The revelations about “recruitment” firm A4e which hit the headlines across the water last week will have come as no surprise to trades unionists in Derry.
The company was chased out of Derry in 2008 after a campaign by the trades council and scrutiny in this newspaper. Everything said about A4e then has now been vindicated. A series of articles in the Guardian devastates the reputation of a company which was once the apple of New Labour’s eye and is now at the heart of the Tories’ back-to-work strategy.
The sheen of success which made company boss Emma Harrison a poster-girl for privatisation has begun to look a little less shiny.
A4e had arrived in Derry to take over training programmes run at the time by a consortium of local groups, including Derry Youth and Community Workshop, Rutledge Joblink, the North West Centre for Learning & Development and the Resource Centre. The company had been given a contract to cover Derry, Limavady, Magherafelt, Cookstown and Coleraine. When unions and local groups questioned its capacity to deliver, the Department of Employment and Learning at first prevaricated, then, as the facts were dragged out into the open, backed off.
Many others must wish now they had taken the same sceptical attitude.
A4e was set up 20 years ago by Ms. Harrison, described as a ‘consultant’. Her chosen area was youth unemployment in which there was, as she put it herself, “a growing market”. By the late 1990s, her company had won favoured status with a Blair government anxious to be seen as proactive in getting young people back to work but equally anxious to be seen as a modern entrepreneurial sort of administration, unlike the fuddy-duddy Labour governments of the past.
A4e has expanded steadily since. In the last financial year, it was handed £180 million of tax-payers’ money. It has no other source of income. It declared a profit of £15.1 million. The five-strong board of directors awarded themselves £12 million. Of this, £8.6 million went directly to Ms. Harrison.
A4e has faced nine separate fraud investigations by the Department of Work and Pensions (DWP) over recent years. In five cases, “irregularities” were found and the company made to pay back the costs of the relevant contracts. A police investigation into one of the other cases is ongoing.
In a separate case, four members of A4e staff at its head office in Slough were arrested in January for questioning and are now on police bail.
The DWP did not call in the police to investigate any of the five instances of “irregularities”. The chair of the commons public accounts committee and former Labour cabinet minister Margaret Hodge last week described this as “astonishing”.
Each of the five cases involved forms being filled out testifying that young people had been placed with named companies when this wasn’t the case at all. According to the Guardian: “In some cases, employers’ signatures were falsified.”
Top Department of Work and Pensions civil servant Devereux explained to the committee that under the procedures they had been instructed to follow, officials involved in allocating contracts had not been able to take A4e’s past performance and behaviour into account.
“Are you seriously saying that that really poor track record is not something you can take into account?” asked Tory backbencher Richard Bacon.
“Yes, I am saying that,” replied Devereux.
The company has also sent droves jobless young people to work for nothing for major firms, under the threat of losing benefits if they refused or failed to turn up. Tesco and a range of other companies last week pulled out from the scheme, fearing damage to their image.
Last Thursday, the Guardian revealed that among the companies being supplied with free labour by A4e was...A4e. Jobseekers attending the company’s offices were invited to stay and work for the company for free - or be stripped of their benefits.
Had Derry trades unionists and Journal columnists been listened to four years ago, much of this pain and loss might have been avoided.
This isn’t just a pretty space, you know.
Eamonn McCann writes in the Journal every Tuesday