Work Programme stats, and the PAC

We used to complain that no data was being released on the effectiveness of the Work Programme.  Now we have all the data we could wish for, it seems, in the figures put out yesterday.  You can see the document here.  Some key figures are on the first page, but you'll need to get your calculator out.  If we look at the "by all referrals" June 2011 to Dec 2013, we see that just under 19% of those on the programme long enough got an outcome.  (The Factcheck blog says 17%.)  But then look at how that tapers off, so that only 48,000 people were in work long enough for the provider to claim the full payments.  In other words, the jobs tend to be temporary.  24,000 got 3-6 months of work, but then were back on the programme, and in all 352,000 have finished the WP and been referred back to the jobcentre.  The other key fact from all of this is that while the figures for JSA claimants are considered satisfactory, they are terrible for those on ESA.  For a good summary, read Channel 4's Factcheck blog.  Looking at the breakdown by provider, we see that A4e isn't the worst-performing, but it's a long way from being the best.
Is it worth it?  That's the really important question.  Millions have been paid out to companies like A4e to achieve only a little above what would be expected with no intervention at all (and below that with ESA).  The likelihood is that the vast majority of the jobs are down to the improving economy.  So what's the point?

Other news takes us back to ATOS.  The Public Accounts Committee had a go at the civil servants in the DWP and one of the bosses of Atos over the failure of the new PIPs assessment contract.  The Guardian reported Margaret Hodge's interrogation of Robert Devereux, the Permanent Secretary.  They have crossed swords before, and her questions revolved around the same issues as she has fumed over with the Work Programme.  How can you give a new contract to a company which is in the process of bodging a similar contract?  (My phrasing, not hers.)  He said, "We are making a decision on the bids in front of us."  As he has said before, the procurement process deliberately doesn't look at past performance.  And they did not check that what Atos had put in its bid document was true.  On the PIPs bid, Atos had claimed to have agreements with a large number of hospital trusts and physiotherapy practices, but far fewer actually signed up in the end.  That meant that another claim, that everyone facing assessment would have a centre within an hour's travel time, has gone by the board.  Huge backlogs are building up.  Hodge had a go at the Atos person for misleading the DWP.  But this sort of thing is common with the procurement process which the DWP has shaped.  The big companies must form "partnerships" with smaller outfits, and can then list on their bid documents a number of sub-contractors who have, in fact, signed nothing and can duck out once they see the small print.
It's obvious to everybody that there has to be a better way.

It wasn't me, it was him

The Public Accounts Committee has published its report on Universal Credit.  It's pretty damning.  There's a comprehensive account in the Guardian.  Since then, there has been a concerted attempt by Conservative MPs to place the blame squarely on Robert Devereux, the Permanent Secretary at the DWP and the accounting officer for the project.
The Times said this morning that Iain Duncan Smith had tried to get Tory members of the committee to blame Devereux.  That's been denied.  The report doesn't blame individuals, but Margaret Hodge said this morning that the responsibility was from the top down.  Since then I've heard three different Tories blame the civil servants.  Francis Maude was driven to explicitly exonerating IDS.  He commissioned the review in 2012, says Maude, which identified the problems; and he described him as "visionary".
Whatever happened to ministerial accountability?  Younger readers won't be aware that there was a time when the ministers took responsibility and resigned even when the disaster clearly wasn't their fault.  Not now.  But if Devereux does go, he will be free to speak.  That might worry Duncan Smith.
Many people have asked why IDS is still in his job.  Surely his track record should have got him reshuffled to the back benches ages ago.  My feeling is that IDS is so hated, so much the focus of people's anger at the cruelty of the welfare "reforms", that it's better for Cameron to leave him in place and let him soak it all up than to put someone else in the firing line.

"It's who you know" - networking and A4e

The unemployed are increasingly being lectured about the benefits of networking.  For most people this is irrelevant.  Our networks don't include anyone who could give us a job.  But for outsourcing companies like A4e networks are vital to the business.

This is a simplified version of the A4e network.  Top left, David Blunkett, Secretary of State for Work and Pensions when the w2w contracts were privatised; after ceasing to be a minister he became a paid "advisor" to A4e (and still is).  But with Labour out of power it was useful to get a Tory on board; Jonty Oliff Cooper used to be an aide to David Cameron's strategy director Steve Hilton and was taken on by A4e as their director of policy and strategy.  He is not now listed as part of A4e's senior team.  Moving clockwise, we get to David Cameron.  He was sufficiently persuaded of Emma Harrison's capacities that he made her his "family champion".  And then there's Chancellor George Osborne who brings us to George Bridges of Quiller Consultants.  Bridges is a personal friend of Osborne and helped him run the Tories' election campaign in 2010.  So the network helped in the appointment of Bridges and his firm to help A4e revamp its image after the meltdown.  Private Eye points out that the firm, Quiller Consultants, is owned by Lord Chadlington, the Tory peer who is also Cameron's constituency chairman.
The new chairman of A4e is Sir Robin Young, a retired career civil servant whose last government job was as a Permanent Secretary.  The link between him and Robert Devereux,  Permanent Secretary at the DWP, was referred to by Margaret Hodge last week when she described them both as, "A whole lot of good chaps - I understand that the Chairman is an ex-Permanent Secretary, whom, no doubt, you have conversations with."
It's a network that has made millions for Emma Harrison.  What a pity that we can't all do it.

That PAC meeting

You can read the transcript of the Public Accounts Committee meeting on Tuesday here.  Not the bit that was held in secret.  But we did learn that there was another witness besides Eddie Hutchinson whose evidence was heard in private.  She was a whistle-blower who was complaining about what had happened.  For those who don't want to plough through the entire piece I have made notes below.  The characters involved are, on the committee, Margaret Hodge, Fiona Mctaggart, Austin Mitchell, Matthew Hancock and Richard Bacon and, as witnesses, Robert Devereux, Permanent Secretary, Department for Work and Pensions, and Alan Cave, Delivery Director, Department for Work and Pensions, along with Amyas Morse, head of the National Audit Office.

MH not happy with RD.  She sent him the A4e internal report and some emails.  He said there wasn't enough specific information in them to do a proper investigation.  She says he should have come back to her for that info.  He says that Grayling announced his enquiry.  She persists, he is infuriating.  What about the internal report?  He accepted A4e's word that of the 9 cases only 3 were actually fraud, and they related to one person.  But they are going to investigate all the cases.  He says they can't investigate where a company has gone out of business.  R Bacon points out that you can.  MH asks about the audit Grayling asked for.  RD says that it won't be published.  "This is a whole lot of good chaps-I understand that the Chairman is an ex-Permanent Secretary, whom, no doubt, you have conversations with. It is a big company with an expensive PR machine, which we have seen in operation over the past few weeks. They are bound to be good citizens, so we don’t need to have open and transparent oversight of them." - MH.  RD gives the official answer about possible litigation.  Lot of discussion with committee members about this.  RD says all the evidence is that A4e is not fraudulent.  Hillier keen to link value for money to the service her constituents are getting.  RD says the WP is not about the service - if they don't provide the service they won't get paid.  FM wants the evidence that A4e " has in place a system for staff to report improper behaviour or performance management systems that avoid perverse incentives".  

AM: "You have just sat through a long closed session, which produced some fairly damning indictments of both the structures and the practices in A4e and Working Links and which gave several indications of possible fraud. Some evidence has been submitted to us as well-to the Chair-by the people who gave evidence in that closed session. Will those allegations be investigated?"  He is keen to talk about what they do to avoid fraud - mentions Private Eye, about which RD is sarcastic.  He describes controls now in place to ensure claims are correct.  MH: "So is A4e fit and proper to undertake the Work Programme ?"  RD says yes.  

RD goes through all the checking process in detail.  Matthew Hancock asks him the questions which allow him to show how watertight the WP is.  Hodge raises issue of bonuses.  RD says it's not an incentive to fraud because they can't now commit fraud.  Hodge describes the case of a woman who already had a job lined up but was persuaded to sign the forms for A4e in return for £50 for herself.  She thinks this is wrong because A4e did nothing for the money.  RD says the £50 was A4e's and it's within the rules.  Some argument about this.  How can you measure what help was given?  They get on to complaints and argue about that.  

Hillier wants a single hotline for complaints and whistleblowers.  RD says he wants people to go to the provider first then the JC.  FM says: "The reason that I first wrote to the Comptroller and Auditor General about how A4e were behaving was that there was no process where the concerns of my constituents, who were referred to A4e, could properly be dealt with. I just got brush-off letters and there was no process where I could advocate on their behalf. Now that was not always about fraud, but there is a lack of a process."  RD bats that aside.  

Cave admits that they didn't ask for the 2009 report and should have done.  Conversation shows that there were two earlier witnesses, not just Hutchinson.  He later admits that he doesn't know who the other 4 shareholders of A4e are.  FM presses the point about controls needing to be not just financial.  She returns to this.  "What struck me from my contact with people is that a large proportion of those customers are very often not reluctant, but are very keen on getting into work, very keen that the public’s money is properly spent and feel that what they see is not spending the public’s money properly."  (Hancock again feeds RD nice questions.)    RM: "We keep hearing from people that they do not know how they can complain and that they have bullying managers who prevent complaints. I accept that you have not been able to investigate all these cases, but one of the things that I have learned as an MP is that while you get green ink complainers, when you get the same complaint from all ends of the constituency, there is something that you should be alert to, and one of the things that I am very struck by is the number of people who have worked for these companies and say that bullying management means that there isn’t a way in which they feel that they can safely make complaints when they are asked to do things. We have had evidence from people who have been asked to do things that include making up evidence and telling lies. We have not been able to test that evidence in a court of law. Nevertheless, it is quite perturbing that people feel that that is what they have been asked to do and that there is no way they can whistleblow about it."  She refers to a previous witness: "She was talking about a different programme, but it was in this period, and therefore she did not know how to complain. While you are right that the programme that she was asked to lie about was not the Work Programme , if she had known of a safe way of passing it up, that would have equally applied to people who worked on other programmes at that time in that company."  

Mitchell:  " I think Mr Devereux has said that one of these companies could go bankrupt. That is about equivalent to the Governor of the Bank of England saying moral hazard could discipline the banks because they might go bankrupt, too. They are already too big to fail. It is so unlikely. Here is a new category of capitalism that was set up to milk the state. It is not facing the competition of the market; it’s got a safe contract, which just goes on, so the threat of bankruptcy is really hypothetical."

Argument about what "systemic" means.  Then Hodge: " Finally, a public sector contract to build houses, hospitals or schools is pretty straightforward. I am thinking of payment by results-the school is there-and you can keep a little bit of money back to make sure that if anything has gone wrong, you can get it back. Would you accept that a contract that provides human services is qualitatively different? It will work only if you build trust. I think that that is the key thing-there has to be trust in the system. It is partly about the outcome but also about-this is the Fiona point, really-how well the customers are treated. That has to be part of the mix in these sorts of contracts. So it is about the how as well as the how much-I hope that you accept that. If I put it to you that I think that trust has broken down here, in particular in relation to A4e, how can you rebuild it?" Just stonewalling from RD, helped by Hancock.

 

Several points stand out for me.  There is Devereux's determination that anything before the Work Programme doesn't really matter; and the WP is fraud-proof.  Hodge and Mctaggart in particular want to focus on the service customers get, but Devereux thinks that's irrelevant because the companies only get paid if they deliver a service which gets results.  

It's frustrating to read, but not as frustrating as it must have been for the committee members.

 

Meanwhile, Chris Grayling is assuring us that the Work Programme is doing splendidly.  In the Express he says that 100,000 people have found work through it.    

A4e's "abysmal" record

The Public Accounts Committee yesterday launched a blistering attack on A4e during a session on the introduction of the Work Programme.  (See the Guardian)  Why, the committee wanted to know, did a company with such an "abysmal" record get contracts.  Andrew Dutton, A4e's CEO, had to respond to questioning about the company's UK turnover last year of £160m - £180m, all of it from government contracts, and the £11m it paid out in dividends, 87% of which went to Emma Harrison.  The committee chair, Margaret Hodge (a hero of mine despite her politics) ensured that they "spent some time trying to establish where money paid to A4e to deliver government contracts ended up."  She told Dutton, "You're one of the first examples we have had of a company which is entirely dependent on public contracts for your existence. We, in terms of looking for value for money, have an interest in following the pound. All your business is public contracts. You and Emma Harrison have to accept that there will be a different interest in the remuneration and profits made because the profits you make come from the taxes that ordinary, hard-working people pay."   The example of abysmal performance cited was the Pathways to Work programme, with 9% of clients got into work.


Several members of the committee expressed amazement that companies with such a poor record could get new contracts.  But the DWP's permanent secretary, Robert Devereux, confirmed what we have pointed out before - that they can't take past performance into account.  Lots of them had poor records (!)  And since some of the companies bidding were new entrants it wouldn't have been possible.


Fiona MacTaggart MP raised an interesting point about "job substitution" - "companies delivering the Work Programme, getting paid for pushing their clients into jobs that would otherwise have been filled by other jobseekers without the need for a third-party payment."  "In my constituency," she said, "a lot of people are being given work experience, unpaid, in retail, and then the retailers, I think, are being directly encouraged to employ people who have been given this one-month or two-, three-month interview process … and when they're offering jobs, a company like A4e, which operates in Slough, can say to Primark, if you want more of our free workers, I hope you are going to give our people 20-hour-week jobs. I'm sure it's not quite as overt as that, but I believe there is a risk of that happening."  All that Devereux could say to that was that a job was a good thing.  Another civil servant had a more wordy response but didn't answer the question.