by 168% in the first quarter of 2014.  It's gone to £2.1bn.  In local government it's up by 60%.  And more than half the contracts are first-time outsourcing deals.  The government wants more.  Private Eye also reported in the latest issue on a meeting held by Francis Maude, the Cabinet Office minister, with bosses from G4S, Serco, Capita and Atos, to discuss "how to develop the government's commercial reforms".  Apparently they discussed "greater openness and trust between government and its suppliers".  But of course, you can't have openness when commercial firms are involved, unless you change the law.  And businesses are lobbying hard to avoid that.
There was an excellent, if chilling, article by Polly Toynbee in the Guardian last week.  Read it and weep.  Even if the Tories are rejected at the next election it will be too late to undo their sell-off of our public services.

ATOS out, but secrets and spin remain

We knew that ATOS were pulling out of their WCA contract, but the terms have now been agreed.  Of course, we don't know what those terms are; commercial confidentiality and all that.  But Mike Penning, the minister, is obscuring matters even further by first insisting that "Atos will not receive a single penny of compensation from the taxpayer for the early termination of their contract.  Quite the contrary, Atos has made a substantial financial settlement to the department," and then, "“They haven’t pulled out actually, we’ve removed them from the contract.  This is not them walking away.”  But "sources close to the company" pointed out that, "People don't usually pay a fine if they've been sacked."  In other words, Penning wants to talk tough and insist that it was the DWP which sacked ATOS, whereas we know that the company wanted out and was negotiating terms.  
The Independent says that the DWP is talking to Capita and Maximus with a view to them taking over the contract, but it's felt that the government is going to have to pay a huge amount of money to get anyone to take it, since it only lasts until August next year.  And Channel 4 News' Factcheck blog has pointed out that the assessments, although carried out by the company, were devised by the DWP.  Will they be changed?  
Atos says that anyone who has an appointment with them for an assessment must keep it, but they won't be making any new appointments.

Work Programme stats, and the PAC

We used to complain that no data was being released on the effectiveness of the Work Programme.  Now we have all the data we could wish for, it seems, in the figures put out yesterday.  You can see the document here.  Some key figures are on the first page, but you'll need to get your calculator out.  If we look at the "by all referrals" June 2011 to Dec 2013, we see that just under 19% of those on the programme long enough got an outcome.  (The Factcheck blog says 17%.)  But then look at how that tapers off, so that only 48,000 people were in work long enough for the provider to claim the full payments.  In other words, the jobs tend to be temporary.  24,000 got 3-6 months of work, but then were back on the programme, and in all 352,000 have finished the WP and been referred back to the jobcentre.  The other key fact from all of this is that while the figures for JSA claimants are considered satisfactory, they are terrible for those on ESA.  For a good summary, read Channel 4's Factcheck blog.  Looking at the breakdown by provider, we see that A4e isn't the worst-performing, but it's a long way from being the best.
Is it worth it?  That's the really important question.  Millions have been paid out to companies like A4e to achieve only a little above what would be expected with no intervention at all (and below that with ESA).  The likelihood is that the vast majority of the jobs are down to the improving economy.  So what's the point?

Other news takes us back to ATOS.  The Public Accounts Committee had a go at the civil servants in the DWP and one of the bosses of Atos over the failure of the new PIPs assessment contract.  The Guardian reported Margaret Hodge's interrogation of Robert Devereux, the Permanent Secretary.  They have crossed swords before, and her questions revolved around the same issues as she has fumed over with the Work Programme.  How can you give a new contract to a company which is in the process of bodging a similar contract?  (My phrasing, not hers.)  He said, "We are making a decision on the bids in front of us."  As he has said before, the procurement process deliberately doesn't look at past performance.  And they did not check that what Atos had put in its bid document was true.  On the PIPs bid, Atos had claimed to have agreements with a large number of hospital trusts and physiotherapy practices, but far fewer actually signed up in the end.  That meant that another claim, that everyone facing assessment would have a centre within an hour's travel time, has gone by the board.  Huge backlogs are building up.  Hodge had a go at the Atos person for misleading the DWP.  But this sort of thing is common with the procurement process which the DWP has shaped.  The big companies must form "partnerships" with smaller outfits, and can then list on their bid documents a number of sub-contractors who have, in fact, signed nothing and can duck out once they see the small print.
It's obvious to everybody that there has to be a better way.

A good budget - for ATOS

Only the Independent has reported this: "Atos given responsibility for new childcare scheme despite previous fitness-for work fiasco."  Yes, the French firm which has performed so splendidly on the WCA contracts that it's handing them back, and which is currently making life impossible for people waiting for PIPs assessments, has the contract to provide the IT for the new scheme to allow people £2,000 towards childcare costs.  What could possibly go wrong?  Atos won't be doing any assessments, we're assured.  But if you take this together with its new contract to extract patient data from GP surgeries (see our post on 26 February) you can see just how ridiculous the outsourcing business has become.

There was nothing in yesterday's budget to give hope to the poorest.  The unemployment figures are worthless, concealing the reality of just how many people are in work and how many are not.  But the measure which we tend to overlook is the benefit cap, the overall limit on spending on "welfare" per year (which Labour supports).  It excludes pensions and JSA.  But it includes housing benefit, tax credits, disability benefits and pensioner benefits.  So while people out of work will continue to get JSA, they could find their housing benefit cut; and those in casual, part-time or zero hours jobs (or in fictional self-employment) could find that their top-up benefits are withering away.


Then there was that poster.  Wherever it originated, the Tory party chairman, Grant Shapps, tweeted it yesterday.  At first people thought it was a parody.  But it wasn't.  And with the hashtag #torybingo it was soon trending wildly, with people having lots of fun playing the game.  A massive own goal for the government!

A troubled week

Mike Penning, the Disabilities Minister, seems to be in the wrong job.  In a debate in Parliament on the mess around work capability assessments, Penning apologised.  Doesn't he know that he's not supposed to do that?  True, he was confronted with the story of Sheila Holt, the woman who was pursued by Seetec and Atos even though she was in a coma.  The sorry tale was originally told by the Mirror on 12 February.  Penning, perhaps, had no option but to apologise; but he's rather letting the side down by doing so.  His boss, Iain Duncan Smith, and his colleague Esther McVey would, I'm sure, simply have brushed the story aside.  He has probably been told that he must not see this as a precedent.  Ministers at the DWP have a motto; never apologise, never explain.
So there hasn't been a peep out of them about another horror story, this time from David Cameron's constituency.  It was covered in the Oxford Mail and headlined: "Man starved after benefits were cut".  Mark Wood, aged 44, had multiple problems which made him very vulnerable; but Atos declared him fit for work.  All his benefits were stopped except his disability allowance.  He couldn't pay his bills and apparently starved to death.  As well as being appalled, we should note a contradiction which emerges from the story.  Wood's GP "said he had not been contacted by either Atos or DWP about Mr Wood’s medical history, and revealed that if they had asked for his professional opinion he would have said Mr Wood was unfit for work."  But the obligatory arrogant comment from the DWP spokesperson says: “A decision on whether someone is well enough to work is taken following a thorough assessment and after consideration of all the supporting medical evidence from the claimant’s GP or medical specialist.”  Someone is making it up, and I don't think it's the GP.  (For the first time this mysterious spokesperson is named; it's Ann Rimell, who is Senior Press Officer at the DWP.)
As if it wasn't enough that one contract was in a shambles, a report came out from the National Audit Office showing that a newer one, the PIP assessments done by Atos and Capita, was heading the same way.  A piece in the Guardian reports that a backlog of 92,000 cases has built up, three times the expected number, and only 16% of cases have received a decision.  Neither company is anywhere near meeting its contractual requirements.  But the DWP spokesman said, in effect, "No problem".
As well as leaving it to others to deal with the Atos affair, IDS has also been ignoring the growing unrest about sanctions.  West Dunbartonshire CAB produced a scathing report which makes all the points many have been making for quite a while.  But the DWP's response was to confirm to Inside Housing that under Universal Credit housing benefit could be subject to sanctions.  This is because people who get working tax credits or HB but not JSA or ESA can only be punished by hitting that benefit.  Then on Friday the Herald newspaper in Scotland published a report of a piece of analysis done by an academic which brings up to date some of the stats on sanctions.  We knew that from October 2012 to September 2013 the success rate for appeals against sanctions was 58%.  But Dr Webster says that this has risen dramatically in the most recent quarter, to 87%.  However, only 2.44% of those who were penalised actually appealed in the last 3 months.  IDS would claim, of course, that this means that the vast majority of sanctions are justified; but Dr Webster maintains that the low appeal rate is down to the difficulty so many claimants have with the appeal process.  And he makes an interesting point: "To date, Work Programme contractors have been responsible for twice as many sanctions on the people referred to them as they have produced 'job outcomes' ."
Duncan Smith had a project which he's been forced to drop by his own colleagues.  He wanted to redefine poverty.  At the moment poverty is defined as having an income less than 60% of the country's average income.  So it's relative, but it's based firmly on the idea that poverty is about not having enough money.  IDS wanted to include other factors, like "worklessness" and addiction.  This was a terrible idea, for several reasons, admirably expressed by Bernadette Meaden on the Ekklesia website and by Andreas Whittam Smith of the Independent.  
Duncan Smith's recent appearance before the Work & Pensions Select Committee astonished many people, because his attitude was so disgraceful.  One of the Labour members of that committee, Teresa Pearce, has described her feelings about it on the International Business Times website.  She calls him "downright rude and quite abusive".
And finally - I've lost the link to this, but it's memorable.  In the debate on the bedroom tax Labour brought up the evidence to show that IDS's estimate of the numbers wrongly penalised was a wild stab in the dark and completely inaccurate.  Now Smith doesn't like to be contradicted.  But I detect something else in what happened next; panic at the very idea of maths.  Having accused Chris Bryant of mathematical incompetence he said that one in twenty of something-or-other .... "One in twenty - that's a fifth ..."  Er, no.  (If your maths is as bad as his, one in twenty is 5%.  A fifth is 20%.)

How outsourcing works - for Atos

There was a lot of fuss about the fact that Atos is getting out of its £500m WCA contract early, citing all the abuse it has been getting.  Will they incur a financial penalty for this?  Well, if they do they can recoup the loss from their latest contract - "to extract patient records from GP surgeries as part of the controversial NHS data sharing scheme", in the words of the Telegraph yesterday.  Some boggling went on at that revelation.  Dr Sarah Wollaston (a Tory MP but sensible) asked whether the DWP would be allowed access to the database.  The answer appears to be no, but don't bank on it.  A big question in my mind is how they can maintain confidentiality when the project involves, I assume, the work of an army of people looking at both paper and digital records.
So Atos can't lose.  They still have the PIP contract, carving up the country with Capita.  That isn't going too well.  The last we heard was that most of the potential subcontractors listed on its bid pulled out, and Atos didn't have the scope to provide enough facilities.  But with another contract in the bag, shareholders need not worry.  That's the beauty of outsourcing.  Once your company is big enough there is no competition, and bodging one contract after another doesn't matter.

An interesting week

Well, where to start?  "Welfare" has certainly been in the news this week.

On the outsourcing front, we knew that there were moves to oust ATOS from their WCA contracts and move the work to other providers.  Today we learn that the company has announced that it wants out.  They gave the information to the Financial Times, perhaps significantly, giving as the reason the abuse of their staff.  They say that they've been trying to agree an early exit for some months (the contracts are due to end in August 2015) but won't walk away until there are other providers in place.  The BBC news website reports that the government is furious at this announcement because it will probably mean that other companies will put in lower bids to take on the work than they otherwise would.  Which other companies would pick up this poisoned chalice?  Capita already has half the PIP contracts, along with ATOS, so they might be keen.  Then there are the other usual suspects, including A4e.  This is not, after all, payment by results (not officially, anyway) so it's a guaranteed income.  But would it be worth the hassle?

The row between the government and church leaders escalated this week.  27 Anglican bishops and 15 nonconformist church leaders wrote a letter, published in the Mirror, which attacks in no uncertain terms the government's creation of a "national crisis" of hardship and hunger.  This forced the whole subject onto the agenda, with much discussion on TV and radio about Cameron's claim to a "moral mission".  The debate was further fuelled by the publication of the latest sanctions figures.  Record numbers have been plunged into destitution in the year to September 2013; 897,690, including 22,840 ESA claimants.  This compares with 500,000 in the year to April 2010.  Iain Duncan Smith's response, parroted by his colleagues, was, "sanctions are used as a last resort".  We remain unclear as to whether he actually believes that.  My congratulations go to the Bishop of Manchester who, in the face of a very hostile interview on BBC radio, was extremely coherent and accurate about the hardship inflicted on individuals for no good reason.

However, a leak to the Guardian this week showed that, just when you thought they couldn't sink any lower, they do.  The idea has been considered by the DWP of charging people who have been stripped of their benefits to take the case to appeal.  At the moment 58% of appeals are successful.  This is clearly too many for the DWP, so slapping on a charge which no one could afford to pay would cut this figure admirably.

While the expected drivel poured from the right-wing commentators and their readers, I do suspect that a lot of people who had previously taken no interest in the subject have now woken up to what is going on.  It probably won't change anything in the long run, but getting all this out in the open can only be a good thing.

Morality?

I've just heard Esther McVey lying about sanctions on Radio 4.  No surprise there.  The unemployment figures are out, and it's tempting for ignorant commentators to link the slight fall to the sanctions regime, in a simple-minded way.  Iain Duncan Smith announces even more restrictions on the ability of immigrants to claim benefits, standing on what he fondly imagines is the moral high ground; but he hasn't publicly replied to Archbishop Nichols, who is sticking to his guns.  No, he's left that to his mate Dave, who has claimed, in an extraordinary piece in the Telegraph, that the government is on a "moral mission".  He accuses the Cardinal of saying things which are not true.  "Mr Cameron insisted that no one would be left destitute by the welfare reforms and said the claim the basic safety net no longer exists is untrue."
Cameron misunderstands the concept of morality.  I'm tempted to refer to the Christian gospels, but I know that cuts no ice with a lot of people (it ought to with IDS, but apparently doesn't).  Morality starts with the way you treat individuals.  You do not sacrifice them to some self-appointed mission.  All the most monstrous dictators of the 20th century believed that individual suffering had no significance in pursuit of the grand plan.  I really don't know whether Cameron knows that he is not telling the truth when he makes his claims; but a moral person would take steps to check.  Instead, like all of his government, he has simply turned his back.  He might like to read an article in the Independent which reports a survey of GPs in their trade magazine, Pulse.  16% of the doctors have been asked to refer a patient to a food bank in the last year.  One Everton GP describes his experience of this in detail.  Hospital diagnoses of malnutrition have nearly doubled in the last 5 years, and academics have called it an emerging "public health emergency".  Now that, Mr Cameron, really is a moral matter.

Today, many people are staging demonstrations at the various offices of ATOS.  On Monday we read in the Guardian that a leaked document shows that the government is preparing to shove ATOS out of its WCA contracts.  They want, first, to bring in more contractors; and then to push ATOS out altogether.  But a competition lawyer is quoted as saying that it wouldn't be lawful, because they would have decided in advance that they were going to exclude one bidder from the tendering process.  While many would rejoice at the ousting of this company, the competition could only come from those on the government's "framework" of favoured companies.  And that means Serco, G4S, Capita and - yes - A4e.

Another fine mess

We all know by now that another shambles has occurred in Iain Duncan Smith's welfare "reforms".  People on Disability Living Allowance are to be assessed for its replacement, the PIP.  But instead of it going live all over the country, as it was meant to do, it will only happen for now in parts of the country.  Nothing wrong with that, say ministers, we intended to do that all along, and anyway, better to go slowly and get it right.
Now, there are two contractors involved in this, Capita and Atos.  In one report I saw that the places which are going ahead with the PIPs assessments are those in which Capita has the contracts.  And we know that Atos was struggling to get everything in place because many of the proposed sub-contractors who were listed on its bid documents have pulled out.  Does this mean that the scheme can't go ahead where Atos is the contractor because they're not ready?  I don't know, but it seems likely.  The DWP won't want to blame Atos because, as with all outsourcing contracts, the question would be asked, "Why did you give them the business?"
IDS seems to be keeping his head down this weekend.

Round-up

I'm sure we were all looking forward to hearing Iain Duncan Smith questioned about his and his department's use of statistics on 4 September.  But according to a blog, this is not now going to happen.  The writer quotes Sheila Gilmore MP, a member of the Work and Pensions Select Committee as saying that the Department's Annual Report isn't ready, and since the main purpose of the meeting was to examine that, it's had to be postponed.  How fortunate for IDS.  As fortunate, perhaps, as the fact that they're still examining the quality of the sanctions data, so can't publish that either.  At what point do we conclude that facts are being deliberately suppressed?

One fact that hasn't been suppressed (it's been leaked) is an internal survey of civil servants working on Universal Credit.  The Guardian has the details.  Staff talk about terrible management, poor decision-making, no communication and dishonesty.  It's utterly damning.

Then there's ATOS.  It's been disclosed that the company has been paid £754 million for its sickness and disability testing since 2005.  £754m.  That's your money and my money.  The Independent reports that Lord Alton has got the National Audit Office to investigate the contracts, calling them "a licence to print money".

So-called zero hours contracts are not IDS's responsibility, but the consequences of them are.  Yet it's only the Lib Dems, including Nick Clegg and Vince Cable, who are expressing concern.  The Office for National Statistics (ONS) has just upped its estimate of how many people are working on these terms to 250,000, but this is almost certainly too low.  Are people being forced to apply for, and take, these jobs under threat of sanctions?  

Finally, an unusual reference to A4e in a regional paper.  The company still occasionally gets PR pieces in local papers, but this one, in the Oxford Mail, won't please them.  It quotes a 27-year-old woman who says that the WP wasn't very effective for her, and her adviser had no time to spend with her.  She got help from the charity Crisis Skylight, whose CE says that the WP has been a huge disappointment, offering minimal support.  Strangely, the county's Tory MP, Sir Tony Baldry, doesn't completely disagree.  He acknowledges that the need in the area is for people with skills and qualifications, and they are not getting those.

Burying bad news

The birth of the Windsor baby, and the fact that MPs and their journalist mates are all on holiday, meant that a significant news story was effectively buried.  The papers which did pick it up are a bit confused, and no wonder.  Try the Guardian.  "Atos reports found 'unacceptably poor'".  It's the quality of the written reports which the Atos people make which has not come up to scratch, not, the DWP insists, the validity of the verdicts.  Even so, they are bringing in "additional providers" from next year to work alongside Atos in order to speed things up.  It is really not clear what deficiencies the DWP is admitting to.  The Mirror says, "Atos rapped over wrongly passing fit for work up to 41% of claimants", and that the DWP was "told to act because of deep concerns about Atos at No 10".  That doesn't seem quite true, but who knows?  And what penalty has Atos actually paid?
Another little-reported failure is that of the Youth Contract, the wage incentive scheme which was supposed to help 160,000 young people into work over three years.  In its first year it helped just 4,700.  The Guardian and the Financial Times both analyse the figures.  But unless you read these papers you won't have heard any of this.  Is the timing accidental?

More from the Guardian on targets for sanctions

Well done to the Guardian for keeping on the case of the sanctions targets and league tables, because no one else seems to be interested in what should be seen as hugely important.
Yesterday the paper revealed a leaked email from a Jobcentre manager proving that there were targets for punishing people by stopping their benefits.  Mark Hoban denied there were any such targets.  Today the Guardian follows this up with a denial from Iain Duncan Smith.  "There are no targets for any sanctions whatsoever", he says, and staff will be reminded of that.  He said that "the order not to employ targets had gone out to jobcentre staff on innumerable occasions".
There's a sense of deja vu about this.  A full year ago the Guardian revealed that there were targets for sanctions.  IDS said that the report was "claptrap" but then the DWP admitted that it was happening.  So twelve months on, it's still happening.  And Duncan Smith and Hoban either know it is and are not telling the truth; or they genuinely didn't know and their civil servants are running rings round them.  Either way, the victims are ignored - except by the Guardian, which has a short film about what happens to them.
There's a parallel with the denials that there are targets for Atos to get people onto ESA, despite all the evidence to the contrary.  Maybe there's a problem with IDS's definition of "targets".

Targets and definitions

In an outsourced society, targets are, apparently, vital.  You can't measure the success or failure of a contract without them.  When companies bid, they have to agree to meet targets.  But as we've seen so often, not meeting them doesn't matter much.  There's no penalty.  You just don't make as much profit.  But if that's already factored into your calculations, who cares?  All the Work Programme primes missed the first year target, which was pitifully low anyway.  Even delaying publication of the data for a couple of months didn't push the figures up enough.  So what happens now?  A stern letter from Mark Hoban.  Well, what else can he do?  If they've all performed equally badly, or if the differences between them are minimal, you can't penalise one and not the others.  And anyway, the only suggested penalty is to cut down the number of referrals to the worst performing companies.  For some, that would be welcome, since they can't cope with the numbers they've got.
There are other targets, unofficial ones, which do have an impact, but on clients rather than the companies.  Think of Atos.  Both the DWP and Atos have denied that there are any targets for getting people off incapacity benefits.  But whistle-blowers among Atos staff have said that they are indeed given targets and are pressured to meet them.  And now we have the Universal Jobmatch site.  Again, the official line, in all the guidance, is that it's not compulsory for people on JSA to register with it.  But we know that people are being told, by both JC and Work Programme advisers, that it is compulsory, because they have been given targets, and it's easier to give orders than to persuade.

Two other words have become part of the language of welfare-to-work, and in the process have been neutralised.  The first is "mandatory".  We all know what it means in practice.  But it somehow sounds better than its dictionary definition (a real, physical dictionary, my copy of the Concise Oxford, 8th edition) which is simply "compulsory".  So let's not talk about people being "mandated".  They are compelled.
Even more weasly is the word "sanction".  It's an interesting word, because it can mean two very different, almost opposite, things.  One meaning is approval.  The other is penalty.  And it's the second meaning, of course, which pertains here.  When people don't do what they are compelled to do they are penalised - punished.

So if you're an outsourcing company which has failed to meet its targets, you can't be penalised.  But if you're a client, you can be told that something is compulsory when it isn't and penalised for not doing it.

Private and public

Everything about Atos and its contract to carry out medical assessments is controversial.  Now there's a situation that strikes some MPs as ridiculous.  The Guardian reports that Atos has sub-contracted to an arm of the NHS in Scotland to carry out its new contract, to assess people for the new disability benefits.  The obvious question asked by the MPs is why contract to the private sector only for the business to sub-contract back to the public sector?  Why not go straight to the public sector?
But this is not new.  In the Work Programme there are a number of local councils acting as sub-contractors to the primes.  The contracts were deliberately designed to make it impossible for a public sector body to bid as a prime, so however well the councils do they will not get the full reward for their efforts.  To understand this we need to go back to the New Deal contracts prior to 2006.  Jobcentre Plus regionally contracted with many different organisations, including local councils, to deliver training.  When David Blunkett outsourced the whole thing, such organisations were relegated to sub-contractor status, losing 10% of their earnings to the likes of A4e (which secured a large chunk of the contracts).  Public sector involvement fell away.  The current payment-by-results model doesn't encourage such involvement.
Of course it's nuts to have a private company sub-contracting to a public sector body.  But the aim is to make money for the private sector.

The Public Accounts Committee has published the National Audit Office's report on its investigations into A4e.  It just fills out what we had already read.  Problems with one Mandatory Work Activity contract, so it was terminated.  No evidence of fraud in the Work Programme, but some ineffective validation checks.  The need for some remedial action to "improve levels of awareness amongst A4e staff of their Whistleblower policiyand procedures".  This was the report which angered Margaret Hodge and the committee because it was done without looking at A4e's own internal report on the fraud risks in the company.

Reasonable

It always sounds completely reasonable.  The government wants to "reform" welfare in some way, and the aim is fine.  But when they try to put it into practice it becomes spiteful, inefficient and unreasonable.  

Take the aim of getting people off sickness benefits.  We all know that a problem stems from the fact that sickness benefit has always been higher than unemployment benefit.  We all know that there are many people claiming these benefits who could work.  So what do you do?  Well, this government employs a private company, Atos, to assess whether claimants are genuinely unable to work, and pays it £3.1bn.  Both the company and the government deny that there are any targets, although it's hard to see how there could not be.  For a summary of just how wrong this can go, see the Independent's article.  But when you want to do another exercise in reassessing disability allowances, you hire the same company.  What could possibly go wrong?

Or take the fact that large numbers of young people are not in education, employment or training.  It's entirely reasonable that they should be given something useful to do.  It might be reasonable to look back at what Gordon Brown did as Chancellor in the early days of the last government.  "New Deal" started as a scheme to help NEETs.  Some might see it as sensible to create jobs.  But this government has decided to make young people do 3 months unpaid work or lose their benefits.  Again, this could be seen as reasonable.  Another article in the Independent describes the scheme, which sounds familiar to anyone who remembers New Deal.  But this scheme will put people into placements with "charities and social enterprises".  It assumes that there are enough of such organisations ready to take them (there aren't).  And it will certainly be organised by a private company, for profit.

The payment by results model seemed a great idea to a government obsessed with profit.  Take off all the restraints and inspections, tell companies they can do what they like, and they will pull out all the stops.  Well, no.  An interesting piece on the Guardian's website by Su Maddock claims that innovation in the Work programme can only come through local commissioning, not through prime contractors and financial incentives.  Again, anybody who remembers New Deal, before David Blunkett privatised it, will recognise this model.  (For those who don't remember, the Jobcentre Plus regional offices held the budgets and contracted with a variety of organisations, including very local ones.)  

This government continues to confuse the reasonable with the ideological.

Not value for money

You may have read or heard about the National Audit Office's criticism of the DWP's contract with Atos.  You may even have heard of Tom Greatrex MP who asked the NAO to investigate.  But then again, the story passed most people by.  More interesting things have been happening.  So read the story in the Independent or on the BBC's website.  What the criticism boils down to is that performance targets are set too low, there are no proper checks on the performance data that Atos submits, and the company isn't penalised adequately for poor performance.
       Greatrex points out that the contract costs us £112m a year, but appeals cost a further £60m.  Yet the NAO's Amyas Morse admits that they don't know whether changes to the tests Atos carries out are necessary because they don't routinely look at the decisions of the tribunals.  This laid-back admission is troubling, especially since official figures show that 40% of appeals are upheld, rising to 70% when the appellant is accompanied by someone like a CAB advisor.  You would expect, would you not, that the civil servants would want to know why.  Or that the politicians might be interested.  Instead, it's taken a lot of pressure to get any information, because of that well-worn excuse "commercial confidentiality".  Iain Duncan Smith will be content that all the blame is heaped on Atos rather than on the government.  The company is rewarded with more huge contracts.
       This situation can only get worse, unless the government has the courage to re-examine the whole business of outsourcing.  And there's no sign of that.
     
   

Should we just give up?

It's depressing.  We should be used to it by now, and understand that money is everything, people nothing.  but we still fondly imagine that people in government will wake up one day and say, "No.  This is wrong."  Dream on.  New disability benefit test contracts have just been awarded - to Atos and Capita.  According to the Guardian, the lion's share goes to Atos.  The paper is portraying it as a blow to G4S which was in the running, and hinting that the timing suggests that the Olympic security fiasco could have ruled them out.  I doubt it.  That's not how the procurement process works, as we know.  G4S's share price went down, but it's back up now.  A fascinating article by historian Michael Wood on the BBC website points out, among other things, that G4S is four times the size of the British Army.  The embarrassment of the Olympics is just a minor glitch.  Meanwhile A4e, a much smaller player, rides its own recent embarrassments comfortably.  It preens on its website that it has been telling the Polish government how it can transform its "public-private co-operation", focussing on payment by results.

The Exaro site previews a report to be published by the University of Greenwich Business School on outsourcing which, it says, will "reignite controversy" and "provoke a furious reaction".  Sadly, it won't.  The report states the obvious; that there will always be a conflict of interest between "commercial and shareholder interests" and the public objectives.  It also has evidence that any saving of money by using private companies is short-lived.  The authors of the article go to something called the National Outsourcing Association for a reaction.  They say that people only notice outsourcing on those rare occasions when it goes wrong; it saves money and employs a lot of people.  And that, I'm afraid, will be the extent of the debate on this issue.

We are not going to change anything in the near future.  But that doesn't mean we should stop resisting.

Openness

Two bits of news which could, loosely, come under the heading of openness.

The Guardian reports more "chaos" around an outsourcing company which could have a bearing on the behaviour of companies like A4e.  The story is about Atos and its fitness-for-work tests.  I hadn't realised that last year claimants were given the right to record their assessments so that they could ensure that their details were correctly registered.  Thinking to save on the costs of all those appeals, the government told Atos to equip themselves with recorders.  The firm has complied by buying just 11 (that's eleven).  And most of those are broken.  Chris Grayling thinks that's okay.  However, if it's officially permitted (if very difficult) to record Atos assessments, maybe that opens the door to recording encounters with other companies which can have a very damaging impact on clients' lives.

The Exaro site reports that the Public Accounts Committee is demanding greater openness in outsourced public services contracts.  They want "all data" disclosing, and for the companies (and charities) to be subject to the Freedom of Information Act.  At the moment all the stuff we should know is covered by "commercial confidentiality".  The PAC's Chair, Margaret Hodge, cites the current G4S fiasco, and the fact that we don't know what penalty clauses were in the contract.  While some MPs and civil servants like the idea, I'm doubtful whether this will get anywhere.  There are simply too many vested interests.