Wednesday, 21 January 2015

More on that A4e fraud case

I've been waiting to see whether Private Eye would cover the A4e fraud case.  It has.  But it's a short piece which adds little or nothing to our understanding of the case.  It does say: "The fraud was blatant; the prosecution described, for example, 'a completely false file showing the individual's contact and training sessions with A4e'.  After a new employee blew the whistle, audits uncovered the scale of the fraud, which had also involved people being offered 'shopping vouchers' to pretend they had got jobs through A4e."

We can expand on that.  One employee (we'll call her AB) was training another, transferred from another office, on the particular Inspire contract.  This employee told AB that fraud was widespread among her former colleagues.  AB reported this to management and this put in train the internal audit by A4e.  Which one of these two employees should be described as the whistle-blower is not really important.  The investigation subsequently uncovered the scale of the fraud.  The irony is that AB ended up as one of the convicted - for falsifying her own file.  She had been taken on by A4e after applying for a job with them through Inspire, and a file was then created to show, falsely, that she had been on a programme with A4e so that a job outcome payment could be claimed.  AB (not knowing any better, she later claimed) signed the paperwork which had been compiled by another of the convicted.  Having read some of the evidence presented in this case, I have to say that it would confuse anyone who isn't au fait with the way these paper-based contracts worked.

That there was a climate of fraudulent activity in this contract is clear.  That the incentive to do this was the financial rewards offered by the company is also clear.  And one does wonder why A4e didn't acknowledge that the investigation was triggered by a whistle blower.  If the A4e media relations person who gave me her phone number the other day and invited me to contact her (not something I would ever do) would like to comment openly here she will be welcome.  A4e has dropped the system of individual bonuses, but confirms that they offer team bonuses.  Quite how that would prevent this type of fraud isn't clear.

PS: There is a great deal to say about benefit sanctions at the moment, but I'll deal with that in a separate post.

Wednesday, 14 January 2015

Guilty of fraud

We've waited a long time for the outcome of this trial, but it finished today with a guilty verdict on ten A4e employees in Slough (three more were acquitted).  There's a brief write-up on the BBC news website and a better one on the Slough Express site.  
They were working on a lone parent mentoring programme called Aspire to Inspire (I kid you not) which paid A4e for job outcomes in much the same way as the Work Programme.  The convictions are for fraud and forgery, with two of them also guilty of conspiracy.  The local paper says that "The fake claims were discovered though a whistleblower report, which led to an investigation by the department of Work and Pensions and Thames Valley Police," whereas Andrew Dutton, A4e's boss, has always claimed that A4e found the fraud themselves.  Whichever, as we suspected, the motive was to claim the bonuses the company offered for successful job outcomes.  "Financial rewards had been introduced," said the police spokesman, and pointed out that, "The money they fraudulently claimed came from the taxpayer and just over £1.3m was paid to A4e between 2008 and 2010 for their implementation of this contract."
A4e announced some time back that they no longer offer individual bonuses.  A couple of years ago they seriously annoyed many manager-level staff by withdrawing all bonuses, which meant something like a 20% pay cut.  It also has to be remembered that this was a paper-based claims system, which was wide open to fraud without rigorous auditing.  All you had to do was fill in the claims form with a fictitious job and put a false signature on it.  Clearly, this A4e office didn't do it occasionally; they thought they could get away with it on a grand scale.
Sentencing has been deferred until 30 March.
This isn't on the scale of the fraud by G4S and Serco.  But it's bad enough.

Tuesday, 6 January 2015

Reflections on those accounts

It's very telling that no one in the media has shown the slightest interest in A4e's latest accounts.  How different from the furore nearly three years ago which brought down Emma Harrison and very nearly destroyed the company.
How have they done it?  They've scraped their way back to profit, just, from a dire situation, and they've done it by not trying to compete with the big boys.  The chairman talked about "discipline".  They've put in realistic bids for contracts but withdrawn when they could see that they were going to be undercut by companies which could afford to lose money initially and then get the contract changed to allow them a profit.  It's not a game A4e wants to play any more.  And they've pulled out of foreign parts (except for Australia), presumably because it was costing too much to keep up that international presence.  From a company with limitless ambition they've become a medium-sized outfit looking to make a living.
I suppose we should be pleased.  But there's no comfort in the fact that a few huge companies now run the bulk of our public services and behave as if there are no risks or consequences of failure.

Meanwhile, there was an interesting story on the Disability News Service website last month.  A former A4e employee, Chris Loder, took the company to a tribunal claiming constructive dismissal.  He alleged that he had been forced to work with vulnerable ESA clients, some with mental health problems, when he had no experience in this area and was given no training.  A former colleague, supporting him, described the policy as "incredibly dangerous".  The article prints a long statement from A4e refuting the claims.  The tribunal's verdict is due this month.

And speaking of verdicts, there still isn't one in the Slough fraud case, being heard in Reading.  Before the holidays it was reported on the courts' website that the jury was out, but today there's no further news.

Do you remember A4e's Hayley Taylor and her 5 minutes of fame as the "Fairy Jobmother"?  It seemed the company might have another star in the offing.  ITV have a programme starting this Thursday called Bring Back Borstal, and A4e were publicising the fact that one of their managers, a woman connected with their prison education contracts, was going to be on it.  That link has now disappeared, so I've no idea what's happening.

Tuesday, 30 December 2014

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.

Sunday, 14 December 2014

"Hang on"

Perhaps you watched the interview with Iain Duncan Smith today on The Sunday Politics.  It was much as we have come to expect, although Andrew Neil did try, for once.  But from the moment IDS opened his mouth he lied.  Neil tried to nail him on Universal Credit.  There's no need to go over the true history of that epic failure.  IDS has rewritten history, as he always does.  He is the hero who spotted what was going wrong and got it all sorted out, and now it's all going swimmingly.  Neil confronted him with graphics to show that a normal, low-paid family in his own constituency would be worse off.  But it's pointless confronting Smith with figures; they don't register with him.  Today he was shown a graph and maintained completely different figures.  Whenever Neil tried to move on to a different point, Smith said, "Hang on," and reiterated the falsehood he was insisting on.  There was one whopping, blatant lie which stood out.  "The Treasury hasn't signed off Universal Credit," said Neil.  "Yes it has," said IDS, and nothing could move him.  Neil hates this, so after the interview he produced confirmation in the form of a direct quote from a Treasury official at the Public Accounts Committee recently.
The Feeding Britain report was brought up.  The bulk of people needing food banks were suffering benefit delays and sanctions.  No, "benefits were now being paid more quickly - from 88-89% being on time under Labour, to 96-97% now."  I have no idea whether that's true, but since IDS said it I assume it isn't; certainly the delays are much, much longer now.  And anyway, he said, food bank use "is tiny in proportion here compared to a place like Germany which has more generous benefits and in which you have a higher level of pay.  So just saying it is to do with benefits is quite wrong. What I do say is there are lots of other reasons lots of people go to food banks."  For Andrew Neil it must have felt like banging one's head against a brick wall.
There was nothing to provoke a headline until the end of the interview.  He was shown clips of various ministers saying that the "welfare" budget would have to be cut still further.  Where would those cuts fall?  Would you limit child benefit to two children, asked Neil, echoing something the hard right has been pushing lately.  IDS said he would certainly consider it.
We can rant and rage and heap abuse on this man.  But try to take a step back and consider what's going on.  Does Smith actually believe what he says?  Or does he know that he's lying and not care?  I suspect it's a bit more complicated.  We have a toxic combination of fixed ideology and grandiose self-delusion.  And it persists because his party loves it.  Who else could they find to do their dirty work for them with such enthusiasm?  Possibly Chris Grayling.  But all the other Tories who would do the job with gusto are even more stupid than Smith (think McVey, or Philip Davies or Alec Shelbrooke).  Those with ability tend to maintain a tiny morsel of compassion.  So IDS sails on.

Wednesday, 10 December 2014

Feeding Britain

The report on hunger came and went.  For the media it was a one-day wonder and then they moved on.  The coverage elicited the expected denial and incomprehension, and nothing will be done.

The report, unfortunately, conflated two unrelated issues; the huge wastage of food, and the fact that large numbers of people can't afford food at all.  This allowed the media to focus on the first and to give the impression that the surplus food now thrown out could feed the poor.  There are, in fact, several organisations such as Fareshare which collect surplus food from the producers and retailers and pass it on for distribution to those charities which feed people; but they can't pass it on to food banks because it's fresh food which can't be stored by those food banks.  And anyway, that would not solve the problem of why people are going hungry.

It was important that the report brought out the reasons for food poverty.  It drew on the figures collected by the Trussell Trust to show that the majority of users are suffering from benefit delays and sanctions.  How did Iain Duncan Smith respond?  According to a Guardian report, he "promised to respond positively, telling MPs "“We want to do everything we can to make sure that people do not stumble into a process of sanctions”.  But on the same day the paper reported, "It is also unlikely that the Department for Work and Pensions (DWP) will shift its stance on the administration of benefit sanctions, even though the report says they are the single biggest reason for the poor resorting to food banks. DWP sources said it was very clear at the start of a benefit claim what was required of a claimant and there would be consequences for failing to meet that commitment."  The FT commented on a suggestion by Nick Clegg, among others, that there should be a sort of "yellow card" system for sanctions, a warning before an actual sanction was imposed.  Many of us would endorse that, and could come up with detailed plans for how it could work.  But, "aides to Iain Duncan Smith, work and pensions secretary, argued that the yellow card warning system was 'not necessary' because jobseeker’s allowance claimants were now required to sign a 'claimant commitment'. This left them in no doubt as to the obligations they were required to fulfil in return for their social security."  So IDS's pious words in the House of Commons were nothing more than pious words.  He did say that he would ensure that people are informed about hardship payments; but neglected to tell his colleagues that such payments are a pittance and don't kick in immediately anyway.
At least we know where Business Minister Matthew Hancock stands.  He said that that food banks had only increased “because more people know about them” and that poverty in Britain “coming down”.

I could point you to numerous articles about the report and the fall-out from it.  But you can find them for yourself.  The fact is that nothing will change.  At PMQs today Clegg, standing in for Cameron, reeled off lie after lie, apparently believing what he was saying.  

Saturday, 6 December 2014

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.