Half a page in Private Eye

Yes, the latest edition of Private Eye devotes half a page to the continuing saga of A4e.  While there's nothing new, there are some interesting elaborations on what we already know.

There has been speculation that the system of giving bonuses to staff who get somebody into a job fuelled the temptation to cut corners and even commit fraud.  A4e actually admitted to MPs that the practice "may have been a driver for individual malpractice".  But Rob Murdoch said that he thought the problem had been solved by moving to group bonuses.  I doubt it.  It doesn't cure the culture of relentless pressure to reach targets and make money.  As we have said, A4e isn't the only company to use bonuses for job outcomes, but it seems to be the only one in which the practice has resulted in scandal.

The article cites what happened in Edinburgh over local claimants' battle to be represented by a support group known as ECAP.  This is something we reported on in the past.  Two people were "sanctioned" simply because they insisted on having an ECAP member with them at interviews with A4e.  Both won their cases at tribunal.

Finally the writer turns to the two new contracts for prison education, provisionally awarded to A4e.  He reports that the two most recent Ofsted inspections of A4e's prison contracts were pretty damning and wonders how they could be given new ones.

I'm sad to see that the owner of a blog which has been tireless in its criticism of the treatment of the unemployed has decided to wage war on Watching A4e.  His conclusions are bizarre, and I won't waste time trying to answer them.  I don't suppose it will help to say that we are both on the same side, although our approaches are different.

There seems to have been a hiccup in the comments notification recently, so apologies to anyone who left a reasonable comment which was published late or not at all.  

Problems and opportunities

More problems over the introduction of the Work Programme have been brought up at a Work and Pensions Committee hearing. A4e's executive director Rob Murdoch is chair of the ERSA, the industry's trade body, and he expressed concern over the 3-month gap between the old contracts ending and the new ones starting. The big companies can cope with this, but the smaller ones can't, and are having to lay off staff. "Social enterprises" are concerned, too, that they are being signed up by the prime contractors simply as window-dressing, because the contracts demand it, rather than with a genuine prospect of involvement. What seemed so simple to the government is rapidly unravelling.

Meanwhile, A4e's Mark Lovell (who is "in charge of A4e", according to the Spectator - but then the company seems to have a number of bosses) says that we're wrong about there being no jobs. In the Spectator interview he assures us that, "We have never been in an economy where there aren’t suitable jobs for the people who walk through our doors." He quotes the ONS figure of 500,000 vacancies in the Jobcentres, and says that this is only one third of the total. This will come as a surprise to those who know that a great many of the vacancies in the Jobcentres are not jobs at all, but spurious "home working opportunities" and adverts by agencies. Still, Lovell is clear about A4e's value. "During a recession you tend to find that employers often do more by word-of-mouth recruitment. The role of brokers who put people in touch with these opportunities is even more important during the recessionary cycle." The writer of the article, Peter Hoskin, doesn't question this, or bring up the embarrassing statistics.

Another of the government's big ideas is that groups of workers in the public sector should turn themselves into "mutual pathfinders", becoming independent co-operatives. Just once, in the election campaign, a spokesman let slip the real agenda - that these mutuals would then be able to bid for contracts. There's nothing of that in the piece on the Thirdsector website. We are not to suspect that this is a prelude to privatisation, when the mutuals will be outbid by the private companies. But there's a small clue in the fact that A4e is one of the organisations which will provide mentors for these new mutuals.

Round-up, 18 June 2010

There is still no news of the Channel 4 programme, "The Wager", featuring the A4e boss whom the Guardian called "the ubiquitous Emma Harrison". But it's Rob Murdoch, the company's Executive Director, who has been in the news this week - or, at least, in the Telegraph. On Thursday the paper called on him, and on Alex Pollock of Avanta, for a comment on the fact that "Long-term jobless soars to 13-year high despite £2.8bn public spending". Later in the same day the headline had changed to "New jobseekers 'squeeze out' long-term unemployed in rush for jobs" but it was still Pollock and Murdoch who supplied the point of view of the contractors. They have something of a balancing act to perform at the moment. They can't very well disagree with government policy, past or present, and so have to insist that the contracts to assist the long-term unemployed have "worked". At the same time they need to talk upthe difficulties of finding jobs for this group, as new contracts are drawn up.

There has been the usual crop of PR pieces for A4e in the local press, but an item on their own website, on the success of a student at Vox, their private Pupil Referral Unit in Stockton, may indicate more than a passing interest in the government's education policy. Many of the "free schools" announced today will be managed by private companies on behalf of groups of parents, teachers or charities, and we know that Serco is one of several companies involved. At the moment these schools are meant to be "not for profit", but for companies like A4e and Serco which are already heavily involved in education it makes financial sense to take this next step. We must continue to wait and see.

"Providers of New Deal to voice concerns"

There's to be a meeting tomorrow, 2 June, between the "minister for work", Chris Grayling, and the body which represents the New Deal providers. That body, the Employment Related Services Association (ERSA) is chaired by Rob Murdoch, who is an executive director of A4e. The Financial Times reports on this today, and says that the providers "have spent millions bidding for the second wave of Labour's Flexible New Deal contracts". It goes on: "Those contracts were put on hold just as they were about to be awarded when the general election was called. But the existing providers also hold contracts under the first wave of Flexible New Deal that run to 2014." Current stop-gap contracts are due to stop taking on new clients next month, and the government wants the Work Programme up and running by April next year. Given that the government wants to roll up all the various existing contracts into one provision and put people on it much earlier, it "implies larger scale contracts", says Murdoch. He points out that if providers are only going to get paid for outcomes, it "has big implications for cashflows". If an organisation has to wait longer for payment, only the biggest companies can afford to bid for the contracts and stump up the money. Murdoch also has a threat for the government. "If they breach contracts, that would be very negative for how the provider market looks at the changes."

This is something which, presumably, the government has thought about. They have suggested in the past that they want to get smaller organisations and the "third sector" involved, but that will only happen if they act as sub-contractors to the big companies.

Bits and pieces

Two pieces of news this week - unrelated, of ccourse. From the South Yorkshire Star newspaper we learn that in the list of the 100 British companies with the fastest-growing profits, "A4e, whose services span employment, education, enterprise and tackling social exclusion, was placed 83rd after profits rose by 46 per cent to £8.2." And from all news sources we learn that unemployment has risen to 2.5 million.

Demos has produced a report flashily entitled "Liberation Welfare". Demos is a "think tank" which has in the past produced policy ideas for Labour and now, with its Open Left project, seeks "to create a space for open debate and new thinking about the kind of society Britain should be and how to bring
it about. This should be based on idealism,pluralism and radicalism." However, it gives "Special thanks .... to Reed in Partnership and A4e. Without their financial support this project would not have been possible." So we know we are not likely to get an objective view of welfare reform; and indeed the report doesn't question the use of private companies. Rob Harvey and Rob Murdoch from A4e have contributed a sensible article on reforming housing benefit;and much of what is in the report is equally sensible. But what is wrong with Demos' whole approach is the acceptance of private profit at the heart of welfare "reform".

Have you ever been offered a job? If you're a high-flying, skilled person with a good job you may have been head-hunted by another company. But the vast majority of us have always had to apply for jobs, or go out and ask if there are any vacancies, and then hope that we'll be the chosen candidate. But you'd never know this from David Cameron's lastest populist statement of intent about the work-shy. "If you refuse a job offer you'll lose your benefit," he said. Labour plaintively replied that it was already the case. And indeed it has been true since the year dot. Back in the 1960s there was the green card system. The Labour Exchange sent a claimant off with a green card to an employer who had vacancies. The employer had to sign the card to prove that the claimant had turned up; without that proof, benefit would be docked. But even then, the employer had the choice. Some claimants, then as now, were simply unemployable; and a few didn't want the job so could easily put off the employer. Nothing much has changed. It is very rare for an umployed person to be offered a job which he hasn't actively sought; and very rare for someone to go after a job, be offered it and turn it down. So what does Cameron intend? Nothing, I suspect. Once again, the people with the power demonstrate their ignorance of real life for the 2.5 million unemployed.

"Joined Up Moving Up"

A4e's news page reports: "The Welfare to Work Panel’s report 'Joined Up Moving Up' was launched today at a well attended and successful event in Central Westminster Hall. The Welfare to Work Panel’s report 'Joined Up Moving Up' was launched today at a well attended and successful event in Central Westminster Hall. Employment Minister Jim Knight spoke alongside panel chair Keith Faulkner from Working Links, Rob Murdoch from A4e, Chris Ledgard from Collinson Grant and CBI Director of Public Services Susan Anderson."

This panel was formed by the CBI, so you would expect that it would lean towards private business interests. Its Chair, Keith Faulkner, is also Chairman of Working Links (Employment) Ltd, one of A4e's competitors. Selections from the contributions at the launch can be watched here. A4e's Rob Murdoch talks about independent providers bringing "fantastic innovation", a personalised service and reduced expenditure on benefits. We need to capture that innovation, and develop more dynamic services to get people into work. The role of prime contractors is to ensure that all the services in an area are meeting the needs of the customer. The "supply chain" must be healthy and thriving to provide the best services. There was also a heavy hint about A4e's ambition to provide a more holistic service, one which can have an input into many aspects of the life of an individual or family - the super-contracts which they advocated to the DWP. Murdoch said that welfare reform cuts across all departments because it impacts on all fronts. Customers have a multitude of barriers, and they want to work with customers on all barriers to provide a more coherent service.

Learning from Israel?

In Israel A4e is known as Amin. A group of British Labour MPs has been in Jerusalem looking at how they run Israel's welfare-to-work programme, says the Jerusalem Post. You may recall that A4e got the contract in Israel despite the fact that it was against British government policy but with official help. Read the details here. Now A4e's Rob Murdoch (the guy who did such a dismal job of defending the company on the Radio 5 Live programme) has been showing off A4e-Amin as a model for Britain to follow. And, ironically, the MPs seemed proud of the fact that A4e is a British company. ' "It was fascinating to see how welfare-to-work programs are being carried out in such a diverse society as Israel," added Andrew Gwynne MP, parliamentary chairman of Labor Friends of Israel. "And it's all built on a number of the initiatives first implemented by the Labor government in the UK." In addition to Gwynne, the group included MPs David Cairns, Jane Kennedy, Anne McGuire, Meg Munn, Jamie Reed, Derek Twigg and Malcolm Wicks.' Perhaps we should explain to them what the "Wisconsin model" actually means - making welfare benefits time-limited, tieing them to job-seeking activities, then throwing people into the gutter to be picked up by charities. Is that what these MPs envisage for Britain?

A4e - a company that makes its money from government contracts

In 2008 I set up a website to keep watch on the Sheffield-based company A4e. On 14 July 2009 they got it banned as "defamatory". To them, the truth is too uncomfortable. But truth is not so easily suppressed.

A4e is one company among many which has made huge profits from the contracting out of public services. Some, like Capita, have concentrated on "back-office" services which involve systems more than people. A4e, however, has made its money from contracts which deal directly with people - the poorest people in the country. That's not how they put it, of course. They are "improving people's lives". That claim must be examined. They say that they're about "public service reform". You can read all this rubbish on their own website. The Labour government has continued the work that the Conservatives began of outsourcing public services, enabling them to sack civil servants and "reduce the size of the state". This has brought no benefit to the public, and it has transferred taxpayers' money, in vast quantities, into private hands. In A4e's case, this means the hands of one person, who has become a very wealthy woman. Money intended to provide services to the those most in need goes instead into the bank account of Emma Harrison. This is now considered normal. We challenge that.

WHO THEY ARE

Emma Harrison is the Chairman and founder of the company. The Executive Chairman isMark Lovell - "An entrepreneur and business leader focused on high growth business strategy in public service markets, Mark has led the strategy for the growth of A4e Ltd from start up to a £100m business over the last 16 years." - so says A4e's website. Bob Martin is the Group CEO; he was recruited from Capita, the largest company benefitting from government contracts. Rob Murdoch is responsible for managing the competitive tendering and business development arm of the business. He has worked in the education and training sectors, as well as the finance and equity markets, and recently went to Istanbul to push A4e's business. The Sales Director is Rod Newey. He went from running a business to running the Merseyside TEC. He headed A4e's Business Link involvement, and now leads the push into the international market.

A4e's staff, certainly at the lower levels, are paid poorly in comparison to public sector workers. Many are temporary staff or on short term contracts, are minimally qualified. This is inevitable but goes some way to explaining the poor service which many clients experience.

FRAUD

2009 brought plenty of bad publicity for A4e with a Radio 5 Live piece on its welfare-to-work programmes, then an Observer article on fraud investigations and a Channel 4 news piece which backed up the charges.

From The Telegraph 9 September 2008 "The latest register of members' interests shows that the former home secretary's incomings over the past year or so were boosted by a £30,000-a-year salary from a Sheffield-based international training and support services company called A4e. This is supplemented by the £50,000 he receives each year from the Sun newspaper, £30,000 from a Texas-based security company called Entrudler he had with Kimberly Quinn, the former publisher of The Spectator. Blunkett, 61, the MP for Sheffield Brightside, has garnered some useful headlines for his new employers A4e with the Star newspaper in his constituency reporting in January: "A4e's free legal line wins Blunkett's approval". That was shortly before Blunkett took a job with the company."

This came as no surprise to anyone who had followed A4e's fortunes from the early days, and who suspected that there was a friend in high places who was instrumental in securing all those contracts. But it does raise questions about how an MP can be employed by a company which has government contracts.