As the FT reports, and as Polly Toynbee notes, the government has announced the companies that will be its preferred providers for a £3bn to £5bn market in back-to-work projects that will see at least 2m people put through welfare-to-work programmes during the next five to seven years.
Who won? Ingeus Deloitte - yes that is the accounting firm - were the big winners.
40 contracts were offered. How many went to non-profit organisations? Two.
How many to public sector organisations? One.
How many did Deloitte get? Seven.
But who, during the trial was twice as effective as the private sector? Job Centre Plus - who have all the expertise built up over years to do the job.
But this is an ideological and not a logical process that is being engaged in. So Deloitte got the deal. And that's yet another example of public funds being captured for private gain.
But they only get paid by results. So large numbers of people on incapacity benefit will be told to go back to work.
Now there's a slight problem there. There are no jobs. So, unemployment is bound to increase, significantly.
That's a foregone conclusion.
So this government is now investing in increasing the number of people who are unemployed. What a strange policy objective. But it all makes sense if Deloitte are paid. Because that's what it's all about.
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And I dare say SpinWatch could put together a diagram (that should almost certainly be a cause and effect diagram) that they came up with for Lansley’s reforms of the NHS that shows the kind of relationships behind this latest example of government by the market , Richard.
Then again, the Tories did promise there would be private sector growth to compensate for public sector cuts and bingo! Here it is. So innovative and entrepreneurial isn’t it (not) ❗
But if Deloittes are paid by results, then (theoretically, I know) they only get paid if they get results.
And whilst moving people from disability benefits to unemployment benefits may, indeed, raise the employment statistics.. we should welcome that in the instances where the person involved is able to work and, so should be in those statistics (whether that is the case, of course, is another debate).
But, I digress… the principle that there should be payment by results in these contracts is sound, and if those results are tangible and measurable then that’s a step up from an awful lot of current schemes where the previous government subcontracted a lot of training and development functions to the private sector and required no worthwhile proof of quality delivery.. but this incentivised way of doing things precludes many organisations from getting involved due to the risk and working capital requirements.. so the pool of possible providers is almost necessarily limited to these uber-corps who will then initiate a cascade of sub-contract arrangements (ideally looking to pass on as much of the risk and cashflow downside as possible to the lowest rung imaginable.. ideally the poor individual at the end actually doing the work) with a share of the pie being creamed off at every level.
So it’s not just Deloittes taking a cut, they are merely the first of many.
That said, I deal with someone involved at a high level in one of the big private-sector organisations who were bidding for contracts, and to say he was ambivalent about the prospect of winning would be an understatement. The climate, together with the makup of the scheme, means that some of the providers, at the very least, aren’t convinced that this is easy money. In a sense, I guess that’s a positive.