A4e fails to make the grade

Iain Duncan Smith has decided that A4E and other Work Programme firms should be exempt from Ofsted inspections.

Under previous employment schemes like the Flexible New Deal and Pathways to Work, Duncan Smith's department got Ofsted to inspect the "benefit-busting" firms involved.

The Department for Work and Pensions knew that there had to be some attempt to regulate the contractors - but the results were not great.

A4E and many other contractors on these schemes came away with mere "satisfactory" grades.

However, I found that the DWP has excluded contractors on the latest Work Programme scheme from inspection by Ofsted.

This is despite the fact that the £5 billion work programme is throwing much more cash at firms like A4E than the Flexible New Deal or Pathways to Work.

The DWP told me that "under previous programmes, DWP paid providers mainly for delivering specified processes - this meant Ofsted could assess how these processes were being delivered."

However, the DWP now believes that "Work Programme providers are paid primarily for the results that they achieve in supporting people into sustained employment. They have the freedom to design the support that they think will achieve this. It would be difficult for Ofsted to assess such individually tailored provision effectively."

The DWP is referring to what is called the "black box" approach to the multibillion-pound Work Programme.

Contractors like A4E are allowed to draw up their own programmes, but will supposedly only paid on results.

The DWP believes the contractors should have freedom to act as they choose inside the black box of the programme without Ofsted examining their work.

However, the DWP decision has arrived just as Ofsted has scrapped its "satisfactory" grade, replacing it with a stricter "requires improvement" rating.

Work Programme contractors have often only achieved "satisfactory" results on previous programmes.

Out of the 12 most recent Ofsted reports on A4E, only two were rated as "good" - its most recent "good" rating being back in 2008.

All the rest were "satisfactory" - a grade that would now be described as "requires improvement."

A4E has managed to avoid any Ofsted inspections since 2010, but in reports up to that time Ofsted highlighted a job entry rate that "remains below contractual targets" or showed "outcomes for participants are inadequate" and "progressions to sustained employment are low."

The DWP claimed that all will still be fine despite the lack of Ofsted involvement because "performance managers will monitor providers' performance against targets for the number of people achieving a job outcome. Compliance monitoring officers will check a sample of participants each month to ensure that providers are delivering their minimum service standards."

However, when I asked asked the DWP for its "compliance reports" on A4E under freedom of information, the department claimed they were "commercial-in-confidence."

According to the department, "The compliance reports contain confidential information provided by each supplier and are part of their approach to delivering the service on behalf of the department. This information is deemed to be a unique approach and as such is the intellectual property of each provider."

The DWP believes that the compliance reports - including ones which show A4E fiddled the figures and claimed cash it was not due - are secret because they are the "intellectual property" of the firm.

Hitting the coalition has some collateral damage

If you want to hit the coalition government, you have to shoot through some new Labour defences.

Just look at everywhere Ed Miliband has hurt the government.

Over Murdoch, for example. Miliband embarrassed David Cameron over his closeness to the media mogul. But this also meant embarrassing Tony Blair, who is godfather to Murdoch's daughter.

Miliband also put Cameron under pressure over bankers' bonuses.

But allowing the government-owned banks to keep on partying like it was 2005, to ignore the public interest and keep splashing out bonuses was helped by Gordon Brown and Ed Balls.

The "arm's-length" control of these banks through UKFI - a kind of government-owned bankers' fan club - was a Brown plan.

Miliband has the Tories squirming on the health reforms. But the principles of introducing "competition" and privatisation were set up by the last Labour government.

Even some of the structures, like the creepy management consultants at Monitor who have much of the secret power in Lansley's scheme, were set up by Labour.

Now Iain Duncan Smith and Chris Grayling have a "workfare" scandal blowing up in their faces.

They are forcing unemployed people to work for free for big firms like Tesco. Handing over huge fees to supposedly "benefit-busting" firms like A4E which use taxpayers' money to enrich their bosses while delivering poor results makes Cameron look shifty.

But the "work sanctions" and the contracts with A4E all go back to new Labour as well.

Occasionally Lansley or Grayling or Cameron bleat: "But Labour did this too."

That was Cameron's defence over A4E - pointing out Labour had given the firm's boss Emma Harrison a CBE.

I think that doesn't matter so much, particularly when Labour brings forward new shadow ministers less tarnished by the mistakes of the last Labour government.

The bigger danger is that shadow ministers are slow to have a go at the coalition because they in their hearts think Labour should also act this way.

Taking on the coalition means collateral damage for new Labour ideas. And some shadow ministers are still more loyal to these ideas than to the party.

They fear the pro-market neoliberal beliefs are strapped to the front of Labour's tanks. If Labour actually makes an advance against Cameron, their true loves will suffer.

You get a small sense of this looking at a recent attempt to rally new Labourites around a pamphlet called Labour's Business.

The pamphlet was supposed to rally the pro-business Blairites. And who did they ask to write a chapter?

Samantha Windett and Terry Owens. Who are they? The chief spin-doctor and director of A4E.