Who are the real welfare scroungers? The 'Poverty Pimps' on the Government's work experience programme?

In a recent interview about the Government`s 'Work Programme', Employment Minister, Chris Grayling, had this to say:

"What we have tried to do is create a situation where our interests and the interests of providers are really aligned. They (the providers), can make shed loads of money by doing things we would absolutely love them to do."

Undoubtedly, over the years, some poverty pimps who have been involved in delivering government schemes for the unmemployed have made 'shed loads of money' out of the taxpayer, but to what extent, has this been value for taxpayers money?

One of the 18 mainly private companies that has been contracted to run the Government's 'Work Programme' is 'Action for Employment' (A4e), whose majority shareholder, is the multi-millionaire Emma Harrison.

At a recent session of the House of Commons 'Public Accounts Committee', it was claimed that A4e had an 'abysmal' record of delivering government programmes and the committee asked why the company had been awarded contracts to provide the 'Work Programme'. Margaret Hodge, the Labour MP who chairs the committee, wanted to know why the government had awarded new contracts to companies with such a poor track record and she added:

"It seemed rather surprising to me that you didn't have regard to the past performance of contractors. Why not?" she asked the Department of Work and Pensions (DWP) permanent secretary, Robert Devereux, and added: "A4e...their performance on (Pathways-to-Work) was abysmal."

Richard Bacon, a committee member then pointed out that A4e, only got 9% of clients into employment in the 'Pathways-to-Work' programme when 30% had been expected.

Mr. Devereux told the committee that because other companies who had bid to run the 'Work Programme' had not got previous experience of running welfare-to-work schemes, it would not have been possible to look at their previous performance. He then told the committee that most of the welfare-to-work providers who had run the previous scheme, had underperformed.

In an attempt to discover where public money paid to A4e ended up, Andrew Dutton, the chief executive of A4e, told the committee that all the companies UK turnover last year, of between £160m and £180m, came from government contracts. He also added that of the £11m paid in dividends to five A4e shareholders, 87% (£9,570,000), went to Emma Harrison. Dutton told the committee that the dividend paid to the five company shareholders reflected their personal risk and pointed out that some shareholders, had effectively "put their own homes and mortgages on the line."

Despite all this talk of personal risk, delivering welfare-to-work schemes for the government, has delivered 'shed loads of money' for Emma Harrison if not jobs for people on the 'Pathways-to-Work' programme. In 2002, this former steel workers' daughter, bought the 100 acre Thornbridge Hall in Derbyshire for £5m. As one former A4e employee once told me, it was a joke amongst company staff that the company logo, A4e, really stood for, 'All 4 Emma'.

As regards the 'Work Programme', the Government have decided that they will not release figures concerning an analysis of the scheme, until the scheme has been running for 18 months, in October. But the 'National Audit Office' claims that the Government's calculation of the number people who will obtain work, is 'over-optimistic'.

Lawyers acting for Cait Reilly, the 22-year-old geology graduate from Birmingham, -who is suing the Government because she claims that by forcing her to do unpaid work for her dole money, it breached the Human Rights Act (HRA), - have written to a number of companies demanding to know whether they intend to continue participating in the government-led 'work experience programme'. The letter which was leaked to the 'Daily Mail' newspaper, says that the "schemes are unlawful and go beyond the Government's powers." The letter also points out that Ms. Reilly, considers that the work-for-dole schemes, breached the prohibition of compulsory labour set out in the HRA. Among the firms that have been sent the letter and are getting unpaid free labour, are: Tesco, Boots, Holland & Barrett, Sainsbury's, Argos, Asda, Matalan, Primark, McDonald's and Burger King. The letter also says that the book seller 'Waterstones' have recently withdrawn from the work experience scheme.

Though the DWP say that this is an attempt to deny opportunities for young people and helping them into work, Phil Shiner, of 'Public Interest Lawyers' said:

"By filling jobs with unpaid workers, there are fewer jobs available for Britain's 2.6 million unemployed. The letter was sent to encourage employers to consider the 'moral and legal principles' of unpaid work experience. It is not a threatening letter."