Question to the Prime Minister

Well done to Fiona Mactaggart MP (sorry if that sounds patronising) for raising the subject of the A4e fraud case at Prime Minister's Questions today.  She linked it to the fraud in other outsourcing companies like Serco and G4S.  She got a vague non-answer, of course, but it was good that she raised it.  Nowhere in the media has it been reported at all, apart from in the Daily Mail.

That PAC meeting

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

MH not happy with RD.  She sent him the A4e internal report and some emails.  He said there wasn't enough specific information in them to do a proper investigation.  She says he should have come back to her for that info.  He says that Grayling announced his enquiry.  She persists, he is infuriating.  What about the internal report?  He accepted A4e's word that of the 9 cases only 3 were actually fraud, and they related to one person.  But they are going to investigate all the cases.  He says they can't investigate where a company has gone out of business.  R Bacon points out that you can.  MH asks about the audit Grayling asked for.  RD says that it won't be published.  "This is a whole lot of good chaps-I understand that the Chairman is an ex-Permanent Secretary, whom, no doubt, you have conversations with. It is a big company with an expensive PR machine, which we have seen in operation over the past few weeks. They are bound to be good citizens, so we don’t need to have open and transparent oversight of them." - MH.  RD gives the official answer about possible litigation.  Lot of discussion with committee members about this.  RD says all the evidence is that A4e is not fraudulent.  Hillier keen to link value for money to the service her constituents are getting.  RD says the WP is not about the service - if they don't provide the service they won't get paid.  FM wants the evidence that A4e " has in place a system for staff to report improper behaviour or performance management systems that avoid perverse incentives".  

AM: "You have just sat through a long closed session, which produced some fairly damning indictments of both the structures and the practices in A4e and Working Links and which gave several indications of possible fraud. Some evidence has been submitted to us as well-to the Chair-by the people who gave evidence in that closed session. Will those allegations be investigated?"  He is keen to talk about what they do to avoid fraud - mentions Private Eye, about which RD is sarcastic.  He describes controls now in place to ensure claims are correct.  MH: "So is A4e fit and proper to undertake the Work Programme ?"  RD says yes.  

RD goes through all the checking process in detail.  Matthew Hancock asks him the questions which allow him to show how watertight the WP is.  Hodge raises issue of bonuses.  RD says it's not an incentive to fraud because they can't now commit fraud.  Hodge describes the case of a woman who already had a job lined up but was persuaded to sign the forms for A4e in return for £50 for herself.  She thinks this is wrong because A4e did nothing for the money.  RD says the £50 was A4e's and it's within the rules.  Some argument about this.  How can you measure what help was given?  They get on to complaints and argue about that.  

Hillier wants a single hotline for complaints and whistleblowers.  RD says he wants people to go to the provider first then the JC.  FM says: "The reason that I first wrote to the Comptroller and Auditor General about how A4e were behaving was that there was no process where the concerns of my constituents, who were referred to A4e, could properly be dealt with. I just got brush-off letters and there was no process where I could advocate on their behalf. Now that was not always about fraud, but there is a lack of a process."  RD bats that aside.  

Cave admits that they didn't ask for the 2009 report and should have done.  Conversation shows that there were two earlier witnesses, not just Hutchinson.  He later admits that he doesn't know who the other 4 shareholders of A4e are.  FM presses the point about controls needing to be not just financial.  She returns to this.  "What struck me from my contact with people is that a large proportion of those customers are very often not reluctant, but are very keen on getting into work, very keen that the public’s money is properly spent and feel that what they see is not spending the public’s money properly."  (Hancock again feeds RD nice questions.)    RM: "We keep hearing from people that they do not know how they can complain and that they have bullying managers who prevent complaints. I accept that you have not been able to investigate all these cases, but one of the things that I have learned as an MP is that while you get green ink complainers, when you get the same complaint from all ends of the constituency, there is something that you should be alert to, and one of the things that I am very struck by is the number of people who have worked for these companies and say that bullying management means that there isn’t a way in which they feel that they can safely make complaints when they are asked to do things. We have had evidence from people who have been asked to do things that include making up evidence and telling lies. We have not been able to test that evidence in a court of law. Nevertheless, it is quite perturbing that people feel that that is what they have been asked to do and that there is no way they can whistleblow about it."  She refers to a previous witness: "She was talking about a different programme, but it was in this period, and therefore she did not know how to complain. While you are right that the programme that she was asked to lie about was not the Work Programme , if she had known of a safe way of passing it up, that would have equally applied to people who worked on other programmes at that time in that company."  

Mitchell:  " I think Mr Devereux has said that one of these companies could go bankrupt. That is about equivalent to the Governor of the Bank of England saying moral hazard could discipline the banks because they might go bankrupt, too. They are already too big to fail. It is so unlikely. Here is a new category of capitalism that was set up to milk the state. It is not facing the competition of the market; it’s got a safe contract, which just goes on, so the threat of bankruptcy is really hypothetical."

Argument about what "systemic" means.  Then Hodge: " Finally, a public sector contract to build houses, hospitals or schools is pretty straightforward. I am thinking of payment by results-the school is there-and you can keep a little bit of money back to make sure that if anything has gone wrong, you can get it back. Would you accept that a contract that provides human services is qualitatively different? It will work only if you build trust. I think that that is the key thing-there has to be trust in the system. It is partly about the outcome but also about-this is the Fiona point, really-how well the customers are treated. That has to be part of the mix in these sorts of contracts. So it is about the how as well as the how much-I hope that you accept that. If I put it to you that I think that trust has broken down here, in particular in relation to A4e, how can you rebuild it?" Just stonewalling from RD, helped by Hancock.

 

Several points stand out for me.  There is Devereux's determination that anything before the Work Programme doesn't really matter; and the WP is fraud-proof.  Hodge and Mctaggart in particular want to focus on the service customers get, but Devereux thinks that's irrelevant because the companies only get paid if they deliver a service which gets results.  

It's frustrating to read, but not as frustrating as it must have been for the committee members.

 

Meanwhile, Chris Grayling is assuring us that the Work Programme is doing splendidly.  In the Express he says that 100,000 people have found work through it.    

Is that it?

It's the best possible outcome for A4e.  We all knew that there was no chance of an investigation finding "systemic fraud" in the company.  But to have exonerated them completely would have been a mite suspicious.  So the DWP has taken away one small contract; one which A4e says employed just 5 people and made up just 0.5% of the company's revenues (Guardian) and where fraud has been admitted.  A4e bosses sound suitably contrite but vindicated.

The media have generally been content to report rather than comment.  Clearly we are meant to see this as drawing a line.  Whatever happens now, in Slough for instance, can be seen as an isolated incident and proof that the company has got its act together by reporting it to the police in the first place.  The two prison education contracts which had been put on hold can now get the go-ahead.  Business as usual.  Labour's Liam Byrne has blustered ineffectually.  But what about all those dossiers which MPs and journalists were compiling?  Margaret Hodge MP and Fiona Mactaggart MP, members of the Public Accounts Committee, said that they'd received hundreds of complaints.  Journalists were keen to hear from whistle-blowers, and I know of at least one TV producer anxious to get evidence.  Now, presumably, there's no story.  Move on.


But that will be a disservice to all those who have voiced their anger at their experiences.  We need to maintain our watch on this company.

Timeline

The year so far:

• 18 Jan  The Telegraph publishes details of A4e's accounts.  This blog does the sums and highlights the extraordinary amount of money paid to Emma Harrison.  This is taken up by Private Eye.
• 2 Feb  Emma Harrison is guest of the day on the Daily Politics - no hard questions are asked.
• 5 Feb  Emma Harrison is on Radio 5 Live
• 8 Feb  The Public Accounts Committee attacks A4e, targeting the money paid to Harrison and the poor results.  This is reported in the Guardian.
• 10 Feb  The Daily Mail picks up the story and launches a devastating attack.
• 11 Feb  The rest of the media take up the story
• 17 Feb  The Mail has another go at Harrison
• 18 Feb  Reports of fraud investigation in A4e Slough
• 19 Feb  Margaret Hodge MP calls for suspension of all A4e's contracts
• 21 Feb  Fiona Mactaggrart MP starts highlighting reports of fraudulent practice in A4e
• 23 Feb  Emma Harrison steps aside as government's "family champion".
• 24 Feb  Emma Harrison steps down as Chair of A4e (but keeps her stake in the company).
• 9 Mar  DWP announces "independent audit of all our commercial relationships with A4e"
• 10 Mar  A4e gets two new prison education contracts
• 22 Mar  Paul Mason reveals a leaked A4e report of 2009 which shows they were aware of widespread fraud.
• 3 Apr  A4e is said to be the preferred bidder for the EHRC helpline contract.  This is denied.

So now what?  There was a point in February when journalists were contacting people like me to get whistle-blowing contacts, keen to run revelations.  Now, they're not interested (except for individuals at Private Eye and the Guardian).  The government has quietly stopped giving A4e any more contracts until it's safe to do so.  The DWP has kicked the story into the long grass with its investigation.  Emma Harrison has lost her public profile but not her income.  Has anything important changed?

Complaints in Bootle, and correction

Labour MP Bill Esterson is having another go at A4e.  Not long ago he ran a complaint on his website from a man who had been referred to A4e and said that they "run a campaign of intimidation and undermine any self-confidence you may have."  The story was marred slightly by mention of a 50-page contract; but the gist of it was clear enough.  Now Esterson returns to the attack with an account from a 48-year-old woman who " was left so angry at the scheme, she has turned to her Labour MP for help to 'expose the disgraceful practices of A4e'." 
What seems to have happened is that an induction in Bootle was a shambles, with no one knowing what to do with the clients but treating them like naughty children or criminals.  The woman "was introduced to a placement work advisor who proceeded to talk to the group like a primary school teacher addressing a group of six year olds. We were told to 'shut up, sit down, don't speak, put your hands down, you can't ask questions and don't speak over me'. She then proceeded to bring in a team of health workers  and told me in front of the group that I should have a chlamydia test, there and then."  She said that the atmosphere was so confrontational that it was dangerous, and that the experience was humiliating for people who were already likely to be suffering from depression and lack of confidence.  The MP says he getting a lot of similar complaints about A4e and wants an investigation into its practices.
There's always another side to a story like this so we have to be cautious.  But how can a company alienate people so comprehensively on their first day?  Lack of organisation is one thing; but staff attitudes towards clients are fundamental.  And they come from management.

Another MP, Fiona Mactaggart, has been asking every department of government what contracts it has with A4e.  The Department of Defence said, "None".  But now they've issued a correction.  "The Ministry of Defence has one contract with A4e. This is for the provision of a trial of early leaver services, to assist service personnel leaving the armed forces with their transition back into civilian life. The contract is for a period of 12 months, commencing February 2012, and has a nil value contract management fee."  (Does that last bit mean that it's payment by results?)

PMQs again

Fiona Mactaggart MP had another go at A4e today, raising at Prime Minister's Questions the subject of A4e's two new contracts.  She said that she has received "40 or 50" emails from members of the public alleging fraud by the company, so why had they been given these contracts.  Nick Clegg (it was the deputies doing PMQs today) said the only thing he could say, that an audit has been launched and any evidence of systematic fraud would put an end to all the contracts.
I wonder what Ms Mactaggart has done with all those emails.  Have they been passed to the DWP?

Unanswered questions

Two Labour MPs have tried asking questions about A4e but have not received answers.

The first is Liam Byrne.  Yesterday he put in a written question to Francis Maude, Cabinet Office Minister, asking "when allegations of fraud at A4e were drawn to the attention of his Department's Propriety and Ethics team.  The answer was: "As has long been the practice, information relating to internal discussion and advice is not normally disclosed."  No joy there, then, but I don't suppose Byrne expected anything else.
Last Tuesday Fiona Mactaggart asked "the Secretary of State for Justice what contracts his Department has with A4e; and what the (a) purpose and (b) value is of each such contract."  Now, you would have thought that was straightforward.  But Kenneth Clarke replied: "The Ministry of Justice has no current contracts with A4e. However other departments do have contracts with A4e that deliver services to offenders."  What Mactaggart probably had in mind were the contracts for prison education, known as OLASS (Offender Learning and Skills Service).  Helpfully, back in 2008 A4e submitted a memorandum to the Public Accounts Committee trumpeting its involvement in these contracts.  On their own website A4e talk about working in 20 prisons with 400 staff on OLASS and providing careers guidance in 7 prisons.  It's big business.  And apparently these contracts don't come from the Ministry of Justice.  So, do they come from the Department for Education?  It would seem so. 
If even MPs have trouble getting information, no wonder the rest of us struggle.

Plugging away

There's an interesting piece by Fiona MacTaggart MP on the Left Foot Forward website.  MacTaggart is the Labour MP for Slough, and a member of the Public Accounts Committee which tore into A4e recently.  She begins: "In politics often you plug away at an issue with no-one noticing, and then it becomes big news."  Yes, Fiona, I know the feeling.  She then says that over the last two years she has reported A4e to the National Auditor three times after complaints by constituents.  And it was in Slough that four former employees were arrested.  She outlines her concerns about the company:

• It cut its costs and provided a poor service
• It implied that it could offer skills training courses but failed to provide them
• It used unemployed people in unpaid roles in the company, and didn't give a job to any of them

We have a right, she says, to expect high standards from A4e in return for their high profits.

All true.   But something else worries me.  MacTaggart certainly isn't the only MP who has had complaints about A4e (and, I'm sure, about other providers).  There are a number of things MPs can do with such complaints.  They can i) ignore them; ii) pass them on to the relevant minister; iii) pass them to a civil servant in the relevant department or iv) pass them to the National Auditor because money is involved.  Whatever the various MPs did, the DWP would have been well aware of an accumulation of complaints; but nothing was done.  Undoubtedly, bland responses were given, assurances offered.  It's pure luck that MacTaggart was tenacious and well-placed.  Could we now see some other MPs coming forward with their own dossiers of complaints - and the replies they received?

A flash in the pan?

The graph shows how the hits on this blog rose from the end of January, took off, soared and then gently settled down as the fall-out from the Public Accounts Committee meeting hit the headlines.  But the fuss dies down.  A4e and Emma Harrison are out of the news, and attention wanders away to other matters.  I'm sure that MPs Margaret Hodge and Fiona Mactaggart are still collecting stories, but they can't force an enquiry.  The government would just like to drop it now, and Labour, having garnered a bit of publicity for Liam Byrne, don't want to press too hard, because A4e's success is their responsibility.  Journalists are, no doubt, still collecting material, but they will drop the subject if it seems to be going stale.  You'll hear no more from the BBC.  Something worrying happened with the BBC, and we must be aware of it.  Emma Harrison had moved from being the owner of a business to being a celebrity.  There was a marked reluctance even to report the story, as if someone was ordering hands off.  It's unlikely that Harrison is the only person to have struck up a relationship with the Corporation which inhibits proper scrutiny.  But it means that people who had no particular interest in this subject are still almost completely unaware of what has happened. 

The Financial Times has kept on the case, reporting that DWP officials "told Number 10 that giving Ms Harrison a role advising the government on finding jobs for troubled families might cause ethical problems, given her company’s role as one of the main providers of the government’s £5bn back-to-work scheme."  But they didn't tell no. 10, because they couldn't see any reason to, that fraud investigations had been carried out into A4e.  They didn't see them as evidence of "systemic" fraud.  There is some minor fall-out around A4e's other contracts.  A4e has the contract to deliver "face-to-face" money advice, and the Money Advice Service has had to state that the current row has no bearing on this contract.  Glyndwr University, which had arranged to validate courses for A4e, has now said that it will keep the situation "under continual review". 

A4e has published (not necessarily deliberately?) its performance data for the Work Programme so far.  It's broken down by "partner" and difficult to analyse, but seems to show that on outcomes - sustained jobs so far - one organisation leads the pack.  It's too early to make much of this.  In the Autumn the DWP will have to publish figures across all the contracts.  Remember that the plan was to penalise the worst-performing provider in each area, but I wouldn't be surprised if that was dropped.

Emma Harrison has disappeared from Twitter, but Mark Lovell is still there (although he hasn't posted since 18 February).  

Has it been a flash in the pan?  Probably.  

Would you believe it?

Who would have believed this even a few weeks ago?  A4e and Emma Harrison are all over the papers and even the BBC has had to take an interest.  I've learned something about media-speak.  "It emerged" means "we've just realised", and there has been a lot of that going on.  Some of the reporting has been woefully ignorant, because journalists don't know the background and are rushing into print before doing their research.  As a writer in The Week puts it, "There is now a fight over who should get the glory for pushing Harrison out. Margaret Hodge claimed the credit for her committee on the BBC Today programme yesterday, but the Daily Mail, which has given the story the biggest coverage, today claims 'The Mail led the way'. The Mail also accuses the BBC of ignoring the revelations until this week."  Indeed , the Mail is running a piece claiming that "The Mail led the way".  It didn't.  Those of you who actually read this blog will know that the story broke when the Guardian reported on the meeting of Margaret Hodge's committee.  It got a lot more attention when the Mail weighed in, but they didn't lead the way.  But maybe we could go further back and share the credit between this blog and Private Eye for highlighting the dividend paid to Harrison.  The Eye is used to banging on about something for ages until finally the mainstream press catches up and claims the credit.
"It emerged", says the Mail (no, it was made public ages ago and we reported it) that A4e, or an arm of it, got the contract to design payment-by-results contracts for helping familes with complex needs.  Fiona Mactaggart MP objects, naturally.  But the Mail also makes public the fact that A4e has just become the preferred bidder on another contract, worth £15m, to rehabilitate prisoners in London.

The Star, Sheffield's local paper, has a different take on all this.  They say that Lib Dems call Labour's attacks "cynical", given David Blunkett's involvement in the company.  Blunkett is indignant.  “This is a rather cheap and extremely nasty personal attack on me.”

It's not open season

It certainly feels like open season on A4e at the moment, with the subject raised at Prime Minister's Questions and the papers coming up with more revelations.  But as far as I'm concerned, my rules on publishing comments still stand.  No gratuitous insults.  No specific allegations which I have no way of verifying.  Please take those to the newspapers.  And no including your own email address!
It's really important now to focus on the real issues and not get caught up in irrelevancies.  For instance, the Guardian ran a piece yesterday headlined, "A4e compelled jobseekers to work unpaid in its own offices".  It turns out that this was under Flexible New Deal when the 4-week work placement was compulsory.  Now, on the previous contracts it wasn't that unusual for providers to give people placements in their own offices, doing admin, perhaps.  On FND, when the placement was compulsory, that was probably a mistake.  But I submit that it's not massively important.  In the same issue, Amelia Gentleman is cautious.  She says that a number of A4e customers have come forward with complaints, but that much of what they complain about would be common to all the providers.  But she gives two examples of people who felt that they had been badly treated by A4e.
Fiona Mactaggart MP, who raised the matter in Parliament, is now demanding an investigation by the Serious Fraud Office.  The MailOnline reveals that there's a second police investigation going on.  And they home in on the relationship between Harrison and government, exemplified by A4e's employment of Tory insider Jonty Oliff-Cooper, a fact which "emerged last night".  The writers of this piece, Jason Groves and Sam Greenhill, obviously haven't been following this blog.  The fact "emerged" for us a long time ago.  They tread carefully when they mention David Blunkett's link with the company.  As a minister he "advocated private involvement in welfare reform" and is now paid up to £30k a year by A4e, but "there is no suggestion of impropriety".  That kind of half-baked reporting really doesn't help.  We need journalists to do their homework, understand the history and the issues and focus on what matters.  And that's how a single company, be it A4e or Capita or Serco or whoever, can make millions out of delivering public services badly.  And how A4e got away with it for so long.
Last night Emma Harrison's Twitter account was frantically posting links to positive stories on A4eVoice.  That won't be enough.

Shrove Tuesday - and it keeps on getting worse

Today is Pancake Day, but long before it was called that it was Shrove Tuesday.  Tomorrow is Ash Wednesday, the start of Lent, when people would fast, so on the Tuesday they confessed their sins and were "shriven" - forgiven by the priest.  Today, then, is a day for confessions.
Why am I telling you this?  Well, partly because I'm getting a bit bored with the continuing saga of Emma Harrison's embarrassment; and partly because Harrison may feel that it's relevant.
The latest episode is another onslaught from the Daily Mail.  "Jobless attending courses by 'back-to-work tsar paid £8m by the Government 'were ordered to sign blank timesheets'."  One of the Public Accounts Committee members who questioned A4e's Andrew Dutton last week was Fiona Mactaggart MP.  She happens to be the MP for the area including Slough, where police visited A4e's offices following fraud allegations.  And Mactaggart has been compiling a dossier of reports about A4e from her own constituents.  One accusation is that clients were made to sign blank timesheets.  That shouldn't happen, obviously, and I'm not excusing it, but it can be done for convenience rather than fraud.  More serious is the accusation that a client had to sign a blank review sheet.  Others talked of not getting the training they were promised, of shambolic conditions and of inappropriate treatment.  Some of this happened a while ago, and A4e are saying that it can't happen now.  Mactaggart is handing the dossier to the head of the National Audit Office.
As I pointed out earlier today, this will not prevent A4e from bidding for new contracts.

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.