Right, I'm back. Sorry about the hiatus. What has been going on in my absence?
On the A4e front, very little. There is no news about the fraud trial, which surely should have finished by now. But FE Week reports that the £17m London prison education (OLASS) contract, which A4e gave 3 months notice of handing back in August, will continue in A4e's hands until the new year, because the Skills Funding Agency can't find any college willing to take it on. This seems to back up A4e's claim that the contract was no longer viable. The prison system is in such a mess that prisoners are being shifted around too often to make education possible.
On the wider subject of "welfare", I don't need to detail the antics of Iain Duncan Smith. He was on Radio 4's Today programme on Tuesday, setting out the new timetable for Universal Credit. Mishal Hussein, who interviewed him, raised the obvious points about missed targets and wasted money. Now for IDS, that is not how the BBC should behave. The interviewer should just listen respectfully to whatever fantasies he chooses to spout. I feared for Hussein at the time. And sure enough, the next day IDS was reported to have lodged a complaint about her being "negative". At the same time the National Audit Office warned that any further delays in UC would be hugely costly. It said that there were no contingency plans to deal with delays.
There's a report in the Independent today about single parents being wrongly threatened with sanctions, or having those sanctions imposed. I was struck by the blatant lie in the DWP's response: "Sanctions are a necessary part of the benefits system but they are only used as a last resort for a tiny minority who don’t follow the rules and hardship payments are available if people need them.” This is utterly dishonest propaganda. But then, if the man at the top of the department is a fantasist it's going to permeate the whole organisation.
Showing posts with label National Audit Office. Show all posts
Showing posts with label National Audit Office. Show all posts
Thursday, 27 November 2014
Wednesday, 2 July 2014
Work Programme puzzle
It started with a statement from the redoubtable Margaret Hodge MP, chair of the Public Accounts Committee. She is angry at the failure of the Work Programme to help the people it was supposed to help, especially those on ESA. There has been no improvement, she said, since the PAC examined it in 2012, and providers are spending only 46% of what they were meant to spend supporting each client. Then comes the puzzling bit: "It beggars belief that the Department expects to pay at least £31 million in bonuses to all of its contractors despite their poor performance - even the Newcastle College Group whose contract has been terminated will receive a bonus."
I confess to never having heard of these bonus payments. There was little enlightenment from an article by Rajeev Syal in the Guardian. He adds some more figures, but gives the bonus as £25m (and then £31m), while calling it "incentive payments", and saying that the National Audit Office "has discovered that flaws in the work programme contracts meant that the [DWP] is obliged to make incentive payments to even the worst performing providers." The figure isn't dependent on results.
Still confused, I looked at a piece from Sky News. It's clearer. And there's an interesting paragraph: "Figures for the most recent group to have gone through the scheme showed just 32% of participants found jobs - still below the DWP's minimum performance level of 33% and well below its original forecast of 39% and the 42% predicted by the contractors themselves."
Newcastle's local Journal tells us that NCG's contract in North East Yorkshire and the Humber had a success rate of 7.4% - but they're going to get a bonus anyway.
Okay, I must have missed the bit about bonuses when these contracts came out. Perhaps they were negotiated at the same time as the "attachment fees" which meant that the providers would have a steady income and wouldn't be dependent on PbR. But they are certainly a comfort to A4e and the rest.
I confess to never having heard of these bonus payments. There was little enlightenment from an article by Rajeev Syal in the Guardian. He adds some more figures, but gives the bonus as £25m (and then £31m), while calling it "incentive payments", and saying that the National Audit Office "has discovered that flaws in the work programme contracts meant that the [DWP] is obliged to make incentive payments to even the worst performing providers." The figure isn't dependent on results.
Still confused, I looked at a piece from Sky News. It's clearer. And there's an interesting paragraph: "Figures for the most recent group to have gone through the scheme showed just 32% of participants found jobs - still below the DWP's minimum performance level of 33% and well below its original forecast of 39% and the 42% predicted by the contractors themselves."
Newcastle's local Journal tells us that NCG's contract in North East Yorkshire and the Humber had a success rate of 7.4% - but they're going to get a bonus anyway.
Okay, I must have missed the bit about bonuses when these contracts came out. Perhaps they were negotiated at the same time as the "attachment fees" which meant that the providers would have a steady income and wouldn't be dependent on PbR. But they are certainly a comfort to A4e and the rest.
Tuesday, 12 November 2013
The outsourcing argument
The National Audit Office has come up with some facts about the profits of the outsourcing companies, and the risks of contracting out our public services. There's a brief summary in the Independent and a longer analysis in the same paper. The focus is on the profit margins of G4S, Serco and Capita, but the second piece also says that Atos and G4S pay no corporation tax. The NAO is making a number of important points, which Margaret Hodge MP summarises: " These
reports together raise some big concerns: the quasi-monopolies that
have sprung up in some parts of the public sector; the lack of
transparency over profits, performance and tax paid; the inhibiting
of whistleblowers; the length of contracts that taxpayers are being
tied into, and the number of contracts that are not subject to proper
competition. The
recent fraud allegations surrounding the Ministry of Justice's
electronic tagging contracts with G4S and Serco are also a reminder
of how important it is that government properly scrutinises and
monitors its contracts with private providers.”
In an interesting piece by the BBC's Robert Peston the journalist points out that much of the information in the report was given voluntarily by the companies because they don't have to disclose any of it, despite representing 15% of public spending. He looks closely at the profit margins, and says that the balance of risk is changing.
Last week the Cabinet Office chief procurement officer, Bill Crothers, said that the government spent too little time making firms "deliver what they said they would do" for the price, and needed qualified, experienced people to do that. Although he didn't say so, the Work Programme is an example of that failure. The DWP has relied on the incentive of profit and explicitly promised the contractors that it wouldn't ask questions about what they were doing.
A4e doesn't figure in these discussions by name, because it's not one of the big four. But that doesn't mean that A4e is out of the game. The big cake on the table at the moment is the Transforming Rehabilitation contracts (they'll have to come up with a better name than that) and A4e wants a slice. There's an interview here with Jen Byrne, their "Development Director for Justice". Will the bidders offer suicidal discounts, as they did with the Work Programme? Probably not. But at least now attention is being paid to some of the shortcomings of flogging off public services.
In an interesting piece by the BBC's Robert Peston the journalist points out that much of the information in the report was given voluntarily by the companies because they don't have to disclose any of it, despite representing 15% of public spending. He looks closely at the profit margins, and says that the balance of risk is changing.
Last week the Cabinet Office chief procurement officer, Bill Crothers, said that the government spent too little time making firms "deliver what they said they would do" for the price, and needed qualified, experienced people to do that. Although he didn't say so, the Work Programme is an example of that failure. The DWP has relied on the incentive of profit and explicitly promised the contractors that it wouldn't ask questions about what they were doing.
A4e doesn't figure in these discussions by name, because it's not one of the big four. But that doesn't mean that A4e is out of the game. The big cake on the table at the moment is the Transforming Rehabilitation contracts (they'll have to come up with a better name than that) and A4e wants a slice. There's an interview here with Jen Byrne, their "Development Director for Justice". Will the bidders offer suicidal discounts, as they did with the Work Programme? Probably not. But at least now attention is being paid to some of the shortcomings of flogging off public services.
Thursday, 11 October 2012
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.
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.
Saturday, 18 August 2012
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.
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.
Wednesday, 16 May 2012
What kind of investigation?
There's plenty of coverage of the removal of one of A4e's contracts today, but most of it just repeats the press release. We saw at Prime Minister's Questions how the government wants to spin the NAO report; Cameron focussed on how quickly the Work Programme had been got up and running. It's left to the Guardian and the Yorkshire Post to highlight a significant omission.
You remember that leaked internal A4e report which showed how much probable and potential fraud was going on? It was important enough for the BBC to break its vow of silence on the A4e issue. But it wasn't, apparently, important enough for the DWP to want to look at it. They didn't ask for it. Margaret Hodge isn't happy about that, naturally, and wants a more complete investigation. It raises the question of what kind of investigation the DWP thought it was conducting. The phrases "whitewash" and "damage limitation" spring to mind.
Another major point in the National Audit Office report is reported in the Guardian. "... allegations against A4e represented just under 10% of cases where fraud was substantiated. Over 40 cases occurred in other back-to-work companies, representing total losses since 2006 of a quarter of a million pounds. Out of a total of 126 reported cases of potential fraud the DWP concluded that there was no case to answer in 75 cases. Of the remaining cases, the NAO report said, '24 were of false representation [fraud], 22 of non-compliance' and five were still under investigation. The total losses to fraud since 2006 averaged £129,000 a year, which it described as a 'small' loss in comparison to a total expenditure of £829m on employment schemes in 2011-2012 alone."
An unexpected advert on Twitter from Paul Lewis, who is one of the BBC's financial experts.
You remember that leaked internal A4e report which showed how much probable and potential fraud was going on? It was important enough for the BBC to break its vow of silence on the A4e issue. But it wasn't, apparently, important enough for the DWP to want to look at it. They didn't ask for it. Margaret Hodge isn't happy about that, naturally, and wants a more complete investigation. It raises the question of what kind of investigation the DWP thought it was conducting. The phrases "whitewash" and "damage limitation" spring to mind.
Another major point in the National Audit Office report is reported in the Guardian. "... allegations against A4e represented just under 10% of cases where fraud was substantiated. Over 40 cases occurred in other back-to-work companies, representing total losses since 2006 of a quarter of a million pounds. Out of a total of 126 reported cases of potential fraud the DWP concluded that there was no case to answer in 75 cases. Of the remaining cases, the NAO report said, '24 were of false representation [fraud], 22 of non-compliance' and five were still under investigation. The total losses to fraud since 2006 averaged £129,000 a year, which it described as a 'small' loss in comparison to a total expenditure of £829m on employment schemes in 2011-2012 alone."
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