Monday, August 24, 2009

Nice Work If You Can Get It

The wages of unemployment

Given that romantic strolls along sunset beach were out (on account of there being a howling gale and no sunset), one staycation evening Mrs T and I found ourselves watching a new C4 reality TV show.

It's about a woman who lives in a huge eff off mansion (Thornbridge Hall above), having made an even huger pile of cash.

She seemed jolly pleased with herself, as well she might. As the number one player in a growth industry, her business is booming. Even better, her biz is devoted to helping those far less fortunate than herself, so she and her staff get to feel real good about themselves.

But what really got our attention was that all her cash comes not from those she's helping, but from us - the battered and bemused British taxpayer. Our Simple Shopper Alarm began screaming.

The show is called Benefit Busters, and the lady in the mansion is one Emma Harrison, founder and chairman of a company called A4e (Action 4 employment).

A4e is a job broking company who describe their principal mission as being "moving people into jobs and promoting sustainable employment". Which right now is a very saleable proposition - especially to politicos who need something to clutch at as the economy sinks into the jobless joyless abyss. And Emma's trading results show just how saleable she's made it:

Now don't get me wrong - Emma is clearly a star, and a glance at her upbeat website (including her own personal lower case blog) shows just how well she's packaged and marketed her services. She makes tackling long-term unemployment sound like a branch of the entertainment industry rather than a canker that destroys lives. No wonder our clueless politicos and commissars have been such ready customers (Bonkers Blunkers is a £30k pa consultant).

So good luck to her for spotting and exploiting a great business opportunity (and here's her entry in the Sunday Times Rich List).

But as always, the big question is whether we taxpayers get value for money?

On last week's show, ten unemployed single mums living on benefits were put through one of A4e's six week re-employment programmes. They were under the wing of Hayley, a brassy Northern lady straight out of Corrie, who tutored and bullied them through the course. Mrs T and I rather took to her, although Vicki Woods was less impressed:

"A similar-sized woman to Jade Goody, but with Sharon Osbourne’s hair and make-up, Hayley... was comedically forthright. She told the women they were “dreary” and badly dressed, explained that work was a blessing, made them cry, kissed them better and eventually got five of them a job at Poundland. The viewer (me) was left loathing the loudmouth Hayley, empathising like mad with the poor dreary women."

(In case you missed it, you can taste Hayley here).

As Woods explains, only four of the ten women actually ended up with a job. And that was no more than a two week try-out at Poundland.

A4e's overall success rate?

According to Jim Knight, DWP minister of state for employment and welfare reform:

“The Department currently has 47 contracts with A4e for the delivery of a range of welfare to work provision. On those contracts where we count job outcomes, during the period 2008-09, 20 per cent of people starting provision delivered by A4e have started work. Some customers, however, will still be on provision.”

20% - hardly the greatest record.

Especially when you consider that some of those jobs will be displacing others who might have got them anyway (Poundland would have had to employ somebody). And especially when you consider the ever present risk of cream-skimming - ie only taking onto the programme the easiest to place candidates. And especially when you consider that some of the "successful" candidates will drop out again after a relatively short time.

We've blogged the pitfalls of job brokers before. They are everyone's Great Idea for tackling long-term unemployment. Yet there is virtually no evidence that they work in the aggregate. When the Public Accounts Committee looked at DWP's use of private job brokers under the New Deal for Disable People, they found:

"There are more than 500 providers contracting with Jobcentre Plus to deliver one or more of the disability programmes. The quality and value for money of provision varies widely and acceptable standards are not always achieved. Between 2002 and 2005, for example, over 50% of the learning offered in Workstep provider placements was judged unsatisfactory by the Adult Learning Inspectorate.

...Providers of the New Deal for Disabled People may be deliberately picking people who are easier to help, at the expense of the more difficult to help. The contract for New Deal for Disabled People specifies that providers must accept all self-referred people who are eligible. However, such a stipulation does not preclude subtle encouragement to the easiest to place and discouragement of those who would require more effort."

So good luck to Emma, and we hope she enjoys her mansion.

But don't expect us to believe she's giving us value for money.

The wholesale use of job brokers is turning into yet another triumph of the Simple Shopper's art. Dave and George will need to grip it soonest.

PS A4e has attracted a rapidly growing army of critics. In June it was revealed that it was being probed by the DWP for possible fraud: "The DWP started its investigation into A4e's Hull office in May 2008, after discrepancies emerged in "confirmation of employment" forms submitted by the company. Two recruiters filled in forms meant for employers who agreed to take on workers. In some cases, employers' signatures were falsified. One of the recruiters had also entered into a fraudulent deal with a local temp agency." And here's a dedicated blog on the New Deal Scandal, including many posts on A4e.

PPS During the TV prog, one of the unemployed women on the A4e course put her finger on the real reason we have so many long-term unemployed. It turned out her benefit level was substantially higher than what she could earn at Poundland. She was getting £460 per week on benefits, which was £40 higher than she could earn, even with the government's employment subsidy. So quite sensibly she jacked in the job and reverted to benefits. Now, I wonder if anyone can see the lesson for George...

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