As the Scottish Government readies itself to commission newly devolved employability services for the unemployed, including those with disabilities and mental health issues, The Ferret can reveal close links between the SNP and controversial private firms who are likely to bid for contracts.
The services being contracted out – to start up in April 2017 – are meant to help people back into work, including the long-term unemployed, single parents and those dealing with mental health, disability or addiction issues.
However, during the advisory process the Scottish Government has been liaising closely with the private welfare-to-work lobby, prompting concern over the commissioning process and some of the companies involved.
Firms who could win Scottish contracts include Ingeus (owned by Arizona-based Providence Service Corporation), one of the two current providers of the much criticised Work Programme scheme in Scotland, and G4S.
The latter has recently been embroiled in controversy in the UK over allegations of staff using unnecessary force and intimidation on teenagers at Medway young offenders’ centre and attempting to conceal their actions – and as long ago as 2004 it was running Rainsbrook detention centre, where teenager Gareth Myatt died after being restrained.
G4S has also been in the press over the painting of red doors at refugee accommodation, resulting in the harassment of people seeking asylum; guards asleep while supervising serious criminals; and the death of Angolan man Jimmy Mubenga while he was being deported. G4S guards escaped manslaughter charges, but were proven to have shared racist text messages, information that was never shared with the jury.
The Work Programme, currently the main plank of UK employability services, is a compulsory scheme where attendance at interviews is a condition of benefit entitlement. Failure to attend means that people are sanctioned and lose their benefits.
The scheme in Scotland, worth £334m over the nine years of its operation to Ingeus and fellow provider Working Links, has been regularly criticised, with people seeking employment reportedly being expected to cold call companies for hours on end or meet a revolving cast of different advisors.
Results for more vulnerable clients have been poor: Inclusion Scotland said in evidence to Holyrood’s Welfare Reform Committee that just five per cent of long-term sick and disabled people successfully went through the Work Programme, as opposed to a 24 per cent success rate for all referrals.
The report also stated that a disabled person on the Work Programme was three times more likely to be sanctioned than to find a job.
Since 2008 the percentage of disabled people in employment in Scotland has fallen from 49% to 44%, compared to an employment rate for the non-disabled of 81%, which is similar to before the recession began, according to disability network Inclusion Scotland.
Those with an active mental health condition and people with learning disabilities – who, for example, can struggle with processing information, learning new skills or carrying out everyday tasks – experience an unemployment rate of around 90%.
Yet when the Scottish Government set up the official advisory group, it invited lobbying body the Employment Related Services Association (ERSA) to take part. Ingeus chief executive Jack Sawyer is on the ERSA board and its vice chair is Alex Stevenson of G4S. Ingeus’s head of communications is also Tijs Broeke, formerly chief lobbyist for G4S.
Head of strategy and policy for Ingeus in Scotland is lobbyist Grant Thoms. He is a former SNP councillor who ran campaigns for the party for three years and also stood for Westminster. Thoms ran a workshop at the SNP disabled members’ conference this January before First Minister Nicola Sturgeon gave the keynote speech.
This story raises very serious concerns about the process for commissioning Scotland's new employability services. Iain Gray MSP
Iain Gray MSP, Scottish Labour spokesperson for opportunity, told The Ferret: “This story raises very serious concerns about the process for commissioning Scotland’s new employability services.
“There must be transparency about how contracts are awarded. Any sense of a cosy stitch-up will not be accepted by the public, especially if the SNP Government is planning to simply hand the Work Programme over to the same people who have failed to make it work so far.
“Surely the SNP are not once again going to get devolved powers and then fail to use them to do things better. Scottish Labour believes that getting people back into work is best done at a local level.”
John Wilson, former SNP MSP and Scottish Green Party spokesperson on employment, living wage and skills, said:
“The new powers coming our way give Scotland a chance to make a clean break with the cruel and humiliating manner in which the UK Government deals with people who struggle to find employment. Employability services in Scotland should be supportive, tailored to peoples’ individual circumstances and able to reach even those furthest away from the job market.
“The involvement of private firms that want to harness public services to serve their own profit-making agenda has had a detrimental effect on employability support in the UK. We cannot let the same thing happen to services here in Scotland. It’s crucial that the Scottish Government keeps public services in public hands , and contracts public or third-sector providers to support our jobseekers.”
However, ERSA chief executive Kirsty McHugh defended the body’s involvement in the advisory group. She said: “There is the opportunity to do something hugely exciting for jobseekers in Scotland and it is right that we share learning from across our entire membership, the vast majority of whom are not for profit.”
Chief operating officer for G4S employment services, Alex Stevenson, said: “We have helped more than 50,000 people into sustainable long-term work in the areas we deliver the work programme, and I am proud of our record of securing the training and support people need to get back into the job market.
“These are complex programmes to deliver and we will always work with partners to share expertise and lessons learned.”
It said that any Scottish approach should be tailored around each person rather than standardised; should include partnership between agencies, such as employability, education, health and social care; and should drive towards ‘real jobs’ by engaging with employers and using market intelligence. It also said that newly designed programmes should be designed nationally but adapted for different areas of Scotland and that people with high needs should have a separate programme designed with them in mind.
At an advisory group meeting on 13 January 2016, consultancy Rocket Science delivered their Scottish Government-commissioned analysis of the results – yet Ingeus is also one of their clients.
Rocket Science director Richard Scothorne, who gave the presentation, maintains there was no conflict of interest.
He said: “Our independent and objective advice on how to help people find work is sought by organisations across the public, private and third sectors. These include Ingeus and a number of other regular bidders for public contracts. We have no financial interest in any of them.”
“We recently carried out a piece of work for Ingeus to produce a public report to contribute to the current discussions in Scotland. We drew on their information and talked to clients so we could describe client experiences and perspectives on the Work Programme.”
“This Rocket Science report was published on the Scottish Government’s Employability in Scotland website and was widely publicised. We have had some great feedback about the value of its findings.”
“Our task for the Scottish Government was to summarise the 215 responses to their recent consultation – which was about what a Scottish approach to employability should be and the features of a successor programme within this.”
“We were not asked to comment or advise – just to read all the responses and draw out the main themes and issues. Ingeus put in a response – as did over twenty of our other clients.”
According to the official agenda for that meeting on 13 January, the Scottish Government’s Cabinet Secretary for Fair Work, Skills and Training, Roseanna Cunningham, offered to meet members including ERSA for dinner after the meeting to discuss matters further. However, this was unminuted, so the public is not party to what was discussed.
In response to The Ferret’s findings, a Scottish Government spokesperson said: “There are many voices on the advisory group which reflects a wide range of stakeholder interests.
“These interests include existing providers from ERSA and the Scottish Training Federation, academia, trades unions, business representation, third sector representation, disability representative interests, Skills Development Scotland and the Department for Work and Pensions.
“The Scottish Government listens carefully to all stakeholders but decisions on future employability services in Scotland are for Scottish Ministers to make.
“Any bids for the delivery of services will be open competition in line with current procurement rules.”
A troubled history
The Work Programme has a troubled history. In its first years across the UK, the Work Programme led to just 3.6% of participants getting long-term jobs, less than if the programme hadn’t existed, according to the Department of Work and Pensions’ own estimates. Meanwhile, employees of Work Programme provider A4E in England were jailed for fraud.
The Scottish Government’s recent employability services consultation had responses from 17 people on their experiences of the Work Programme – 12 of these people gave the scheme one mark out of five in reponse to the question “If you’ve had experience of the Work Programme, how would you rate the support received?”
Comments included “I was left to my own devices and had very little or no support or guidance” and “No support given which would have enhanced my skills and provided me with the opportunity to use my existing skills, only interested in meeting their targets.”
Ingeus Scotland director Paul De Pellette defended the company’s record: “Working with our partners from the public, private and third sectors, we are extremely proud to have supported over 45,000 long-term unemployed people in Scotland into jobs since 2007.
“We work with our clients to build a tailored package of support for everyone. We regularly ask people we support what they think of our services, and over 8 in 10 of them are happy with the support they get from our people.”
It takes longer to work with someone with health conditions, but we have to try to meet indicators - and that's how some people end up sidelined Work Programme worker
However, one former Work Programme employee told The Ferret that the scheme was disastrous:
“It’s the hardest programme I’ve ever worked on. Everyone is coming through the door in mass volume. There is no opportunity to differentiate between Jobseekers and ESA [Employment and Support Allowance, which replaced Incapacity Benefit]. Staff do want to help people, but we received thousands more people than expected – we were always firefighting.
“The programme is incessant. There were 150 clients expected every day – that’s a conveyor belt!
“It takes longer to work with someone with health conditions, but we have to try to meet indicators – and that’s how some people end up sidelined.
“People coming in are often not informed before they come in about what it means to be referred to the Work Programme. I’ve had people screaming at me for the whole appointment, even someone wetting themselves. But we can’t get them to calm down enough in time because of the volume of other people coming in.
“I’ve also seen people assessed wrongly who should never have been sent in.”
It would also appear there has been a change in focus since the advisory group was formed. The consultation paper emphasised “making the best use of resources to help unemployed people into work, while focusing specifically on people who face the most barriers to work”.
Cunningham also told the advisory group early on: “In developing our future services in Scotland, we have the opportunity to develop a Scottish approach to helping unemployed Scots find sustainable and fair jobs, regardless of the specific barriers they may face.”
“This will involve putting support in place for people the length and breadth of Scotland to make the most of their skills and potential.”
“A Scottish approach will deliver more for those who have not benefitted from current programmes, particularly those furthest from the labour
However, the later outcome from task force meetings suggests that resources should be directed towards those closer to the workplace.
According to the January minutes, there was: “Agreement that focus needs to be given to those further, rather than furthest from the labour market. Consensus on focussing devolved resources on those for whom work is a reasonable objective/with the greatest prospect of work.”
There is a risk that this could mean that people with complex needs don’t get the help that Cunningham and the Scottish Government were promising at the outset.
Resources may also be a challenge as Chancellor George Osborne recently announced drastic cuts in funding for employability, which could limit Scotland’s ability to deliver new services.
The Scottish Government told The Ferret that work is under way on the detailed implications of the Fiscal Framework agreement and that “the final funding for devolved employability services will be determined shortly”.
Previously, Roseanna Cunningham expressed the potential for Scotland to offer quality employability services once Work Programme contracts, commissioned by the UK Government, expire.
However, despite the Scottish Government urging faster devolution, the UK Government extended Work Programme contracts in 2014 for another three years.
Cunningham told the BBC at the time: “[The] Smith [Commission] is explicit. Devolution of the Work Programme should happen as soon as the current contracts expire. Instead of honouring that, within just a couple of days of Smith, they are extending the contracts. That is breathtaking arrogance.”
Jobcentre Plus and the sanctions regime will remain reserved despite the agreed devolution of employment support services under the Smith Commission.
Meeting agendas and minutes of the government advisory group can be found here, except the most recent February meeting.