Thursday, 31 January 2013

Financially viable?

Nobody seems to be asking at the moment whether the Work Programme is financially viable for the providers.  The Work and Pensions Committee has taken evidence from "users" and there is a focus on the voluntary sector and small organisations which have found that the programme is not working for them or for anyone else.  Charities which help the homeless are particularly concerned about the specific problems of their clients being ignored; WP providers not even asking whether someone is homeless.  Yet the charity Crisis says that it got two people into work separately from the WP but was contacted by a provider asking for details so that it could claim the outcomes.  Meanwhile the media are focussing on other groups such as the disabled.  I missed the Panorama programme, but I gather that A4e was just one of the providers that didn't come out of it very well.  The response of A4e, as usual, is to point to a success story.  Next Sunday morning at 11.00 Radio 5 Live is looking at self-employment and the WP.
But, as I said, nobody is asking whether the whole thing could founder on the fact that the providers can't afford to run it.  The government insisted from the outset that only the largest and most financially secure companies could be prime providers, and that drove some companies, such as Ingeus, to partner with companies which could guarantee their financial security.  A4e didn't do that.  Nonetheless, the DWP was surprised that some potential primes put in bids that even the government didn't think were viable.  It now appears that the attachment fee income was sufficient to keep the companies ticking over.  Maximus, for instance, said that it had broken even on the first year.  But A4e's accounts to March 2012 showed them in deep trouble, and apparently without the expectation that things would improve much.
So what would happen if a prime decided that it just couldn't afford to go on?  Would the business be transferred to another company - assuming anybody wanted it?  Would they have to pay a penalty for breach of contract?  Is the government busy renegotiating terms in order to save the skins of these companies?  If that happens, I suspect it will be slipped through without publicity.

Someone put a petition on the government's e-petition website asking for the abolition of "work for your benefit/workfare schemes in the UK".  The rest of it was eminently sensible, but unfortunately the DWP was able to seize on the description and deny that there was any such thing as workfare in this country (it's American) and equally no such thing as "work for your benefit" - it's all about support.  How lucky that they changed the title of Labour's pilot scheme from "Work for your Benefit" to "Mandatory Work Activity".  

27 comments:

  1. "Would they have to pay a penalty for breach of contract?"
    I would certainly hope so! Just remember that these same providers received massive compensation when the Flexible New Deal was cancelled by the government - only to be rewarded with massive new contracts doing pretty much the same old stuff under a new title. As a taxpayer I would expect the government to obtain the maximum compensation in the event of any default.

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  2. The BBC Panorama programme is on BBC iplayer until next Monday.

    Meanwhile, the qualitative research report is interesting:

    http://www.york.ac.uk/inst/spru/pubs/pdf/rrep821.pdf

    This is the first of a series of reports co-authored by Professor Roy Sainsbury, who gave oral evidence to the Work and Pensions Committee on 19 December 2012 in connection with their Public Inquiry into the Work Programme scheme.

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    1. The Teflon Don31 January 2013 12:17

      Judi: If you look at page 87 - Section 11.3.2 of the the York PDF doc you will see that DWP Decision Makers have targets for sanctioning Work Programme conscripts.

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  3. I knew via JontyOC they will be begging for more money. If they get more money I well wont be surprised, but i will be furious. If they do get a penality it will be 1p or some silly figure.

    I am getting so tired of these companies promising these things and doing nothing

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  4. The Panorama programme highlighted the cases of a few disabled people and the total lack of support they received. There was also a segment involving a "financial expert", presumably from a London investment institution, who's comments on the WP reenforced what many of us already know. The Work Programme was designed as a huge cash cow and the tendering process made it attractive to large companies to milk this cow for all they could. The "parking and creaming" aspect is inherent in the design of the contracts. Why spend £6000 on someone who is unlikely to generate any return when you can spend pennies on the easy to help group that has a smaller return yet are higher in number.

    It will be interesting to see if this government will start reducing the referral fees as per the original contracts - When the average JSA claiment is only worth £300, the likes of A4e are going to struggle even more.

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  5. I suspect that the Job Centre privatisation carrot (which will happen sooner or later with the tories) was dangled in front of these companies as well as the promise of other lucrative contracts.

    As the WP "Is too big to fail" (Tory speak) I suspect that the taxpayer will be bailing out the weaker ones sooner or later (and A4e comes to mind here).

    Have the A4e Police investigations finished yet? Can we know what the unvarnished truth is?

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  6. One of the reasons (the other being competition) for having more than one prime in each CPA was that should one fail, there would be another in place to pick up the work. Despite Grayling's statements along the lines of he'd be delighted if providers made stacks of money because that would mean they were achieving plenty of job outcomes, DWP arguably messed up the payment profile - in brief, they get paid too much for low numbers of outcomes and not enough for high ones. Putting aside the possibility that they simply screwed up, I assume that part of the impetus was to design a PbR contract that wasn't so risky that nobody would take it on. One of the effects of this is potentially serious though, as modelling suggests that above a certain point (probably not much above minimum performance levels), the payent structure acts as a brake, not an incentive. Caveat in that that sort of modelling inevitably relies on some assumptions that may not be entirely reliable given the range of factors at play.

    Back to the point of a prime failing or exiting the market - it was expected right from the start that one or more would - the question was how many, not if. In the event of that happening, the customers would be transferred to the remaining prime(s) and their supply chains, but DWP are unconcerned about what happens to the failed prime's supply chain. As one might expect, they want a market based solution, so if you're a good subcontractor delivering strong results, the remaining prime will naturally be interested in having you on their own supply chain, otherwise not.

    What would be interesting though is what happens if quite a few start leaving the market. If one or two do, it's a problem for them. If more than that do, it starts to look more like a problem for DWP. The latter have said so often that they won't renegotiate terms that it would be politically (as well as legally) quite difficult for them to do, but what we might see is a bit of tinkering around the edges - a bit of additional money here and there for specific groups, as per the announcement by IDS yesterday of two pilots, one of which is essentially more money for a defined set of WP customers.

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  7. On a previous blog regarding UJM,I went in today to sign on and when my file was pulled there was a big red tag that had "UJM" I asked what that was for "It just means that you are not in compliance with UJM" I reminded the adviser that I had (reluctantly) signed up and we had discussed this last time.My UJM was pulled up and the adviser looked at it "Yes,but you have set it to private and we do not have access" is this mandatory? "If we can't access your file how can we see what you have done" Is it mandatory? "We need to be able to track your job search" Is it mandatory? ..... No reply...Is it mandatory? I have given UJM a good workout 186 applications in 10 days..result=0

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  8. I found the panorama report extremely interesting and would agree from experience that providers of the WP "cream and park" ignoring the needs of those hardest to help for financial reasons.
    I worked for a provider who is a sub contractor to one of the primes. On my induction day (the one and only training day that I ever received) I was told that the compnay was cash rich due to other projects that they had successfully delivered.
    On taking up the role I had a case load which consisted of over 60% of customers who had issues including severe mental health problems, homeless, drugs and alcohol dependence, severe physical diabilities and learning difficulties.
    When I asked for some training to help coach these customers effectively and I was told catagorically that there was no money for training and that I should signpost them to other local organisations or try and source some free training for myself from local charitable organisations.
    In order to meet our targets for outcomes I was encouraged to focus on those that I felt had a chance of getting into work quickly and to contact the others regularly by phone so that we could demontrate to the prime/DWP that they had been contacted ( the term used for this was "light touch" ).
    Stangely enough the company made a huge song and dance about creating the right environment for the customer - putting biscuits on the table, offering tea and coffee, notice boards matching company marketing guidelines etc. Most of the customers that I encountered didn't give a monkeys what our notice boards looked like they just wanted some practical help which we were unable to provide.
    Now, I'm not suggesting that nobody at all has been helped by the WP and I have seen cases where customers have benefited from some of the support delivered but in the majority of cases this support was fairly basic in terms of cv preparation, jobsearch assistance and confidence building.
    I would imagine that there are quite a few providers out there who are still operating financially successfully because they are sustained by the attachment fees for those customers who are harder to help but after they get the fee the the customer is left on the sidelines and the focus is directed at those who are likely to provide a quicker result in terms of outcomes and hitting a target.

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    1. Attended the WP today,ushered into a room with 9 others the subject was titled "Life Choices" a young man introduced himself as a life coach,he was about 22 yo.I was really intrigued and listened intently to the spiel,one question that got my attention was "why do people choose to live a life on benefits" I asked what people are you talking about? us present now?...No but you know who I mean. Little shit! After that the whole group turned on him,polite still,but as one EX-forces kept reminding him "two tours in Iraq and what sort of life experience are you going to teach me"...what was the point ?box ticking?

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  9. Just a quick heads up. Listen to BBC Radio 5 Live (Five Live Investigates) this Sunday at 11.00 AM. They'll be looking at the Work Program with regards to self employment advice given to their clients.

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  10. Today as I went in to the WP with my trusty Blue folder (required) my mentor(?) asked why on the front I had written -THE FAN- did I really like the WP that much?

    So I tried to explain that in my opinion the delivery of the WP was like an electric fan.
    (1)stand in front of it it blows.
    (2)stand in back of it it sucks.
    (3)stand beside it and it does not do a bloody thing.

    Have a good weekend.lol

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  11. I wonder if the more legal minded out there could say if there was any possibility of a class action lawsuit if the government do not enforce there own contracts and punish failing providers and end up throwing money at them indefinitely?

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  12. A company called "Blue Apple Training" has now been added to the fray.
    Seems like more of the same thing, I just checked their facebook page, it looks like some sort of desperate "last stand" job-club.
    I can't find any nitty gritty on them, maybe historian can elaborate on who they are and what they actually do.
    All I've found out is that it's mandatory, and as usual you must attend or you will be sanctioned.
    They call you "Learner of the Week" and post photo's of you on Facebook...is this for real??




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    1. Not wishing to be petty but I would find Blue Apple more credible if they were able to spell Welfare to Work correctly on their website.....

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    2. Well spotted, I missed that one (top right if you're still looking).

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    3. On the blue apple website they say, People choose to go on the blue apple course.

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  13. @ egbertnobacon, Just looked at Blue Apple's site. Looks fairly spartan does it not? They seem to be another run-of-the-mill W2W middle man.

    A couple of thinks stand out.

    Firstly, they claim they can provide a Student discount card. Does this imply that they provide real training that will lead to a recognized qualification?

    Secondly, their office address is in my home city, Leeds. Yet the area code for the company's contact number is for York??!! No York address is given.

    http://blueappletraining.com/

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  14. As far as I know, there is a "certificate" awarded at the end of the course.
    It's so frustrating trying to find out what these people actually are all about.
    Sure they help a handful of individuals into minimum paid no-future work, but does that justify their motives?

    They are pretty new, only been going since May last year, I can't find any information about them, all I know is they take people from a4e and force them to attend the course.

    Just reading the Facebook page is making me cringe..

    http://www.facebook.com/Blueappletraining

    They seem to provide work groups with team building exercises?
    Apparently if your are out of work you have no confidence or self esteem, and need to build things out of twigs in a room full of numptys in order to feel better about yourself.

    Are these guys just chancers jumping on the wagon ?

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    1. They sound as bad as the rest! Parasites on the Taxpayer and offering zilch.

      An article in The Guardian yesterday ; http://www.guardian.co.uk/local-government-network/2013/feb/01/payment-results-staff-fictions about targets set and the lies told by providers to achieve them ....

      Loved the subsequent comment made by a reader who said in the USSR a factory had to make a set number of shoes but didn't have enough material so made the shoes smaller which fitted no-one!

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  15. When the post arrived at the location that I use as a mailing address,I was surprised that I must attend weekly to under go extra training,I have not attended so far,but I must admit I am curious...between JCP and the WP this takes up 8 days(even us scroungers like the weekends off) which leaves me with 12 days a month to attend employment chances..as said curious.

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  16. Well I see the company currently has two directors, John Perrin and Michael Gore. I was disappointed not to find Emma there but early days ..... !

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    1. Blue Apple Training Company Registration No.: 07959891
      Incorporation Date: 22 Feb 2012
      11 Months old
      Financial Year End: 29-02
      Capital: £100.00
      on 22 Feb 2012

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    2. http://uk.linkedin.com/pub/michael-gore/10/b90/419 Some info about Michael Gore

      http://uk.linkedin.com/pub/john-perrin/1b/314/427 John Perrin Apparently they used to work for i2i

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  17. This is written on blue apples website. We love to help employers with recruitment, job seekers with getting a job and training providers increase their job outcomes All for FREE.. so blue apple do this for free? so has a buisiness how do survice finanacially?

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    1. I've rejected a couple of comments on this company because I don't think it's fair to abuse them here. It does seem to be the case that they say that attendance on their courses is voluntary; perhaps they don't realise that it doesn't work like that for the client.
      At least the WP is creating work for somebody.

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  18. How can they not realize when they are the ones visiting A4e and being told by a roomful of people they are being forced to attend. ?
    I'm sure communication between such a small work agency of 9 people isn't that difficult, however they choose to word it.

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