A4e sold?

I've had a tip-off that A4e has been sold and the staff will be informed on Monday.  Since I can't confirm that, I won't go into any more detail.  If it's true it raises some interesting questions.

Last night on Newsnight there was supposed to be a debate about "welfare" with representatives from Labour and the Conservatives.  Labour's Rachel Reeves and Stephen Timms were already on their way when they were told it had been cancelled - the Conservatives had pulled out.  It seems that Mark Harper, minister for the disabled, had withdrawn with two hours notice.  So, since we're now under election rules, the producers couldn't empty-chair him.  Instead there was a "panel" on which Fraser Nelson spouted egregious Conservative tripe and Will Hutton talked sense.  Also there was Deirdre Kelly ("White Dee"), because the media now treat her as some sort of representative of the unemployed.  It was terrible.  The Daily Politics has been holding a series of debates among party spokespeople on various areas of government, and on May 5th there's to be one on "welfare", including Iain Duncan Smith.  The editor assures me, via Twitter, that IDS won't withdraw and, no, it isn't already recorded, it goes out live.  We'll see.

Welfare week

The subject of welfare (which I will stubbornly continue to call social security) has been prominent this week.  It wasn't only Labour's announcement of its policy, although that may well have sparked it off.  The BBC belatedly discovered the scandal of ESA, the delays and the failure of the Work Programme to help those supposedly able to work.  Of course, being the BBC, it headed the story with the speculation that the cost would mean that the government breaches its self-imposed cap on total welfare spend.
Then the Public Accounts Committee reported on the even bigger mess of PIPs.  An embarrassed Mike Penning was allowed to get away with blaming Labour, and insisting that it was now fixed.  But it all added to the impression of government that "something must be done".
Where was Iain Duncan Smith?  He was proudly announcing that Universal Credit is being "rolled out" to 90 Jobcentres in the North West.  But it will still only apply to single unemployed people with no complications, and there are no predictions beyond that.  It was unfortunate timing; another major failure was added to the list.  The Economist, normally Tory-supporting, published a devastating article headed "Universal discredit" rubbishing everything this government has done on "welfare reform".
Last night BBC's Newsnight had a discussion on the subject between Owen Jones and Nadhim Zahawi.  The former is a socialist and columnist who is often critical of Labour.  The latter is an ultra-loyal Tory whose expenses claims caused a furore and who will trot out the party line.  The innate bias of the BBC was evident in the use, several times, of the term "welfare dependency" and in using a clip from Benefits Street as if it was an appropriate illustration.  And IDS's lackey Christian Guy from the Centre for Social Justice was presented on the film as he was an independent expert.  Who "won" the argument depends on who you agree with.  These discussions rarely change opinions.  But at least the subject is now being discussed.

The BBC blew it - again

BBC Newsnight tonight announces an item on "sanctions", so I watch with interest.  It goes to a food bank in Accrington (I think) and its manager talks eloquently about the hardships people are suffering.  A few people are singled out; a 61-year-old man who had worked all his life until made redundant two years ago; a young man with learning difficulties; both punished for not applying for enough jobs.  Back to the studio, and Victoria Derbyshire conducts an interview with two MPs; Debbie Abrahams (Labour), who is on the Work & Pensions select committee, and Nadhim Zahawi (Tory).  It's a sorry spectacle.  Abrahams tries to bring out the reality of sanctions, Zahawi parrots the familiar lies, and is allowed to talk over her and dominate the "discussion".  Just when you think the BBC might be finding its backbone, it caves in.

Can we afford Iain Duncan Smith?

Yet another policy of the Work and Pensions Secretary has had to be altered after a period in which he has refused to listen.  The "bedroom tax" is still a disaster.  But Iain Duncan Smith has conceded changes to allow foster carers and the parents of armed forces personnel to keep their "spare" bedrooms for when they are needed, without financial penalty.  But confusion still reigns, as they're now saying (I'm watching BBC's Newsnight) that the money is coming out of the discretionary fund.  And as the Guardian points out, it's only 3 weeks until this all kicks in.  And despite claims from Cameron and other Tories that the families of disabled children and others are exempt, that isn't true.  It's up to the local authorities to find enough from the one-off inadequate fund to cover those who apply.
As we pointed out last month, this is just the latest in a long list of messes which Duncan Smith has created. And another is looming.  A pilot of Universal Credit, in which social housing tenants on housing benefit were paid the HB directly rather than it going to the landlord, has resulted in a big increase in people defaulting on the rent.
Can you imagine keeping your job if you did it as consistently badly as IDS is doing his?  The country can't afford to have this man in any position of power.

Mark Hoban interview

I've just watched an entertaining but infuriating interview with Mark Hoban on BBC's Newsight.
It started with a clip from the classic film Metropolis, a scene of mass forced labour.  It was then pointed out that 130,000 people have been "sanctioned" for not taking part in any of the 7 schemes affected by today's court ruling.  A Human Rights barrister said that they may have a right to compensation.  A TUC spokeswoman said that they support good quality work experience schemes, but not unpaid work in return for benefits.
Then the interviewer, Gavin Esler, turned to Mark Hoban and asked why his department was so incompetent.  It was rapidly clear that Hoban wanted to talk only about the vindication of the schemes themselves, not the court ruling.  They don't agree with the court, and want to be able to be flexible and respond quickly.  This is not a major blow, he said, it was "business as usual".  What provision has been made to repay people, Esler asked.  None, they're not going to pay.  (The interview was taking place against a backdrop of a scene of forced labour from Metropolis.)  Esler asked if people like Cait Reilly are workshy.  We offer help, said Hoban, not answering the question.  Then, astonishly, he uttered the phrase "tailored, personalised support".  When Esler put the contrary case, Hoban said that they were "very effective schemes in getting people into work".  I wanted Esler to bring up the DWP's own figures which show just how useless they are, but instead he turned to the Work Programme, and the 3.5% success in its first year.  Hoban repeated the phrase "personalised support".  So all the evidence that the WP offers nothing of the kind can be ignored by this government, and the same old lies can be propagated.
I agree completely with Zoe Williams in her Guardian piece: "All the statistics released about the Work Programme show execrable results, and yet we've heard nothing about penalties, or remaking the contracts, or rethinking the system. There is a creeping sense that this is turning into a cash cow for the private sector, a get-out-clause for the government ("we've spent all this money, if people can't get jobs despite our help, it's because they are inadequate"), and unemployed people will be left at the bottom, ceaselessly harassed by a totally specious narrative in which their laziness beggars a try-hard administration."

Grayling on Newsnight

Okay, I take it back.  The BBC did tackle the A4e fraud question on Newsnight last night.  If you missed it (as I did) you can catch up on iplayer here 25 minutes in.  Paul Mason summarised Eddie Hutchinson's evidence, picking out all the juicy bits.  He then showed the 2009 internal A4e report which, he said, they had handed to the DWP only to be told that they weren't interested because they were concentrating on current programmes.  Mason said that Hutchinson had been surprised to learn of this report.  (He joined the company the following year.)
Emily Maitliss then interviewed Chris Grayling.  She wasn't sufficiently clued up about the contracts, but the main points got across.  Grayling insisted that the allegations were not about the Work Programme, and that the detailed investigation done by the DWP's audit team and Ernst & Young had found no evidence of systemic fraud.
Maitliss tried the obvious questions.  Is A4e a fit and proper company?  If this was a fraudulent benefits claimant he would be "down on them like a ton of bricks".  Grayling stonewalled, but said that there were "significant doubts" about the evidence and "significant doubts" about Eddie Hutchinson.
So the strategy is clear.  Suggest that Hutchinson is a liar.

The future of A4e depends .....

All the newspapers have reported the revelations from the BBC yesterday.  The coverage ranges from the Daily Mail's usual strident reporting, complete with graphics, to the more sober account in the Telegraph, which quotes an A4e spkesperson: "While this investigation uncovered a number of areas where procedures may have been lacking, the final audit and further investigation determined that five claims were irregular and related to one former employee.  This was reported to the DWP Risk Assurance Division, which confirmed that the action taken by A4e fully met their own audit requirements and that they considered the matter satisfactorily resolved.  A4e repaid the value of these three claims in full, which totalled less than £5,000.”  

The Yorkshire Post has the full quote from the DWP: "A 2009 A4e internal audit and risk document, relating to programmes contracted by the previous government, has today been passed to the department.  The Work and Pensions Select Committee was made aware of this audit at the time and the department later received assurances from A4e that it had not uncovered any major issues."  [my italics]

Paul Mason picked up this point on Newsnight tonight.  He said the DWP is now certain that it never received the report.  Yet weeks ago it asked for all the relevant information.  The report was made public in October 2009.  (I'm not sure what he meant by this.  Presumably it wasn't this leaked draft which was made public.)  So what did the DWP get, Mason asked.  
A4e says that they reported to the DWP the results of a final audit and further investigations.  The DWP says they only got the document yesterday. So was the version of the original audit report which was given to the DWP devoid of all the damning findings and warnings?  Did it amount to a cover-up? 
Mason ended by saying that the future of A4e depends on what was actually submitted in 2009.

Is this the end? Newsnight revelations

When Newsnight devotes nearly 20 minutes to the story you know it's serious.

We got a trailer in the news; and the Guardian published the details earlier tonight.  But the piece on Newsnight was pretty devastating.  A report has been leaked, an internal A4e audit, which found evidence of widespread fraud and irregularity.  Numerous job outcome claims could not be backed up by evidence.  If this was systemic management failure, asked Paul Mason, why have A4e still got contracts?  We were shown David Cameron at an A4e office and told that A4e are paid £170m a year.  Then we were told that 224 client  records were examined from 20 of the company's top performers.  4% of the claims were described as potentially fraudulent and 12% as risky.  These cases come from all over the country.  Employers complained of being given blank forms to sign.

A4e were said to be playing it down and wouldn't be interviewed.  Kirsty McHugh of the ERSA (the industry trade body) said that appropriate action had been taken.  But the DWP never saw the document.  Why not?  And what did A4e do about it?  Mason said that there were questions for the politicians.  The government has a duty of care to the unemployed who are being sent to A4e.  No one from the DWP would be interviewed.

That gave free rein to Margaret Hodge, who talked of a "shocking catalogue of incidents" and fraud being "erndemic in the company".  Any manager of moral integrity would have shared this evidence with the DWP.  Hodge is sure that it's a systemic issue throughout the company.  She has had over a hundred emails on the matter.  The company has been greedy, she said, and she wants their contracts suspended.  people will lose trust in the system as a whole.  She rejects the idea that this was all in the past and couldn't happen now.  She believes that the culture in A4e hasn't changed, and they are not an appropriate company to be getting all that money.

Liam Byrne was also interviewed.  He wants to know if ministers knew about this when A4e got the Work Programme contracts, and what checks are now in place.

The government is now in a difficult position.  Trying to bluff this out, when even the BBC have got their teeth into it, makes them look complicit in fraud.  But pulling the plug would be very messy.

If I had to bet on it?  I think it's the end for A4e.

Stop press - Newsnight tonight

We've just heard that Newsnight (BBC2, 10.30) has a special report tonight, 22 March, on A4e.  They have a leaked report, A4e's own audit, from 2009, which suggests widespread potential fraud.  Paul Mason says that it reveals that A4e knew that its controls were "minimal".  It surveyed only the top 20 recruiters in the company, and found that 8% of the outcome claims were potentially fraudulent and only 70% could be verified.  Employers say that they were asked to sign blank forms.  Two of those staff named are still working for A4e.

This could be dynamite!

"All relationships" - and new contracts

It must be serious, it was covered by the BBC.  The new fraud allegations and the DWP's investigation were reported, albeit briefly, on Newsnight.  Paul Mason put a slightly different spin on it.  As the Guardian reported, the government has launched an audit of 10 other A4e contracts.  Mason takes that to mean that it will ask why A4e was given so many contracts; but I doubt that.  It would have to go back ten years to be credible.
Most of the media add little to the press releases of the DWP and A4e.  The Huffington Post carries the reaction of union leader Mark Serwotka.  The Guardian gets someone to explain how the MWA fraud might have come about.  The Mail is remarkably restrained.
At the same time as all this bad publicity, there is good news for A4e.  As reported on FE Week, it is the "preferred bidder" for 2 of the 9 prison education contracts announced by the Skills Funding Agency.  The SFA is keen to make clear that this doesn't mean that the contracts are signed.  There's a "due diligence" stage to go through before they are finalised in the early summer.  But this will be the acid test of the government's seriousness.  I have had to delete comments from people who know, and are concerned about, A4e's role in OLASS, but some of them may now make themselves known to journalists.
A4e has announced that its new non-executive Chairman is Sir Robin Young.  He was a career civil servant before retiring to directorships, and became a member of A4e's board in 2007.  He begins his statement with the words "A4e's role is to improve people's lives".
Back to the investigation.  The government has said that A4e could have its contracts suspended if it is found guilty of "systemic fraud".  It's that word "systemic" which could prove the get-out for A4e.  It seems likely that the instances of fraud are the result of two factors; the intense pressure in the company to meet targets and make the money, with bonuses for outcomes, team prizes etc.; and a large proportion of inexperienced, minimally trained staff.  But if that is the case, should it let A4e off the hook?

At last, Newsnight - but nothing new

Well, the BBC finally got round to reporting on the A4e story, on Newsnight tonight.  But it was half-hearted, just pulling together what everybody else has reported - including using the whistle-blower Catherine who made the front page of the Independent.  She told her story briefly; and A4e had had time to come up with a refutation.  She was not told to work for one week without telling the Jobcentre, they say.  It was only one day, an unpaid trial which doesn't have to be notified to the Jobcentre.  This is what tends to happen.  A whistle-blower got it wrong / is not telling the truth / misunderstood what was said.  And what can Catherine do about that?  Margaret Hodge said that she had received an "astonishing" number of allegations and wants A4e's contracts to be suspended.  Paul Mason, who had started by describing the "pally" history between A4e and government, ended with a mention of the employment of David Blunkett and Jonty Oliff-Cooper.  So nothing new.  But the BBC may now feel that it's done its bit.

Questions

Inevitably the publicity has died down.  Liam Byrne has sought to revive it - he's Labour's shadow Work and Pensions Secretary - by claiming that Cameron and the government knew about the fraud investigations at least 10 days before Emma Harrison was appointed, in a blaze of publicity, as Cameron's "families champion".  The Independent reports this, along with Margaret Hodge's plans to submit a dossier of whistle-blowers' allegations to the DWP.  They get a statement out of the DWP:  "We have been clear that if there is any evidence of systematic fraud at A4E... we will terminate existing contracts. We welcome A4E's decision to have a full independent audit. These cases all relate to previous back-to-work schemes. None of these apply to the Work Programme."  So define "systematic".  But Liam Byrne is on sticky ground rather than the moral high ground, and he knows it.  A4e's rise and rise was down to his government.
The Telegraph has the same story, but it also reports A4e's response to the "claims that its staff stole vouchers intended to help the unemployed buy clothes to prepare for job interviews."  A4e says that it's the company which buys these vouchers.  "'It’s our profit margin that is affected by buying them, not the taxpayer.' He said that A4e was not aware of the alleged thefts and had any such action come to light a “robust” internal investigation would have been carried out."  This is a remarkable example of not getting the point. 
If you didn't read newspapers or the internet, and depended entirely on the BBC for your knowledge of what was going on, you'd still be largely ignorant of the A4e story.  The Mail drew attention to this reticence on the part of the BBC, which ignored the growing chorus in the press following the meeting of the Public Accounts Committee and didn't mention the company until the news broke that four employees had been arrested.  Since then the coverage has been minimal.  They have had to report Harrison's resignation as "families champion" and then as chair of A4e, but with hardly any background.  The Daily Politics, which had Harrison as their guest of the day only a few days before, seems to have taken a vow of silence on the subject.  Newsnight mentioned it, but with a tinge of sympathy for Harrison and little background.  So why has the BBC been so reluctant to report this?  One of our correspondents suggests that it's because Chris Grayling used to work for the BBC.  How very cynical!  It's been obvious for the last few years that while Emma Harrison popped up on all sorts of BBC programmes, from The Moral Maze to Masterchef, there was a remarkable ignorance in the Corporation about her company.  We need some sort of explanation.

New Deal on the BBC

The Radio 4 File on Four programme on 23 March (8.00 pm) will be dealing with unemployment. The website says: "The government is promising extra help for people out of work during the recession. But, as Britain braces itself for a rise in unemployment, Allan Urry reports from the communities already hardest hit and asks what redundant steelmakers, public sector workers and others joining the dole queue can really expect at the Jobcentre." Since they've been asking for people to tell them about recent experiences with New Deal and FND, we should expect that they will be focussing on that. Which will be a novelty. Until today it was never mentioned, either by the BBC or by politicians. Last night BBC1's Newsnight had a discussion about the latest unemployment figures. They are unexpectedly down in some places, up in others; but there has been a big rise in the number of people who are not working, for whatever reason, and a 10% rise in the number of long-term unemployed. Jim Knight MP was wheeled out, as usual, to defend the government's record, and said that they had to "keep up the investment", mentioning the Future Jobs Fund but not New Deal. What about the fact that there's a real shortage of skills in the new industries? Apparently new "skills academies" are being set up (who'll be running them, I wonder?). So why, one might ask, is so much money being spent on the privatised New Deal and FND if it's so irrelevant that it's never mentioned?

But today the BBC's business news pages carry an article based on the experience of a 53-year-old unemployed man in Wolverhampton. And towards the end it mentions New Deal. "The New Deal 50 plus scheme, which is aimed specifically at older jobseekers, was replaced in many areas of the UK in October 2009 with the Flexible New Deal which caters for unemployed people of all ages. One of the differences between the two is that you can join New Deal 50 plus after six months of unemployment but most people cannot join the Flexible New Deal until they have been unemployed for 12 months. So some people over 50 are getting unemployment help sooner than others simply because of where they live."

It may all become irrelevant after 6 May. But then again, it may not.