Help to Work - at least for G4S

At last, we know four of the companies which have won the contracts to deliver the inappropriately named "Help to Work" programme.  The Financial Times reveals that they are G4S, Seetec, Interserve and Pertemps.  Why it hasn't named the other two, I have no idea, but A4e hasn't said anything, and Serco has launched a rescue rights issue, so perhaps they both lost out.  The FT says that G4S is the biggest winner.  It also says: "It comes less than three weeks after the British government lifted a ban on G4S bidding for public sector work and suggests that Whitehall is taking a favourable view towards one of its largest contractors, despite insisting that the company remains under close scrutiny."
But hang on a minute.  The bidding must have taken place during the time in which that ban was supposed to be in place.  And the company was "cleared" just in time for the announcement of its success.  Who is the government trying to kid?

The whole "Help to Work" story today has been utterly depressing.  This morning, on Radio 4's Today programme, Evan Davies had the dubious pleasure of trying to interview the appalling Esther McVey.  I bet he didn't want to.  When he tried to pose questions to her boss, Iain Duncan Smith, recently he ended up being complained about by ignorant listeners.  McVey did the same trick this morning - spouting utter twaddle and not answering questions.  The reaction to the new scheme in the media has been predictable.  The Guardian and the Independent get it right, while the Express salivates at the prospect of bludgeoning the poor even harder.  The BBC interviewed Kirsty McHugh of the ERSA, who said what you would expect since she's paid by the outsourcing companies, and Richard Johnson who used to work for Serco and talked sense.
So let's spell it out.  This scheme is largely about IDS's temper at the failure of the Work Programme, which he interprets as the failure of the unemployed.  So they must be punished.  And it will have the advantage of taking loads of people out of the unemployment figures.  They will be sanctioned en masse, or driven into the black economy, or forced onto workfare and so counted as employed.  
Newsnight is doing something on the scheme.  I don't think I'll watch.

Ingeus sold and WP extended

There's an interesting report in the Financial Times today about developments in the Work Programme.  Ingeus Deloitte, the company which originated in Australia, has been sold to an American company, Providence Service Corporation.  The Work Programme business, says the FT, is worth £150m a year to Ingeus, "which is understood to have won such a large share of the market by bidding more cheaply than rivals".  Despite the failure of the WP to help the vast majority of those referred to it, there are obviously profits to be made.  And Provident can simply take over Ingeus's activities by bidding for the offender rehabilitation contracts (and anything else on offer).
The other interesting point in the article is that the Work Programme contracts are due to end next year, but they are expected to be extended to 2016 "to avoid the general election".  (Labour has already said that they wouldn't renew the contracts if they get into power.)  By this stage the "attachment" payments should have ended; would we be told if they haven't?  The contracts didn't seem to be generating much profit for the providers, but Provident obviously thinks that the potential is there.  Richard Johnson, formerly of Serco, says that can only come from cutting costs, but it's hard to know how companies like A4e can cut costs any further.
It makes me wonder, again, whether A4e is in line for a buy-out.  Would Emma Harrison be prepared to sell her 85% stake in the company?

"I don't believe it"

There are two big stories to look at today.  First let's look at:

SANCTIONS FIGURES
The latest sanctions figures have, at last, been published.  Between October 2012 and June 2013 they show a rise of 6% on the same period a year before, to 580,000.  Think about that - more than half a million.  The BBC website explains the new rules, and says that 53% of the decisions were at the lowest level, up to 13 weeks, for such failures as not attending an appointment.  Then it says that about 1 in 5 were for failing to keep an appointment with an adviser.  Esther McVey is trotted out to speak for the DWP, saying that sanctions were only used against those who were "wilfully rejecting support for no good reason".
In another piece the BBC's Sean Clare looks at "Life when the Jobcentre says you broke the rules".  It brings out some of the absurdities and injustices of the system, with several horror stories.  The CAB is quoted as saying that they've seen a 64% rise in people coming to them because of sanctions.  The PCS union, whose members have to administer the regime, says, "There's no question that there is an overarching pressure to enforce the sanctions regime as strictly as possible."  The DWP, of course "flatly denies" this.  But the article has stories which cannot be brushed aside in this way.

"UP TO THE JOB?"
BBC Radio 4 did a "File on 4" programme yesterday on the Work Programme, which gives me my title for this post.  It seems that Esther McVey has rapidly absorbed her boss's approach to uncomfortable facts; three times her response was to say that she didn't believe it.
The programme started in Eastbourne, where unemployment is a lot lower than the national average, but the local MP Stephen Lloyd (a Lib Dem) is angry at the number of people who have done their 2-year stint on the WP and been failed by it.  One 47-year-old man said that there was no respect and he was treated like a child.  A woman said she'd seen her advisor only once a month.
The WP providers there are Avanta and G4S.  One older woman who had a good experience (and found a job) through a sub-contractor of G4S was interviewed.  But the programme then turned to Richard Johnson, formerly of Ingeus (didn't he work for Serco too?).  He said that the quality of the contract was deteriorating because case-loads were now up to 240 per adviser.  McVey said she didn't believe it.  The official figure is 80 - 140.  And, she said, people can make a complaint.
The point which emerged was that of the just under 2.5 million who are unemployed, 900,000 have been out of work for a year or more and these, along with those with medical problems, are not being helped.  A consultant, a chap called Grimes, said that the sanctions against the worst-performing providers (the 5% "market shift") are inadequate.  The DWP should remove their contracts altogether, but the providers know that this is not going to happen.
The attachment fees are due to end in April 2014.  Johnson spoke about the discounts of 30% or more offered by some of the providers when they bid.  These are back-loaded to years 4 and 5 (i.e. at this point the providers will get 30% less for outcomes) on the assumption by the providers that the government would never let this happen.  The contracts, he said, are not viable at this price.  Deloitte's, who partnered with Ingeus, are now trying to sell their shares, and Johnson thinks it's because they understand the implications of the discounts.  "I don't believe that", said McVey.  She thinks Deloitte's want out because they are doing very well.
Turning to those on ESA, the programme highlighted a man who had been sent to Triage Central.  In 7 visits he saw an advisor only once and got no help at all.  He said that the emphasis was on what he was doing wrong.  Disability Rights UK said that the Work Programme isn't working for disabled people, and a 90% failure rate is not acceptable.  Once again, McVey said, "I don't believe it."
More or less the last word came from Grimes, who said that the long-term unemployed were at the back of the queue and moving backwards.

Lots to comment on, I think.

The failing Work Programme - the PAC report

It's all over the papers this morning; the report of the Public Accounts Committee into the Work Programme.  We already knew its conclusions, but the various newspaper articles highlight different aspects of it (when they can be bothered to go beyond the press release).  The Telegraph, for instance, reports that some of the companies are in danger of being stripped of their contracts and even of going out of business.  The Guardian points out that all 18 organisations involved have been put on "performance improvement plans", with 7 of them being sent formal warning letters.  Margaret Hodge was also angry that the DWP had published unvalidated data from the ERSA.  We do learn that the next set of performance data is due to be published in March.
It would appear that Richard Johnson, formerly of Serco, is now the go-to person for an opinion on all this.  He was the man who was in charge of WP stuff for Serco, but now that he no longer works for them he's free to criticise.  He said, on the BBC Today Programme this morning, that the design of the contracts made "creaming and parking" inevitable.  I notice that the BBC is asking for experiences of the Work Programme, so perhaps they are planning a proper investigation of the subject.  Let's hope so.

"The Report" revisits the Work Programme

Six months after it first looked at the Work Programme, The Report on BBC Radio 4 revisited it.  Helpfully, the BBC published a piece on its website which could have avoided the need to listen to it at all.  But it was interesting.  The main focus was on those charities and voluntary organisations which are struggling, finding the WP not financially viable.  Despite gagging clauses in the contracts which forbid sub-contractors from doing anything to "damage the reputation" of the primes or "attract adverse publicity, one charity, the Single Homeless Project, has pulled out of its contract with Seetec and has been the first organisation willing to talk to the media.  What it boils down to is that the primes, the big companies, are not passing down the money to the charities to enable them to deliver the support necessary to the clients; they are only passing down the risk.

The Boston Consulting Group has produced a report pointing out that the DWP itself says that the "dead weight figure" - the proportion expected to get work if there was no WP - is 28%, and the assumption in the WP is that between a half and three quarters of the money paid out will be on those dead weight numbers, i.e. unnecessarily.  Chris Grayling and the DWP say that this is a misunderstanding of the figures.  Richard Johnson, who used to be with Serco and was involved in the contract negotiations, says that the model is wrong and is encoraging "creaming and parking", as so many said it would.

So what of the clients, asked the reporter.  Of the several clients who were interviewed six months ago, none have found work.  One, an A4e client, has had two interviews but there were 170 applicants for one of the jobs.  He said he had had no support from A4e, but the local office disputes this.
Back to the voluntary organisations, which the primes were obliged to include in their tender for the contracts.  They were called "bid candy" by some, and there are those which were not even aware that they had been put into a bid document.  Others have not signed a contract and have had no involvement with the WP.  Grayling had said that he would crack down on this, but now says that he hasn't received a single complaint about it. 

The Financial Times revealed the other day that the DWP has contingency plans in case A4e is stripped of its contracts.

That document

Last week a set of data was broadcast round the internet.  It seemed to show some performance stats for a whole lot of A4e's "partners" on the Work Programme.  I had a look, decided it was very difficult to interpret and not very relevant anyway.  But now Left Foot Forward have got hold of it and have asked A4e about it. The interpretation Left Foot Forward puts on it is that fewer than 10% of clients have found jobs, and fewer than 2% have held on to the job for 26 weeks.  A4e says that the data "was drawn from a test website which is confidential and protected" and "was obtained from a password-protected secure site", so it's not clear how it got out.  A4e threatens legal action "should you publish this data or make any of the inferences set out."  Left Foot Forward couldn't get any further clarification of what law A4e intended to use.  I remain dubious about the value of these figures.
It's timely that Richard Johnson, who used to be head of welfare-to-work for Serco, has written about the need for absolute openness in the WP performance figures.  He talks about the PAC's questions about money being creamed off by providers.  "One provider, in particular, appeared to be behaving like the fattest of cats, pouring many millions of dividend cream into her own bowl."  And he wants an independent regulator.  It's an interesting read, even though I don't agree with his conclusions.

Publicity and gaps

A posting from Emma Harrison on A4e's site says that she now has a daily column in Express newspapers. I can't find it in any paper today so perhaps that's a treat to look forward to tomorrow. You are invited to contribute to "Emmas [sic] Top Employment Tips". It's a great bit of advertising, if not of punctuation.

The Financial Times has pointed out that there will be a gap of several months between when the current contracts end in half the country and the Work Programme begins. About 50,000 people who would have been placed on these programmes will not be - and that's assuming that the new contracts start on time. Labour says that this will mean people staying on benefits for longer, while the DWP says that people will get "enhanced support" from Jobcentre Plus. The ERSA, the trade body for the providers, wants the contracts extended to fill the gap. I suugest that this is an ideal opportunity to judge the value of the whole welfare-to-work industry. Will the DWP have the bottle to compile the stats to show whether it makes any difference to whether people get jobs? I doubt it.

Richard Johnson of Serco has been philosophising again, on the Indus Delta site, on how wrong we are to think that there are limits to the number of jobs available.

The View from Serco

With the announcement of the "framework" contractors for the Work Programme due in November, there's an interesting blog post by Richard Johnson of Serco which shows how that company is steering the process. Since Serco's entry into the sector they have given the impression of calling the shots, so Johnson's piece merits some study.

It starts with a nod towards the real point of this scheme, the people who will be subjected to it. "The potential of the Work Programme is quite extraordinary – using savings generated in benefits to extend services to millions of people currently excluded by unemployment. Many of these people are locked out of society as a result of their worklessness, they are trapped in a dependency on benefits that is debilitating, depressing and so horribly destructive." (Note the vocabulary; it would have been appropriate to talk about people "trapped in dependence on benefits", but using "dependency" instead reveals the laziness of thinking.) He then goes on to hype up the scheme as potentially much more than an extension of New Deal. It means that big companies are going to have to take all the financial risks; it is "a small part of an idea which is actually about the creation of a new structure, in which the state defines the desired product or impact of the frontline service and then contracts with an organisation to deliver those outcomes." In other words, the state gets out of the way and leaves companies like Serco and the rest to deliver the goods in whatever way they see fit.

He then defines "Tier 1" companies. I confess that I would need a translation of some of this, but what he has in mind is that between three and six companies would carve up the country between them, with only one company per region, and no company having more than five regions. This, he maintains, provides "appropriate" choice, but there is a clear failure of logic here. It delivers no choice whatever. The DWP proposes 11 regions, so if Serco gets 5, as I'm sure they want, it doesn't leave much for A4e and the rest. "Tier 2" organisations are the big companies and their sub-contractors, including voluntary organisations.

How much of this describes what is actually in the pipeline, I don't know. Buit clearly Serco, like A4e, see the Work Programme as heralding a whole new way of making large profits from the public purse.