Reporting the data loss

There has been remarkably little interest in the theft of a laptop containing personal client data from an A4e employee. Most of the coverage has simply repeated A4e's own press release. And some of the descriptions of A4e, such as "the jobs club firm" reveal a lack of knowledge of the company and its activities (although that particular description on the Register site also mentioned the fact that A4e administers the Home Office test for would-be citizens) . Even the BBC's local news filmed outside A4e's offices in Hull and referred to the company's "legal department" without mentioning the CLAC. One client of the CLAC said that the apology from A4e wasn't good enough and asked why the data was in someone's home. The news item drew comparisons with other data theft scandals, and Jo Blundell was put up to say that A4e are taking all the action they can.

The Guardian went with "Review to look at fairness of incapacity benefit tests", saying: "The contracts will in many cases not give private firms any money until they have found work, with the fee rising probably after someone has stayed in work for six months, 12 months or even two years. Emma Harrison, director for A4E , the largest private contractor, said she was delighted that the government was merging the different welfare to work schemes into one work programme, saying it would cut time and the cost of bidding for many small contracts. She said contractors were in discussion with banks to see if they would provide loans to cover the new regime of payment by results."

Oops!

Quite an embarrassment for A4e - "Laptop with personal data of 24,000 people is stolen". It's the data from the two A4e-run CLACs in Hull and Leicester, and was on the laptop of an A4e employee stolen in London in a domestic burglary (the laptop, not the employee!) The fact that all that information could be on someone's laptop kept at home is really startling. It's Bob Martin, group chief executive of A4e, who's had to make the apology. "We sincerely apologise to all those affected by this incident. It should not have happened. While we are advised that the risk to clients is low we are taking every precaution to ensure their interests are protected."

Meanwhile, the "framework agreement" has been published by the DWP. It stresses that "organisations are expected to have good financial standing and arrangements that will enable them to manage the risks associated with the delivery of business under this framework agreement. As a minimum, organisations must have the ability to deliver across an entire Lot and manage the financial demands of delivering at least one package of business without undue risk to the specific requesting contracting body." So only the big companies need bother applying.

There's a neat story about the Work Programme on the thisismoney site, which suggests that providers will get a "nominal" sum for those clients they don't get into work. How nominal, one wonders.

The transition

We reported last week Freud's reassurance to the FND providers "that all providers currently performing well will take a full place in the new programme and as long as they worked hard, they had no need to worry." That came after Emma Harrison's apparent assumption that A4e would have contracts. On Wednesday a written answer in the House of Lords shed a little more light on the situation. Lord Kirkwood of Kirkhope (who was, as Archie Kirkwood, a Lib Dem MP), asked "what is their [the government's] estimate of the legal costs of cancelling last year's phase 1 contracts with employment providers to deliver phase 1 of the Flexible New Deal." (See theyworkforyou.com). The answer from Lord Freud was, "We have embarked on some very productive meetings with FND1 providers on how between us we best manage the transition from Flexible New Deal to the new work programme. It is too early to provide an estimate of the likely costs of making this transition and indeed some of this will depend on whether existing FND1 providers are successful in bidding for the work programme." What that means is that the ideal scenario from the DWP's point of view is that the current providers bid for the new contracts and are acceptable, so that there is a cost-free transition. If any of them decide not to bid they will be entitled to compensation for the premature ending of the FND contracts. And that gives the "primes" like A4e a lever to extract concessions in the WP contracts, and little hope to any new providers who want to come in.

But according to Ben Brogan in the Telegraph the DWP is giving cause for concern. "Iain Duncan Smith is admired for his commitment to reform and the passion he brings to the issue. But the jury is out on whether he has the skills necessary to translate ideas into action, let alone deliver them at the helm of a complex bureaucracy. The ideas are great, but the detail is a killer. Some speculate that Chris Grayling was put in there to provide the executive oversight, after he made a success of the DWP brief in Opposition. But civil servants report that Lord Freud is roaming beyond his area and wonder whether he might turn out to be the Frank Field of the outfit if his frustrations with IDS begin to be felt. To cap it all Mr Field is being given a role to involve himself in welfare issues and the department fears that like some unmanned drone, he will keep circling above the battlefield, launching occasional deadly strikes." So nothing is certain. and it's still a case of "wait and see".

An award for Emma Harrison

A4e's Emma Harrison has won an award. It was part of something called the First Women Awards, held in association with Lloyds Banking Group and supported by the CBI, with patron Sarah Brown. See the Real Business website and various other versions. Harrison got the Public Service award: "Emma founded training company A4e in 1991 and has built it into a £200m-turnover business operating in 11 countries and employing over 3,300 people. Her Sheffield-based business works with people and communities to tackle unemployment and deliver skills, advice, guidance and enterprise. Emma is a mentor and supporter of many small businesses and is a non-executive on the board of the Institute of Directors." She shared the award with Caroline Shaw, chief executive of The Christie NHS Foundation Trust. One could regard this sort of thing as of interest only to the people involved, but we learn that "The ceremony was attended by more than 450 guests including Home Secretary The Rt Hon Theresa May MP, Minister of State for Security Baroness Neville-Jones, Helen Alexander of the CBI, Fru Hazlitt, soon-to-be ITV’s managing director of commercial and online, and royal biographer Penny Junor," so it's part of the networking with influential people (I don't include Penny Junor in that.)

Meanwhile, Australia has a new Prime Minister, Julia Gillard, and that has revived the controversy surrounding A4e and Ms Gillard's department when she was Employment Minister. There's a summary here. David Blunkett figures in that story; but he no longer lists working for A4e on the Register of Members' Interests.

The Budget

Yesterday's budget contained few real surprises, but one of the measures which will affect A4e is the abolition of the Regional Development Agencies. The North West Development Agency in particular have funded a number of projects which gave work to the company. Whatever replaces the RDAs will have less money to spend, and cuts in public spending across the board will mean slimmer pickings.

Unemployment is set to rise, providing clients for the Work Programme contractors, but fewer possibilities of getting them into jobs and thereby earning outcome payments. And yet the government has made the plight of the unemployed even harder by increasing benefits in line with consumer prices inflation, rather than retail prices inflation, from next year, which means a smaller rise; and by reducing housing benefit by 10% for people who have been on a jobseeker's allowance for 12 months or more. Will this be an incentive to find work?

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.

Small charities and big business

It is, according to A4e's Emma Harrison, "Small Charities Week", "a major celebration of the small charity sector and its huge impact on communities across the UK". You can listen to her talk about it on the MyA4e site or read about it on the ThirdSector website. The writer of that article, Anne-Marie Corvin, sees some irony in this, pointing out that "A4e, the private company Harrison founded in 1991, frequently competes with charities for government contracts. Two years ago Hull Citizen's Advice Bureau was left facing an uncertain future after A4e beat it to a contract to provide legal advice, and the Migrants Resource Centre accused A4e of 'gross exploitation of the voluntary sector' when the firm asked it to work as a partner without payment in 2008."

Meanwhile, there's the business of new contracts. More scrutiny of the Work Programme proposals has raised another disconcerting fact. According to Chris Ball, Chief Executive of TAEN: "The emphasis will be on sustainability of jobs; proportions of fees will be paid after one, two and three years in the job – an idea meant to encourage providers to work much more closely with the employers in which clients have been placed. There will be downsides for providers compelled to wait for their money however." It might also be seen as a "downside" for the client who faces up to three years of ties to the provider.

On Friday Michael Gove will fire the starting gun for the "free schools" race. We know that several private companies, including Serco, have arranged with parents' groups to run these new schools, ensuring that this is, in effect, the beginning of the privatisation of our education system. It is unlikely that we will get a list of which companies are running which schools.