FAILED JOBS TSAR YOU PAID £9m
And here she is grinning at her stately home (yes, really) — another damning example of how your taxes are squandered
AS FORMER Chairman of the Public Accounts Committee, Dame Margaret Hodge spent years investigating how public money is spent. Yesterday, she revealed the shocking waste at the BBC. Today, she examines how private companies make millions as a result of Whitehall incompetence.
Only rarely did crude party politics intrude into the working of the Public Accounts Committee. Most of the time, we were a very cohesive group — despite the fact that I was labour and the majority of the members were Tory.
Matthew Hancock, the Conservative MP who’d been George Osborne’s chief of staff before entering Parliament in 2010, was the only one who invariably prioritised Tory interests over the public interest. Did that harm him? not a bit: rising on his former boss’s coat-tails, he secured promotion.
Boris Johnson’s younger brother, the Conservative MP Jo Johnson, was promoted at the same time, but his contribution to the committee had been far greater. He was a clear, lateral thinker who was prepared to express independent views based on the facts.
But Hancock had more sway. Because of his close links with the party leadership, he was feared — you could sense the change in atmosphere when he entered the room.
And once, to my dismay, he all but succeeded in suppressing vital evidence on fraudulent, inappropriate use of public money.
In 2011, we started examining private companies that had taken over some of the work of Government-run Jobcentres. One of these was A4e, which by the end of the year was earning £200 million a year from public contracts.
It was run by a relentless networker called Emma Harrison, a friend of David Blunkett who’d gone on to become a close ally of David Cameron. The prime minister even gave her a CBE and made her ‘jobs tsar’.
Unfortunately, an audit report revealed the Jobcentres had outperformed A4e in an earlier contract. In A4e’s case, it had missed its target of finding work for 36 per cent of applicants — only 15 per cent of them got jobs.
yet Cameron’s government didn’t seem to care — and A4e was duly awarded a swathe of contracts. That’s when Emma Harrison hit my radar again.
One of A4e’s contracts covered my constituency, so I visited its premises in Barking and Dagenham. There, I found they had sub-contracted the work of finding jobs for claimants to a local voluntary organisation.
But instead of passing on the £400 earmarked for each out-of-work client, they were top-slicing £50 as a management fee. So what did they do for this money?
ACCORDING to the A4e manager, they set up introductions with national employers such as Tesco. But I knew the voluntary organisation doing all the work had been placing clients there for years.
I was incensed: a large private company was taking taxpayers’ money for minimal effort. So I came back to Westminster and asked my assistant to scour the internet for information on A4e.
That’s how we discovered that Harrison had made so much money that she’d just given herself an £8.6 million dividend. That’s £8.6 million earned off the backs of the unemployed.
A week later, in February 2012, we had a hearing on the Government’s Work Programme and I asked A4e about her dividend.
now the issue was in the public domain, whistleblowers who’d worked for A4e started contacting me in overwhelming numbers.
Among the documents I received was an A4e internal audit report full of evidence that staff had been fraudulently claiming for placing people in work that lasted only a couple of days, they weren’t providing training and they were cutting corners all over the place.
I selected four whistleblowers, each of whom had strong and credible stories that deserved to be heard in public. That was too much for Matthew Hancock.
nakedly ambitious, he’d told me his time on the Public Accounts Committee was a training ground for ministerial office. And now he saw where his duty lay. A public hearing with whistleblowers would have seriously damaged one of the Government’s flagship programmes. So Hancock, supported by other Tories on the committee, argued the witnesses should be heard in private. And with their inbuilt majority, the Tories ambushed the committee.
One whistleblower later said: ‘It’s taken a lot for us to come and speak in public about what we see as fraud. We have been silenced.’
The day after our abortive hearing, the papers were full of stories the committee had been ‘gagged’. Hancock was livid his scheming had been exposed, so he again set to work on his party colleagues. This time they presented me with an angry letter, demanding public statements from me that denied the gagging of witnesses. I refused to do anything of the kind.
It was left to the media — Channel 4, the Daily Mail and The Mail on Sunday — to investigate the whistleblowers’ stories.
Among them was Amy rae, who’d worked in A4e’s Edinburgh office and said she’d never been given money to train clients — so she’d had no option but to send them home. ‘There was nothing we could do with these young people,’ she said. ‘It was heart-breaking.’
When inspectors from the Department for Work and Pensions (DWP) arrived, she said: ‘I had to stage manage a bogus training session, complete with a fake chart. It was awful. It was all lies, a facade. We just pretended.’ Finally,
in March 2015, ten A4e employees in Slough were convicted of fraud.
They’d claimed 558 successful job outcomes for claimants, but nearly a third of the claims were fake. They’d even offered bribes to claimants to get them to complete bogus forms.
Emma Harrison was forced to resign as the PM’s champion for troubled families and stepped down as company chair. Yet just a fortnight later, A4e was awarded a £30 million contract by the Skills Funding Agency to provide education in prisons.
In 2015, A4e was sold to another company for £34.5 million. With her 85 per cent share-holding, Harrison no doubt walked away with millions.
Now renamed PeoplePlus, A4e still holds nine of the 40 contracts on the Government’s Work Programme. And Matthew Hancock? He’s now a minister at the Department of Culture, Media and Sport. AT THE top, the Civil Service has always seemed like a masonic lodge.
When I checked on the background of the current cohort of permanent secretaries, all bar two had been to Oxford or Cambridge. Yet despite good academic qualifications, most have neither the life experience nor the skills needed in the 21st century.
When the Public Accounts Committee questioned permanent secretaries from the Home Office and the Ministry of Justice, for instance, they admitted they had never managed or run a contract.
As a group, they fight like tigers to resist change. Protecting their own takes precedence over securing the best people for the job, and openness is seldom regarded as best policy.
And if officials fail, it doesn’t matter: failure is rewarded at the top. Robert Devereux, permanent secretary in the DWP, was this year awarded a knighthood — despite presiding over costly, utterly shambolic reforms of the benefits system.
Lin Homer, former tax mandarin, has been made a dame and is about to walk away with a £2.4 million pension pot.
This must be small consolation to the hundreds of thousands of people who tried to contact HMRC during her reign, only to find no one answered the phones.
There’s really only one solution: we need to break up this exclusive club. It won’t be easy, and it will take a brave prime minister to take on the might of the Civil Service.
It’s not just its leaders — the Civil Service as a whole remains stuck in the past. Most public services are run by private providers, which means someone needs to draw up contracts and manage them. Someone who has good commercial, IT and project management skills
Unfortunately for us, there aren’t enough civil servants who do. Again and again, we found contracts had been badly drawn up and projects mismanaged. Then the same mistakes were made again at a cost of more millions to the taxpayer.
Even when companies were found to be ripping us off or providing a substandard service, the penalties for doing so were often pathetic. Why? Because no one had written proper penalties into the contracts.
Take G4S and Serco, paid to provide tagging for offenders. Later, it turned out both companies had been wrongly billing the taxpayer for prisoners who were back in jail, exprisoners who’d left the country, people who’d never been tagged and individuals who’d actually died.
It was a scandal, but what was equally shocking was civil servants did nothing about the overcharging for eight years because they hadn’t mo monitored the contract. And what happened to G4S and Se Serco after they were caught out? They weren’t punished, they secured more government contracts. To add to the dysfunction, civil se servants who oversee these contracts ar are expected to change jobs every co couple of years. That’s the traditional ro route to promotion.
A new project to build nine new fire co control centres across the UK, for in instance, was led by ten different of officials over a five-year period. It’s lit little wonder it ended in disaster, wi with £500 million wasted. When things go wrong, most pe people would agree that it’s important to find out which individuals ar are responsible. But that’s not the way the civil servants operate. During the five years I chaired the Public Accounts Committee, some of officials did leave their jobs after th their performance was criticised — su such as head of tax Dave Hartnett. But many did not. In the NHS, Sir Ne Neil McKay, chief executive of NHS Midlands and East, signed a disastrous contract between Hinchingbrooke Hospital in East Anglia and a private healthcare provider.
Yet he took a pay-off reputed to be worth £1 million and then popped up again as chair of Manchester’s cardiac management board.
DID you know that the contracts between the Government and private companies are often secret?
Taxpayers are giving companies billions to provide public services yet even the Public Accounts Committee isn’t allowed to know exactly what was agreed.
Too often during our hearings, both private contractors and government departments hid behind commercial confidentiality to avoid being held accountable.
The DWP, for instance, refused to divulge information on the hugely expensive programme to get the unemployed back into work.
The Department for Culture refused to reveal details of BT’s contracts to provide superfast broadband in rural areas, which led us to suspect the company was ripping off the taxpayer and the consumer.
Everyone has hidden behind taxpayer confidentiality for too long.
If civil servants had to be open about dealings involving public money, I have no doubt that we’d get vastly better value.
At a time when most people are struggling to make ends meet, it’s more important than ever that their taxes should be well-spent.
If it matters to voters, it should matter to the government — yet despite all our efforts, billions continue to be squandered every year.
That’s why we urgently need not only a radical rethink of the Civil Service, but also more openness, more accountability and a relentless focus on efficiency and effectiveness.
It’s a tough challenge but ultimately achievable. And it would soon yield huge rewards: better services, more for less — and renewed confidence in the people who represent us.