Some thoughts on the sell-off

Whoever tweets on A4e's behalf was merrily going on about apprenticeships today, and that was the news on their website.  It's not surprising that there's nothing about the impending sale.  But I'm now wondering whether potential buyers might hold off until after the election.  The result could be a big influence on how much the parts of the business are worth.
Take welfare-to-work.  Labour has said that it would not renew the current Work Programme contracts, but would instead give the organisation to local bodies such as councils and LEPs.  This would still mean the involvement of private companies, but not on the same scale.  A Conservative government would just produce a new variation of the WP.  Would Labour carry on with workfare?  It was a Labour government which started it, after all.  They are pledged to stop it for young people, replacing it with guaranteed (although temporary) paid jobs, but have said nothing about older people.
As for prison education, that depends on getting a government which stops cutting the numbers of prison staff, leaving prisoners unable to attend classes.  And then there's the Money Advice service, another unknown prospect.
The Tories are saying that 30,000 staff are to go from the DWP.  Given how utterly shambolic that department is now, that is frightening.  But could this mean the outsourcing of Jobcentre Plus?  ("We've created [make up a number] private sector jobs .....")  They've been hankering after doing that for some time, and any company in the sector would be scrambling for contracts.  That would make A4e's assets attractive.
Labour intends to subject outsourcing companies to the same transparency rules as public sector bodies, but it wouldn't stop outsourcing.  However, a Tory government would be a much more attractive prospect for potential buyers of A4e.

A4e's accounts

The accounts are now available for the year ending March 2014 - and the company is in profit.

If you want to examine all the figures you can download the report from the Companies House website for only £1.  But the salient points are:

• There's an operating profit of £3.2m for the full year (against a loss of £10.3m in 2012 / 2013).  EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) showed a profit of £7.6m (2012 / 2013 loss of £5.8m).  The Chairman, Robin Young, says that, "we have improved our performance on all our contracts".  
• The Work Programme continued to be profitable, and they expected it to remain so for the duration of the contract.
• The A4e office in Spain was closed and they gave up on prospects of business there because the country wasn't moving to outsourcing fast enough.
• As they stated in the previous year's accounts, no dividend was paid in 2013 / 2014.
• Young talks about their "open door policy" with MPs, and says that most of the 140 visitors "have come away impressed".
• The new IT system, Connect4Work, is working well.
• Although the company originally bid for 3 contracts (Community Work Placement, Transforming Rehabilitation i.e. the Probation Service and Job Path in the Rep. of Ireland) they decided not to submit final bids - a matter, say the directors, of "discipline".
• They are optimistic about opportunities in the "market" of people with special needs.

So it seems that the strategy of reining in their ambition has worked for A4e.

And the poor get poorer

The most telling comment on Osborne's Autumn Statement this week came from Matthew Taylor in a discussion on a BBC programme.  The worst thing about it, he said, was that no one, not even Osborne, believed a word of it.  Those crunching the numbers afterwards came up with a terrifying vision of what the Tories are aiming at; a country which would be back in the desolate and dangerous world of the 1930s, with "the state", that part of the national income spent for the benefit of everyone, reduced to almost nothing.  Certainly there were plenty of hints about slashing "welfare" even further.  I was puzzled by one announcement, which was slipped through barely noticed by the commentators (because it doesn't affect them): the rates of Universal Credit are frozen for those in work (see the Independent's article on this).  Now, I can't make out whether he was just talking about UC, which won't affect most people for some time, or whether he was trying to pretend that everyone is on UC and it will actually mean working tax credits are frozen as well.  There's a good article in the Mirror on why Osborne's vision is so appalling.
In case you want to play the game of blaming someone other than the government and start muttering about pensioners, there was a nasty hidden surprise for many of them.  The so-called triple lock should have given them an extra £2.85 a week, but most of that will be lost as pension credits are lowered; so only those pensioners who don't qualify for extra benefits, i.e. those with private pensions and / or large amounts of savings, will get the full increase.
In the midst of all the gloom and doom there was some good news for A4e.  They have new 2-year contracts to deliver the New Enterprise Allowance mentoring scheme in a further three areas of Scotland.
The Scottish government is furious with the UK government over the Work Programme.  As part of the devolution agreement Scotland is to have control over welfare programmes there, but not UC.  The Smith Commission spelled out that this would include the WP when the contracts came to an end in March 2016.  Like many English councils, the Scottish government wants to devise suitable, flexible support for the unemployed.  But it was told on Tuesday that the current contracts are to be extended for a year.  The UK government says that this was agreed in August, long before the Smith Commission was set up.  So tough.
There are only 6 days left to get evidence to the Work & Pensions Select Committee for their enquiry into benefit sanctions.  The DWP will maintain its lie about sanctions only being used as a last resort, as they've done in an article today in a Scottish newspaper.  I would love the enquiry to conclude that the DWP is deliberately lying and make that known.

Sanctions and lies

The Work & Pensions Select Committee has launched its inquiry into benefit sanctions, something which owes a lot to the tireless pressure of Debbie Abrahams MP.  But if you read its terms of reference (here) you notice some important things missing.  First there's the actual process of sanctioning; the automatic stoppage of money which can't be reversed if it's found to be a mistake.  This is crucial to expose the lie that sanctions are only ever used as a last resort.  And then there's the question of arbitrary sanctions applied by JC or WP staff just because they feel like it or have targets to meet.  The inquiry must hear from victims and whistle-blowers or it's pointless.  The page makes it clear that they can't investigate individual cases, but don't let that stop you if you want to submit evidence.

It gets wearisome to report on Iain Duncan Smith's character and lies.  He knows that he is untouchable and his arrogance has grown to monstrous proportions - as has his rudeness.  There was an incident this week in the House of Commons which demonstrated what one MP called his boorishness.  He had remarked that Rachel Reeves MP, his Labour shadow, "couldn't be bothered" to turn up to vote in a particular debate.  She raised a point of order demanding an apology; he had no knowledge, she said, of why she wasn't there.  IDS showed his contempt by saying something about her being in Rochester (for the by-election).  Reeves denied this and repeated her demand for an apology.  She didn't get one, of course.  This wretched man just smirked.

Then there were the "angry scenes" described in the Mirror at the Work & Pensions Select Committee's hearing yesterday.  Now, I missed this part of IDS's "evidence".  I'd stuck it out for an hour, but couldn't bear any more.  So I didn't hear Debbie Abrahams' ask him about the numbers not included in the unemployment figures because they were sanctioned.  According to an Oxford University study this figure could be as high as 500,000.  IDS's response was that this was "ludicrous".  Ms Abrahams said, "People have died after being sanctioned, Minister."  The response?  "No, I don't agree with that."  The last line of the Mirror's story is, "A DWP spokesman dismissed the study, saying 'It looks to be partially based on unreliable data.'"

This disgusting man and his disgusting department put out a press release today which claims: "More than 12,000 households have made the choice to move into work or stop claiming Housing Benefit because of the benefit cap".  He's been warned about this before; it's a complete falsification of the data.  But the London Evening Standard allows him space to amplify this claim, with the arrogance of the seriously deluded.

Ironically, the Public Accounts Committee reported today on the "scandalous" failure of the Work Programme to help ESA claimants.  The Independent covers this.  It also ends with a meaningless quote from "a DWP spokesman".  I do wish papers would stop giving space to this person.

Nothing is going to change.  And if there is a Conservative majority next May it will get much, much worse.

Proud to work?

The DWP Press Office has been infamous for a long time.  It's staffed by civil servants who are supposed to adhere to the Civil Service Code, which says that they should have "integrity, honesty, objectivity and impartiality".  But perhaps they're working under the direction of the DWP's Director of Communications, Richard Caseby, who appears to have no such scruples (he's a former managing editor of the Sun).  Back in January the Press Office put out a press release referring to "welfare hand-outs", a term the Daily Mail obligingly repeated.  Then last week came this:

There was no pretence that this was anything other than straight-forward propaganda.  Objective and impartial it was most certainly not.  But I bet the intern (unpaid?) who gets to do the graphics has fun.

Today they attempted a rather different Twitter campaign, one which the Press Office didn't invent but which has decidedly sinister overtones.  It's called "Proud to Work", and it seems to be the creation of the ERSA, the work programme providers' trade body - but clearly they are all working together with this.  The DWP re-tweeted the highly dubious statement that the "Work Programme will deliver £18bn to economy".  Immediately afterwards came re-tweets of stuff from Interserve, A4e and Working Links (not on this screen capture).

What I find most disturbing about this is the "proud to work" tag.  It's subtle.  It suggests that those who are not working are not proud, have no pride.  It suggests that unemployment is voluntary, the result of lack of self-respect.  Perhaps it suggests other things to you.

Is there anything that can be done about the DWP Press Office?  Not at this stage in the parliament, I think.  There doesn't seem to be any mechanism for opposition MPs to complain about it effectively.  What it proves, however, very clearly, is that this government, and Iain Duncan Smith in particular, work closely with the right-wing press to spread lies and damaging propaganda.  If they win in 2015, it will only get worse.

The sanctions report

Matthew Oakley's report is out.  You can read it here.  His brief was to look at how the sanctions system was working amongst certain groups; in particular at the communications with, and understanding by, claimants.  It was said from the beginning that the remit was far too narrow, a cosmetic exercise to justify the DWP but ignoring the real issues.  And it was said that Oakley was the wrong person to do it.  If you read the Foreword to the report you do get the impression that Oakley dutifully applauds the system.  But in fact he has gone beyond his brief, and there are some very important points in the document.
The Financial Times wrote a fair piece, highlighting the poor way in which the DWP communicates with claimants who have been sanctioned.  They also got a quote out of Esther McVey: "I have already started to make improvements ..."  Far be it from me to call anyone a liar, but I doubt that this is true.  The Guardian went with the fact that "Benefit sanctions hit most vulnerable people the hardest", sending out unintelligible letters, and not telling people about the availability of hardship payments unless they asked.  There's also a very significant observation from the report: "It also revealed serious flaws in how sanctions were imposed, with Work Programme providers required to send participants for sanctions when they knew they had done nothing wrong, leaving 'claimants … sent from pillar to post'".  This is the first time I've seen this fact in print.  The Guardian produced an update on this article this evening to take account of the fact that the government is to "overhaul the way it treats benefit recipients threatened by sanctions".  This must be based on the DWP's press release, which doesn't use the word overhaul and promises very little.  It does provide a quote from McVey which is probably made up by the DWP Press Office.  (You can play meaningless platitude bingo with it.)  The BBC website has a very careful piece which isn't worth reading.  And from Iain Duncan Smith, not a peep.  
This report is, of course, far from sufficient.  As the TUC has said, there must be a much wider review into the sanctions regime.  Perhaps it should look at this case reported today in a Hertfordshire local paper.  It's as bad as it gets.

Why Iain Duncan Smith should go

Someone yesterday started a story of a conversation supposedly overheard on a train to the effect that in the forthcoming reshuffle "Ian" was to be replaced by "Esther".  Despite there being no substance to this story at all it's made it as far as the BBC website.  One thing that this demonstrates is that Iain Duncan Smith's future is the biggest talking point in the reshuffle.  Will Cameron move him?  Will he have the guts to fire him if he refuses to be moved?  Who would replace him?

I have blogged before about IDS's failures, as have a great many people.  There's an excellent piece on the Labour Left website which lists "Iain Duncan Smith's 100 biggest failures".  It's a heroic effort, well worth study.  But let's distil it into the most obvious areas where his ambition has far exceeded his competence.

• The Work Programme.  This was the first of IDS's grand schemes to be put in place.  It was going to solve unemployment; and the most revolutionary aspect of it was "payment by results".  But it was never that.  The providers were guaranteed an "attachment fee" which would keep them going if they did nothing; and they were able to look forward to an "incentive" payment even if they failed badly.  And fail badly they did.  After 4 years it's clear that job outcomes (below even the minimum performance demanded and way below the providers' promises) depend on the economy and not on anything the companies do.  Helping to drag down the WP is:-
• ESA.  The companies were never going to be able to help those on ESA into work.  Indeed, most have been parked.  And overall, the companies have spent less than half the amount per client which they promised.  Remember, they get contracts because of the promises made in the bid documents.  And now they've got contracts to scoop up the people they've failed into:-
• Community Work Placements.  Okay, these appear not to have actually started yet.  But that's because a huge chunk of the voluntary sector want nothing to do with them, and a growing number of councils have also refused to take part.

There were a number of other, almost incidental, schemes along the way which have also been disasters, notably

• The bedroom tax.  (Let's face it, no one was ever going to call it "the removal of the spare room subsidy".)  It has cost councils a fortune, saved no one any money and inflicted huge distress and misery on thousands.
• Universal Jobmatch.  This was, it seems, entirely IDS's baby.  A grand one-stop-shop for employers and jobseekers alike which would have the added advantage of monitoring the activities of claimants.  The contract was given to a company with a poor record but which claims that much of what went wrong with UJM could have been prevented - but they were told not to put the necessary refinements into the software.  The system has been used to control and punish claimants without ever being the wondrous solution IDS envisaged.  But its costs are enormous.
• The sanctions regime.  A ludicrously impractical "claimant commitment" has been coupled with a vicious imposition of punishments which breach people's human rights.  Yet time and again IDS and his ministers have simply lied about sanctions; McVey repeated again this week in Parliament that they are "a last resort".  The human cost is appalling.  

The biggest failure of all, however, is:-

• Universal Credit.  This was to be the lasting legacy of Iain Duncan Smith, transforming "welfare".  At the outset opposition parties said yes, great idea, but it's never been done because it's too difficult.  Not for IDS, though.  Millions have been spent on IT that didn't work, more millions on trying a different IT system, and on patching up the problems thrown up by the very limited trials of UC.  We needn't rehearse all the problems.  But through them all IDS has insisted that it will all be fine.

We're told that it's Osborne who is keen to get IDS out because the Chancellor wants to slash the welfare budget and IDS resists that.  We're also told (in the Mail today) that Smith will again refuse to go.  This man's failures have cost us dear.  Surely he must go.

The boom in outsourcing

£88 billion has been spent on outsourcing in the UK since 2010.  That's nearly double what was spent in the last four years of the previous government, and the public sector is outsourcing at twice the rate of the private sector.  The big winners have been Capita and the usual suspects, but little of this boom seems to have touched A4e.
The project has enable the government to claim spurious private-sector job creation, as workers are switched from one to the other, with fewer jobs remaining at the end of it.  It also enables Cameron to claim that he is fulfilling his pledge to "release the grip of state control", though this begs the question of exactly who is in control.  Time and again we see how poor the procurement process is; how promises made on tender documents are pure fiction, but there is no come-back for the taxpayer.  There's an excellent analysis of the Work Programme figures in the New Statesman.  The providers are spending nothing like the amount per client that they promised, yet still they get their incentive bonus.
There is evidence that some services outsourced by local authorities are being brought back in house, and we've seen that happen in the past.  But there comes a point where there's no "in house" left; no council or government structure to administer the service.  It was a creeping privatisation under Labour.  It's galloping under this government, with little notice being taken by commentators of where we're going.
For a little light relief, we're told that a cabinet reshuffle is on the cards for next Monday.  It's suggested in the Telegraph that there are rumours of a straight job swap between Iain Duncan Smith and the Defence Secretary Philip Hammond.  The mind boggles.
 

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.

Nothing works

Remember the Work Programme?  Of course you do.  But, like so much of what this government has done, the WP has been forgotten by most of the media; and its successor, "Help to Work", is just being ignored.

But the businesses contracted to deliver the WP have to plough on until 2016.  And A4e has resumed its practice of inviting MPs into their local offices to admire what they're doing.  Rob Wilson, Tory MP for Reading East, said, “I was very pleased to hear that A4e has seen a reduction in client numbers because of the success of the Work Programme getting people back into work and off benefits.  Clients are supported by A4e staff after starting work to help ensure they are able to manage in their job.  This extra support is essential to keep people in the new job.”  John Bercow, Tory MP for Buckingham (and Speaker of the Commons) was equally impressed by A4e's work in Milton Keynes.  Another cheer-leader is Dan Finn, Professor of Social Inclusion at Portsmouth University.  He's written a piece on Serco's own website asking, "Is it working?" and concluding that it is, with a few caveats.  And yet ....  Huge amounts of money have been spent on this, with very low targets which are not being met.  It was meant to solve unemployment and certainly hasn't.

So IDS came up with "Help to Work".  It was supposed, after a delay, to start yesterday, but there's another delay.  Could that be because of the difficulties in finding placements for all those sentenced to workfare?  There's a good piece on the Ekklesia website, and another on ThirdSector's site.  A growing number of voluntary organisations and local councils have signed up to a boycott of the scheme.  If they can't find placements with charities and councils the firms with the contracts will have to offer this free labour to private companies.  But, ostrich-like, "A spokesman for the Department for Work and Pensions said: 'Referrals to the placements have begun and the placements will begin shortly. There has been no delay.  Charities are under no obligation to be in the scheme, but those who are recognise the benefits of it.'"

Despite the fact that everything he has touched has turned to dross, Iain Duncan Smith believes it's all wonderful.  If you can stomach it, read his speech on welfare reform in Berlin.  And if we needed confirmation that IDS has a headlock on the BBC, it comes in the Express.  Talking about the Tories' promise of an EU referendum, "Iain Duncan Smith lashed out at the BBC for failing to give enough prominence to Mr Cameron’s promise of an in-out vote in 2017.  The Work and Pensions Secretary said 'most people' do not even know about the pledge.  A BBC spokeswoman said: 'We are satisfied that we have covered the EU referendum promise.'"

Burying bad news

You probably missed this.  Only readers of the Guardian and the Independent got to know about a damning indictment of Iain Duncan Smith's massive failure, Universal Credit.  The news was sneaked out at the weekend when attention was elsewhere.  (Not that the BBC would have mentioned it anyway.)  The government has a body called the Major Projects Authority which monitors progress on big, expensive schemes.  It then codes them as green, amber or red, the last being for something that is “unachievable within reasonable timescales and to a reasonable budget without urgent remedial action”.  And that was the code it was going to give to Universal Credit, a step down on last year.  But, according to the Independent, IDS managed to stop it.  Instead UC has been excluded from the list altogether on the grounds that it has been "reset" since February.  Clever, eh?  Our friend the DWP spokesman, wearily having to defend the move, just trotted out the stuff he knows no one believes: "The reality is that universal credit is already making work pay as we roll it out in a careful and controlled way. It's already operating in 10 areas and will start expanding to the rest of the north-west in June.  Jobseekers in other areas are already benefiting from some of its positive impacts through help from a work coach, more digital facilities in jobcentres, and a written agreement setting out what they will do to find work."  Notice how that last bit has nothing to do with UC.
Duncan Smith's habit of refusing to tell his employers (us) anything which reflects badly on him, or which we might not like, is now ingrained.  He told the Work & Pensions select committee that he didn't have to tell them everything because he ran the department, not them.  He has refused a court order to publish the list of organisations involved in workfare.  Meanwhile, the latest Work Programme Official Statistics document was very quietly put out, with no one taking much notice.  (It's here if you're interested.)  The success rate has gone down a bit.  Since it started, around 19% of its alumni have got a job, but for at least a third of those it was only temporary work.  It's the number of ESA people, they claim, which is bringing the outcome rate down.  (A4e scores just under the average for outcomes at 12 months.)  It's another huge slab of wasted money; and more follows it into the pockets of the corporates as "Help to Work" gets under way.
But with the elections over IDS can face the public with a message his favourite papers have made a big deal out of; that they're planning a "crackdown" to limit immigrants' benefits even further.  Except that not many immigrants claim benefits anyway.

Ignorance is bliss

Have you ever wondered why so few people know what's going on in "welfare" these days?  Ever shouted at the radio or TV when someone pontificated on, say, the Work Programme without appearing to have any knowledge of the subject?  Ever despaired at the sheer ignorance of most people about unemployment?  Then you might have been cheering this morning when the Today programme on Radio 4 decided to look at whether all that self-employment in the latest job figures is genuine.  Two experts were asked; one was a woman whose name I forget, the other Professor Roy Sainsbury.  I'd never heard of him, which is a pity because he's head of the Social Policy Research Unit at York University - and he knows what he's talking about.  Speaking lucidly and quickly (important if you want to get your point across without being interrupted) he pointed out that Work Programme providers were pushing people into spurious self-employment because it enabled them, the companies, to claim for a job outcome under PbR.  Cue astonishment from John Humphrys, who was doing the interview.  "You mean they get paid for it?" he gasped.  And well he might.  When did you last hear a clear and honest examination of anything this government is doing in the name of "welfare reform" on the BBC?  Oh, I know they've looked at food banks, the bedroom tax etc., but always with a timid eye on "balance" for fear of IDS launching another complaint.  At least Humphrys learned something new this morning.

However, the government's apparent ignorance about sanctions cannot be excused.  They have repeatedly been confronted with real cases of people being punished for trivial or non-existent offences, by Labour MPs and others, but have insisted that it's not true.  That has become more difficult since the Mirror published revelations on Tuesday.  Iain Duncan Smith, along with Esther McVey and Neil Couling, head of Jobcentre Plus, attended a meeting last week with a whistle-blower who has worked for the DWP for more than 20 years.  The man told them, "“The pressure to sanction customers was constant.  It led to people being stitched-up on a daily basis.”  He went on "“We were constantly told ‘agitate the customer’ and that ‘any engagement with the customer is an opportunity to ­sanction’.”  The targets, he said, are sometimes referred to as "expectations".  And this led to managers stitching up claimants by altering their appointments without telling them so that they missed the appointment and were sanctioned.  They were told to "inconvenience" the clients and to regard them as scroungers.  It's a horrific account.  And now the Labour MP Debbie Abrahams is agitating for an independent enquiry into sanctions.  It won't happen, of course.  

There's one area of outsourcing on which most of us prefer to remain ignorant.  Read Polly Toynbee's Guardian piece headed "Now troubled children are an investment opportunity".

 

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.

CWP - is it a secret?

Community Work Placements are supposed to start next week.  That's the "help" for the long-term unemployed who have been failed by the Work Programme; months of unpaid work "in the community".  But there has been no announcement about which companies have won the contracts to organise this.  It seems certain that the contracts have been awarded.  G4S is advertising dozens of posts to do with CWP on the Indus Delta site.  So why are the public not being told?
Could it be that the DWP wants to avoid the inevitable media outburst which would follow an announcement that those lucrative contracts had been given to G4S?  After all, this is the company which defrauded the government (which means you and me) of millions over the tagging contracts.  It is obvious that the tendering process for CWP was going on while G4S was still supposedly under investigation and suspended from bidding.  Yet it was "cleared" just in time to be given another opportunity for oodles of dosh.  Perhaps Serco, with a similar record, is also on the gravy train.
Community Work Placements could come to grief not just on the incompetence of its providers, but also on the lack of actual placements.  We know that lots of voluntary organisations want nothing to do with it.  CWP is a popular concept with the right, but even the commercial sector could find it attracting too much bad publicity for comfort.
We will just have to wait and see.  Those of our readers who are referred to the programme will no doubt keep us informed.

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?

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.

Secrets and lies

G4S is in the news again.  The outsourcing company has agreed to pay back almost £109m to the government as a settlement for its overcharging hugely on its contract to tag offenders.  It had offered £24m.  Serco, which shared the contract, has given back £70.5m.  Both companies, we're told, still face investigation by the Serious Fraud Office, and neither can bid for the flogged-off probation contracts currently out for tender.  G4S is in deep financial trouble.  But, you may say, is that it?  Is no one going to be charged with criminal offences?  After all, benefits cheats are in court very quickly.  I doubt it.  
There are several reasons why the government would not want a court case.  The relationship between people in government and those running these outsourcing companies is not the standard one of purchaser and provider; there is a much greater degree of mutual self-interest.  You don't want to put your mates in court.  These two companies in particular have been crucial to the government's exercise in creating private wealth out of public services.  And suppose there were charges.  They could plead guilty, and that would save embarrassment.  We've seen what happened, on a very, very much smaller scale with A4e.  The employees who pleaded guilty have not yet been sentenced.  That may not happen until the second batch have been tried in October.  If they plead guilty as well, we will never know the details of what they did, and what pressures or incentives they were under.  The G4S and Serco cases could follow that route, sparing the public the details of their contracts.  It wouldn't do for us to know how those contracts, and the monitoring of them, allowed the firms to overcharge on this massive scale.  If they pleaded not guilty, all that would have to come out.  The government wants this out of the way as soon as possible, and the companies back in the ring bidding for more juicy contracts.  Grayling had to cancel altogether the privatisation of a batch of prisons because the only bidders were G4S and Serco.
More secrets.  We are used to this government suppressing information if it goes against its narrative of great success in "welfare reform".  So it's no surprise to learn from Channel 4 News that it sat on a report which showed, according to independent experts appointed by the DWP, that the Work Programme isn't working.  That's hardly news, you might say.  But this report came out last September and a decision was taken to suppress it "at a ministerial level", and we know what that means.  All the things which critics said would happen, particularly "creaming and parking", are still going on.  Sanctions are not helping anything, says the report.  And the providers themselves, or 58% of them, think the WP is not helping or worse.  The DWP apparently said, "The reality is that the Work Programme is working."  That's the point at which the secrets turn into lies.
For a straightforward untruth we turn to the narrative on food banks.  The DWP has always insisted that it doesn't refer people to food banks.  There's a good reason for that.  It needs to deny that food banks have become part of the welfare state, or, indeed, that they are needed at all.  But now we have the evidence, thanks to the Guardian, that there is official guidance to jobcentres on how to give out vouchers, and one of the documents is entitled "Foodbank Referral Service".  That has now been modified; "referral" has become "signposting".  And they mustn't refer to the vouchers as vouchers.  (Orwellian newspeak is thriving at the DWP.)  There's a significant paragraph in the article: "The documents show each jobcentre is told to write down how many people have been sent to food banks on a 'slip record sheet', even though the DWP has said: 'Food banks are not part of government policy and, as such, the Department for Work and Pensions does not hold or collect information on their usage.'"
What was it David Cameron once said about being the "most transparent government ever"?

A troubled week

Mike Penning, the Disabilities Minister, seems to be in the wrong job.  In a debate in Parliament on the mess around work capability assessments, Penning apologised.  Doesn't he know that he's not supposed to do that?  True, he was confronted with the story of Sheila Holt, the woman who was pursued by Seetec and Atos even though she was in a coma.  The sorry tale was originally told by the Mirror on 12 February.  Penning, perhaps, had no option but to apologise; but he's rather letting the side down by doing so.  His boss, Iain Duncan Smith, and his colleague Esther McVey would, I'm sure, simply have brushed the story aside.  He has probably been told that he must not see this as a precedent.  Ministers at the DWP have a motto; never apologise, never explain.
So there hasn't been a peep out of them about another horror story, this time from David Cameron's constituency.  It was covered in the Oxford Mail and headlined: "Man starved after benefits were cut".  Mark Wood, aged 44, had multiple problems which made him very vulnerable; but Atos declared him fit for work.  All his benefits were stopped except his disability allowance.  He couldn't pay his bills and apparently starved to death.  As well as being appalled, we should note a contradiction which emerges from the story.  Wood's GP "said he had not been contacted by either Atos or DWP about Mr Wood’s medical history, and revealed that if they had asked for his professional opinion he would have said Mr Wood was unfit for work."  But the obligatory arrogant comment from the DWP spokesperson says: “A decision on whether someone is well enough to work is taken following a thorough assessment and after consideration of all the supporting medical evidence from the claimant’s GP or medical specialist.”  Someone is making it up, and I don't think it's the GP.  (For the first time this mysterious spokesperson is named; it's Ann Rimell, who is Senior Press Officer at the DWP.)
As if it wasn't enough that one contract was in a shambles, a report came out from the National Audit Office showing that a newer one, the PIP assessments done by Atos and Capita, was heading the same way.  A piece in the Guardian reports that a backlog of 92,000 cases has built up, three times the expected number, and only 16% of cases have received a decision.  Neither company is anywhere near meeting its contractual requirements.  But the DWP spokesman said, in effect, "No problem".
As well as leaving it to others to deal with the Atos affair, IDS has also been ignoring the growing unrest about sanctions.  West Dunbartonshire CAB produced a scathing report which makes all the points many have been making for quite a while.  But the DWP's response was to confirm to Inside Housing that under Universal Credit housing benefit could be subject to sanctions.  This is because people who get working tax credits or HB but not JSA or ESA can only be punished by hitting that benefit.  Then on Friday the Herald newspaper in Scotland published a report of a piece of analysis done by an academic which brings up to date some of the stats on sanctions.  We knew that from October 2012 to September 2013 the success rate for appeals against sanctions was 58%.  But Dr Webster says that this has risen dramatically in the most recent quarter, to 87%.  However, only 2.44% of those who were penalised actually appealed in the last 3 months.  IDS would claim, of course, that this means that the vast majority of sanctions are justified; but Dr Webster maintains that the low appeal rate is down to the difficulty so many claimants have with the appeal process.  And he makes an interesting point: "To date, Work Programme contractors have been responsible for twice as many sanctions on the people referred to them as they have produced 'job outcomes' ."
Duncan Smith had a project which he's been forced to drop by his own colleagues.  He wanted to redefine poverty.  At the moment poverty is defined as having an income less than 60% of the country's average income.  So it's relative, but it's based firmly on the idea that poverty is about not having enough money.  IDS wanted to include other factors, like "worklessness" and addiction.  This was a terrible idea, for several reasons, admirably expressed by Bernadette Meaden on the Ekklesia website and by Andreas Whittam Smith of the Independent.  
Duncan Smith's recent appearance before the Work & Pensions Select Committee astonished many people, because his attitude was so disgraceful.  One of the Labour members of that committee, Teresa Pearce, has described her feelings about it on the International Business Times website.  She calls him "downright rude and quite abusive".
And finally - I've lost the link to this, but it's memorable.  In the debate on the bedroom tax Labour brought up the evidence to show that IDS's estimate of the numbers wrongly penalised was a wild stab in the dark and completely inaccurate.  Now Smith doesn't like to be contradicted.  But I detect something else in what happened next; panic at the very idea of maths.  Having accused Chris Bryant of mathematical incompetence he said that one in twenty of something-or-other .... "One in twenty - that's a fifth ..."  Er, no.  (If your maths is as bad as his, one in twenty is 5%.  A fifth is 20%.)

Round-up, 25 Jan 2014

I've been avoiding it.  All that publicity for IDS's speech made me want to head for the hills.  He compared himself to Wilberforce and Shaftesbury.  Well, not quite, but close enough that the journalists made that the story.  And we can be sure that he actually believes it.

I've pinched this brilliant bit of photoshopping from Twitter - Iain Duncan Smith as William Wilberforce.  Let's be clear what Wilberforce really did.  He was an MP who became the parliamentary voice for the movement to abolish the slave trade, and he succeeded in getting that through into law in 1807.  The abolition of slavery itself didn't come until 1833.  As for Shaftesbury (Anthony Ashley Cooper 7th Earl of Shaftesbury); he was the driving force behind reforms to the laws which allowed child labour and appalling working conditions, and he was involved with many other reforms benefiting the working class.  Both men were evangelical Christians, believing that you couldn't save men's souls until they had decent lives.  IDS really does see himself in that tradition.  (The full text of his speech is here.)  Whenever people bring up evidence that, in so many cases, he is causing huge distress, he and his party literally don't want to know.  They never answer specifics, just repeat the generalities, because specific cases would destroy the picture they have of themselves.
Enough of IDS.  One piece of encouraging news did emerge this week.  Labour has said that it will axe the Work Programme if it gets elected.  (See the Northern Echo story.)  But only when the contracts come to an end.  It would cost far too much to terminate the contracts.  Labour plans to channel the money through local councils and Local Enterprise Partnerships - something I've advocated for a long time.  This will scare the likes of A4e, and will no doubt generate a great deal of lobbying.
And finally, the fall-out from Benefits Street goes on.  A number of people who have featured in the "show" have been arrested on charges of possessing drugs.  I can't, and shouldn't, comment on particular cases.  Anyone who is dealing drugs deserves all they get.  But I have many a time argued with people who bring up the supposedly luxurious lifestyles of those on benefits that anyone who can afford huge TVs, smartphones and foreign holidays must be either up to their eyes in debt or involved in criminality.  Sadly, this doesn't help to vindicate the vast majority of claimants.  I don't think we've heard the end of this noxious production.

A4e's accounts

The accounts for the year ending 31 March 2013 are now available.  You can get them for only £1 from the Companies House website.
Things were bad for A4e in 2011/12 but they got a lot worse.  They had an operating loss of £10.3m compared to a £1.7m loss the previous year, and an EBITDA loss of £5.8m compared to £4m profit in the previous year.  (EBITDA means earnings before interest, taxes, depreciation and amortization - yes, I had to look it up.)  They state that they actually moved into profitability in the final quarter of the year.  They had to borrow a great deal of money.  Liabilities stood at £53.4m, compared to £35.7m in the previous year.   They have a large credit facility with Thornbridge Ltd, which is owned 50/50 by Emma Harrison and her husband.  No dividend was paid.
They confirm that they closed their businesses in France and Germany, and now the focus is on the Work Programme, OLASS 4 (prison education contracts) and on expanding the business in Australia.  They also mention Advice and Enterprise (services to start-ups).  There are confident noises about the WP becoming profitable and getting TR contracts (the outsourced probation services).
It must be stressed that this is the information as at March last year.  We don't know what's happened since then, or why their credit rating was cut in the last three months or so.