Challenges to the UK Government’s work programme – and DWP procurement

It looks like the events of the last week or two are going to test the reputation of the Department of Work and Pensions (DWP) as the smartest procurement team in UK government.

Various private sector firms are withdrawing their support for government work experience schemes on the back of protests about what is perceived as cheap (or free) labour for commercial firms. That is going to put pressure on the entire government Work Programme. Now, we’ve commented before on what a good job DWP procurement did in putting the Work Programme contracts in place a while ago, but these issues are going to threaten the success of the scheme and require excellent supplier relationship and contract management from DWP.

In terms of whether there is a real issue of public concern here, ideally, we would have some way of knowing whether these jobs are truly  additional to what would have happened otherwise. Clearly, if these schemes simply substituted free labour for proper jobs, it wouldn't exactly help the nation, even if it does help the firms involved! But the firms do seem to have backed away somewhat quickly at the first sign of complaint – which doesn’t help those of us arguing that these schemes are actually helping people and are genuinely useful.

Then matters were made worse by the fuss around A4E, one of the largest providers of work related services to the public sector. They are under investigation for fraud – a few minor incidents, they say, but the press is full of suggestions that it may be more serious and widespread than that. The money made by Emma Harrison, the founder of A4E, from the firm has also come under the media spotlight. That led to her resigning first of all as the Prime Minister’s adviser on problem families (“the families Czar”), and then from her Chair role at A4E.

I remember Rod Aldridge resigning from Capita, which was very much his creation, because of a fuss in 2006 about a loan he had made to the Labour Party. The whole incident was a 10-day wonder in media terms, and was soon forgotten, but he stood down for the sake of the firm he had founded. That seemed a shame for him, although the right decision probably for the firm, and I have something of that same sympathy for Harrison.

But there are a number of wider points. The first is that the chances of the Work Programme succeeding have just reduced, which we should all regret given the importance of both increasing employment and reducing welfare dependency in the UK.  If firms don’t support the initiative, then it may struggle. And secondly, all the public focus means that the pressure on DWP to manage the contracts and suppliers successfully and tightly has just been ratcheted up even further. (More on that tomorrow).

It also drives home a message to business – don’t put your head above the parapet and become a special adviser (or “Czar”) to the Prime Minster or government generally if you value the health of your core business. It's not just Harrison (or Aldridge) - Sir Philip Green was undoubtedly more of a target for his tax affairs once he had pontificated on waste in government spending in his 2010 report.

So when you get that call from No. 10, if you’re flattered and tempted to take on some impressive sounding advisory role, you better make absolutely sure there isn’t the smallest skeleton – not even a finger bone, not even a trace of skeleton DNA  – in your closet.

Otherwise, just say no....

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Voices (7)

  1. Peter Smith:

    Let’s face it, some poor s*d has to be based 30 metres from the DWP office in Sheffield!…*

    * joke, Sheffield is a great place, nephew at Uni there and having a great time!

  2. On the Byelines:

    Was Harrison not once employed by DWP and is it a coincidence that the A4E headquarters is but a 30 metre walk from the DWP office in West Street in Sheffield? Small world.

    1. The Guitar Man:

      No and yes!

  3. James:

    >contracts that A4E signed with local government teams

    Which we may have the luxury of viewing via the FOI act soon.

    The problems with the DWP are they all too easily have the wool pulled over their eyes.

  4. Phoenix:

    Let’s not express too much surprise about somebody making money out of Government contracts. Fraud allegations aside, Harrison is perfectly entitled to draw a dividend from her company and pay bonuses to her staff. If Government officials are happy to pay her that much for what A4e does then you can hardly blame her for it. Just make sure you’re ready for a lot more Emma Harrisons and A4e-type companies taking advantage of the Government’s Health and Social Care Bill. There’s a lot more where that came from.

  5. woodbine:

    We’ve seen some of the contracts that A4E signed with local government teams and they feature some eye-watering terms and some equally eye-watering prices.

    They were highly effective at leveraging their profile so that they could charge top whack for what was really just administrative work but they could justify their fees and the need to use them because some of the clients were vulnerable.

    There’s no suggestion that the DWP procured in the same way, but I definitely got the feeling that they overplayed the value of their services, in the same way that a McKinsey or a Bain might do.

  6. Final Furlong:

    I have no doubt that Emma Harrison has done some very charitable things in her life, but (upon reading the Private Eye article) it probably wasn’t the best time to draw down £8m in dividends, while handing out £4m in bonuses to a handful of folk in your ‘top team’, at the same time as describing in your report and accounts that you should pursue other key markets in government to make even more money. You have every impression that they’re ‘third sector’, but they’re first class at making profits, especially out of the Work Programme. The role of ‘families Czar’, to encourage Ministers, and the like, to adopt a wayward family, was, of course, complete nonsense.

    A bit too much back-scratching going on, and, upon observing the photo in this link (see link)……..

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