24 Oct 2012

£46m payout for A4e – despite missing Work Programme targets

A4e received £46m from the taxpayer in the first year of the government’s flagship Work Programme – despite failing to meet minimum targets for getting the long-term unemployed into work.

The Work Programme is central to the coalition government’s welfare reforms. It promised a revolution in getting people back to work.

But Channel 4 News has seen data which appears to show that A4e, the troubled welfare-to-work provider – and the country’s second largest Work Programme contractor – failed to meet performance targets in the first year of the programme.

Emma Harrison, A4e’s main shareholder and the company’s former chairman, told Channel 4 News the figures were wrong. “I cannot recognise the numbers you are talking about. They’re wrong. You have got all the numbers wrong,” she said.

Ms Harrison added that the media focus on her company led to her being “bullied out of a job” and her children being bullied.

“I’m a useful face to have a go at, but I’m not a politician. I’m not experienced at this stuff. They used me, and I stepped down, which is still upsetting,” she said.

A4e was paid £45.9m for its involvement in the programme.

What is more, a whistleblower who is a former senior manager at the company claims A4e is unable provide adequate support and training for unemployed customers.

Limited outcomes

In the first 12 months of the Work Programme, just under 94,000 people were attached to A4e. Under the attachment scheme, the contractor offers a programme of support and training to help participants back into work.

Companies like A4e get a £400 fee for every referred customer who is on jobseeker’s allowance. Clients considered harder to help can attract a fee of £600.

We pay for (customers’) bus fare the first weeks of work, or provide them with some equipment like boots, so that the job is claimable and it can’t be questioned. Former A4e senior manager

If the jobseeker is found work and remains in work for six months, this is called an “outcome” – and the government pays out another £1,200 to the contractor, with further payments every month up to 20 months.

On the figures we have seen, however, there were in the case of A4e only 3,400 outcomes for its 94,000 jobseekers – or four out of every 100 attachments. To keep the contract, the government stipulates contractors should achieve a minimum target of 5.5 per cent.

And the cost of all this to the taxpayer? The government paid out a total of £45,893,535 to ensure the short-term employment of 94,000 people, of whom just 4 per cent were in the same job six months after they started.

Put another way, every successful A4e job outcome cost £13,498.

Watch below: Krishnan Guru-Murthy interviews Emma Harrison, A4e’s main shareholder

Asked why she had paid herself a £250,000 dividend, Emma Harrison told Channel 4 News that she had “invested £50m in the success of the Work Programme” and as a shareholder, was entitled to a dividend.

“I run a successful business. Tens of thousands of peoople are getting jobs. I am an entrepreneur who has invested tens of millions. For every pound the taxpayer spends, they get £2 back.”

Unmanageable caseloads

Unemployed customers who have spoken to Channel 4 News say they have suffered as A4e resorts to ineffective and sometimes questionable practices to maintain its commitment to the Work Programme.

One former senior manager said staff had been leaving the company because they were unable to cope with pressure and stress, as a result of which customers sometimes had up to five different advisers every year.

We have an active programme which seeks feedback from customers on our programmes, which enables us to continually improve the experience they receive. A4e statement

Unmanageable caseloads of up to 200 jobseekers also meant advisers were focusing on their “top 10” customers in order to hit monthly targets, he said.

The whistleblower said some clients were being forced into “zero hour” and “temp” jobs in the hope that they would become permanent. But if the job failed to materialise, customers were forced back into the benefits system at great cost.

And A4e had sought to benefit when a customer found work without the company’s help. “We always have to be able to demonstrate that we have done something for the customers,” he said.

“So we pay for their bus fare the first weeks of work, or provide them with some equipment like boots, so that the job is claimable and it can’t be questioned.”

But Ms Harrison told Channel 4 News: “A4e is a wonderful company and I’m incredibly proud of the organisation. What makes me sad is that my staff were bullied and it’s very upsetting after 25 years to see what they went through – these false allegations, sensationalist stuff.

‘Active programme’

A4e told Channel 4 News that the figures we had seen are now out of date. They told us: “This data does not give a full or accurate picture of Work Programme performance.

“We are disappointed by the feedback given by two of our Work Programme customers… We have an active programme which seeks feedback from customers on our programmes, which enables us to continually improve the experience they receive and the services that support them to find sustainable employment.”

A4e hit the headlines at the start of the year when it emerged Emma Harrison, the company’s founder and chairman, had paid herself a dividend of over £8m.

It was also revealed the welfare-to-work provider had been forced to pay back public money after a series of investigations into fraud allegations dating back to 2005. Ms Harrison subsequently resigned as chairman.

Watch below: Social Affairs Editor Jackie Long and Krishnan Guru-Murthy analyse the issue