Lessons in outsourcing and bias

The last few days have seen a graphic example of the perils of outsourcing.  As the NHS is gradually auctioned off, one of the pieces up for grabs was the GP out-of-hours contracts.  Serco got the job in Cornwall, and were recently slammed for providing a substandard service.  Next came the 111 helpline.  The bidders had to work on assumptions about call volumes and length, since they were going to be paid per call.  NHS Direct, which won a lot of the contracts, has given one back shortly after starting it, and the rest before even starting.  The assumptions were wrong, and they can't make them viable.  For a minor player like NHS Direct, this is terminal.  They can't exist while making big losses.  But the major players can carry on regardless.
The journalist John Harris wrote a long article in the Guardian on Monday about Serco in particular and outsourcing in general.  He's got all the main points, and writes clearly and passionately.  But he misses one serious issue.  Contracts handed out by one government run for a lot longer than the government itself.  An incoming government in 2015 cannot cancel existing contracts except at immense cost.  So our fragile notion of democracy is further undermined.  We can get no further, because the politicians on all sides are not going to back away from outsourcing.  More local councils are looking at hiving off many of their services.  Government will flog off anything it can.  There are vast amounts of money to be made, and that's all that matters.

There was a hilarious article in the Telegraph yesterday.  Back in November 2011 the BBC's John Humphrys presented a radio programme called The Future of the Welfare State.  It was a personal view, from his Welsh home town.  But there were complaints that it was not based on evidence, and was politically biassed.  The BBC Trust has just ruled that it failed to back the views presented with figures, and breached the rules on impartiality and accuracy.  Cue outrage from Iain Duncan Smith, who obviously loved the original programme, and sees the Trust's verdict as typical left-wing bias.  Ironically, he felt the same about Humphrys interview of him about the benefits cap recently; and he professes himself "staggered" about the way the BBC reported the High Court's judgement on the bedroom tax yesterday.  Yes, IDS is ridiculous.  But he's also very dangerous.  The only acceptable stance, as far as he's concerned, is for the BBC to parrot the government's line uncritically.  Yet another chip out of the structure of democracy.

Where is the anger?

That's the question asked by John Harris in a Guardian article last week.  He is provoked by the story we reported on that the W2W providers are demanding more and more "sanctions" - wanting to stop the incomes of clients.  It's a long and eloquent piece, and he can't understand why people are not more angry about what's happening.
It's not a difficult question to answer.  We could start with a story which appeared in the Express last week: "One Scot in 10 would rather skive than get a job".  It's a story designed to misinform.  It even quotes the odious Taxpayers' Alliance.  But the point is that it feeds the belief, in people who know no better, that the welfare system allows the idle to live in comfort on the back of the industrious.  Once this would have been seen as far-right propaganda.  Now, people have been persuaded that it's true.  They see their own insecurity not as the fault of the elites who have messed up the economies of the world in their own greed; they blame the people who are even lower down the ladder than they are.
Many of us know people who believe that there are vast numbers of "scroungers", living comfortably on benefits with no intention of working.  They will tell you about families that have all the luxuries you could desire and don't want a job.  There is just enough truth in the fiction to turn it into a generality.  Never mind that all such families are up to their eyes in debt, or criminally inclined.  It's no use telling them that many thousands are desperate for work.  How many read such reports as this one in the Yorkshire Post: "Hull: City where 18 people chase every job vacancy".  They don't believe it.  Write about food charities and they don't believe it.
So cut welfare.  The only people who will suffer don't matter.  The reason that the government is reluctant to cut benefits for the elderly is that the elderly have an annoying habit of voting.  As for the poorest, most of them don't vote, and the calculation is that more people will approve of "cracking down" on scroungers than will have sympathy with the sob stories.  


G4S are getting a mauling in the press today.  But rely on the BBC and you'd never know that the company has W2W contracts.

That "unpaid stewards" row

There's been a great deal written about the case of the "work experience" jubilee stewards, but I haven't weighed in because it was nothing to do with A4e.  Well, not directly, anyway.
Among all the articles about the controversy I recommend two.  The first is a New Statesman blog piece, written by Kerry McCarthy.   The second is by John Harris in the Guardian, and is emotively titled "Back to the Workhouse".  


One thing struck me about the incident, which hasn't been raised in the media; the relationship of Work Programme providers with large companies.  In this case the provider was a subcontractor, a charity called Tomorrow's People, and the employer was Close Protection UK.  Now, in the past security work was an area for which some providers were willing to pay for training.  The SIA (the necessary qualification for the job) could be delivered in a week.  The provider might well have an arrangement with one or two local security firms for their clients to have interviews for any vacancies.  But now, it seems, the qualification involves unpaid "work experience" and an NVQ2 in something called spectator safety.  And the employer is a national company.  


This is far from unique.  A4e has a relationship with another huge security firm, Securitas, which boasts of employing 300,000 people in 51 countries.  Such arrangements are not widely publicised, but probably involve employers in areas like care work and retail, as well as security; jobs which need minimal training and pay minimum wage.  The WP provider pays for the training and the employer agrees to offer some jobs to the WP clients.  What's wrong with that?  Most people would say that anything which helps get people into work must be a good thing.  But there are some drawbacks.


For the employers it means a big taxpayer subsidy, because ultimately it's the taxpayer who is paying for the training.  Yet it's a private arrangement between two private companies.  It leaves smaller companies out of the loop.  True, the clients who get work are not bound to the first employer.  But they don't know, when put onto the programme, which companies have these arrangements with their provider, and so which areas of work they are going to be steered into.  No one is monitoring these relationships - that "black box" again.  They only get scrutinised when it goes wrong, as with CPUK.  There, it was apparent that the employer was benefiting from free labour called "work experience".  How many other employers are getting a similar benefit?


The government is determined to increase dramatically the number of people who are made to do unpaid "work experience".  We must demand full disclosure of which employers benefit from this.  How many people are they taking onto work experience and how many are they subsequently employing?

Catching up

Through the day it seems that Liam Byrne's intervention has paid off, in that it has forced an admission from the DWP, according to the Telegraph, that "No. 10 was not told about A4e fraud allegations".  A spokesman for the PM is quoted as saying, “I don’t think we were aware. But it’s a police investigation. If the police are investigating private sector companies, I don’t think necessarily they report regularly to the government on how their investigations are going.”

Richard Kay in the Mail asks, "Is David Cameron’s former ‘back-to-work tsar’ Emma Harrison already plotting her return?"  He tells us that Emma Harrison "has been approached by maintenance firm Aspect.co.uk to advise on a boot camp for jobless youths. Boss Nick Bizley says he is fed up with a deluge of job applications from foreigners but very few from young British candidates, and wants to change attitudes towards work."  Sadly, I can find nothing more on this.  
The most interesting article of the day is by John Harris in the Guardian.  It's always gratifying when the press catches up with what we've been going on about for ages.  He says that Emma Harrison's biggest mistake was "not keeping her head down".  He points out that she is not facing any reduction in her income and "may well be in line for a rather nice future: less heat and less work, but potentially even greater takings".  Then Harris contrasts Harrison's high profile with that of Chris Hyman, CEO of Serco, a company which has much more outsourcing business than A4e.  And he makes the leap which nobody on the supposed left of politics (certainly not Liam Byrne) has yet been willing to make.  "For decades now, the introduction of the profit motive into public services has been held to be synonymous with dynamism, innovation and increased responsiveness to the 'customer'. There is, of course, plenty of evidence to the contrary, but the more zealous minds one associates with the rule of New Labour still believe it, and most Conservatives hold it as an article of faith."  Quite.  And he concludes: "Do not rely on senior figures in the Labour party to make the running on this issue: after all, it built a huge share of the shadow state in which these people make their money. There again, if the progress of the Emma Harrison story – as with the recent controversy about workfare – is anything to go by, these things no longer need the involvement of front-rank politicians to build unstoppable momentum. One thing is certain: though long buried, the tension between public services and profit is back – and this story is only just starting."
I'm currently reading a book called The Verdict by Polly Toynbee and David Walker, summing up the Labour years from 1997 to 2010 from a Labour-supporting but critical point of view.  They manage to cover New Deal and the various measures to help the unemployed while totally ignoring the privatisation in 2006.  John Harris is right.  But I fear it may be too late.

Widening the debate

I thought we might get a day off, that the furore would be dying down.  But no.

First, A4e put out a press release yesterday.  Two things are really exercising them.  The first is that continual reference to 9% outcomes on Pathways to Work.  That wasn't the figure.  They don't actually say what the true figure was, but we've seen low twenties percent mentioned.  The target, however, was 30%.  The figure isn't some aspiration, it's what the bidders promise in order to get the contract.  The best performer on this contract was Jobcentre Plus!  A4e has consistently underperformed, promising 50% outcomes on the 2006 privatised New Deal contracts and delivering around 25%.  Flexible New Deal was even worse.  So while it must be galling to see the error repeated, the fact of poor performance is inescapable.
The second factor is the reporting of the fraud investigation.  A4e states again that the disclosure was the result of their own internal processes and they reported it to the police.  Today that becomes somewhat irrelevant as we learn that four people have been arrested.  (See the BBC report.)  Now, I know nothing about what went on in Slough.  But A4e is one of a number of contractors which pay commission to staff for getting someone into work.  The temptation to fiddle must be that much stronger.
Yesterday the Guardian published a long article by John Harris.  Most of it rehashes what has already been published, but he has spoken to Margaret Hodge MP, chair of the PAC.  She became annoyed, she said, when she found that A4e had the contract in her own area but sub-contracted it to a local charity while taking 12.5% of the attachment fee.  Harris points out that this all began under Labour, and she accepts that.  It was a mistake.  Harris is one of the first journalists to see this fuss as part of a wider problem.  "The rise of A4e also highlights a very modern fact of public life: handing over large swaths of what the state used to do to the private sector has become so mundane as to barely attract comment, and some people have been doing very well out of it indeed."  Now we read on the BBC news site that a London charity, London Citizens, is claiming to be doing much better at getting people into work than the big contractors, and doing it much more cheaply.  And the article says: "There has been increasing scrutiny of work-to-welfare schemes."
That's what we need, of course.  The current targeting of A4e should be the start of a much wider debate on the role of private profit in public service delivery.

Free labour for Tesco

Many people will have seen the news today about Tesco's use of free labour.  It started with a "job" advert on the government's own website for a night shift worker in Tesco in East Anglia.  Pay - "JSA + expenses".  Outrage spread via Facebook and other sites.  Then Left Foot Forward showed how this was far from a one-off.  Guardian journalists had found several similar adverts.  Tesco's response fluctuated.  First they told people that they were helping young people by taking part in a government scheme; then they said at had been a mistake.  Now John Harris has written a considered piece in the Guardian about what he calls the "sinister reality" of such schemes.

I can add little to what has been written.  But it will be interesting to see whether the story is taken up by the rest of the media.  Newsnight, perhaps?  If you're one of those driven to boycott Tesco because of their use of free labour to save on employment costs, bear in mind that Sainsbury's and the Co-op have decided to steer clear of the scheme, and can be patronised with a clear conscience.

Guardian piece by John Harris

There's a comment piece in the Guardian by John Harris which will appeal to many of our readers. Of interest, too, are the comments which follow it, showing how the public is generally unsympathetic unless they have personal experience.

We can see clearly the confusion in the government's thinking over the unemployed, particularly over Mandatory Work Activity. On the one hand, it is supposed to help people back into the discipline of work and give them experience useful in securing a job. On the other hand, it is ensuring that people don't get benefits without having to work for them. Is this work experience or community service?

The piece also highlights the inevitability of employer exploitation. With a pool of free labour to draw on, some employers who want only unskilled labour will happily cut their wage bill even further.