Posts Tagged ‘National Audit Office’

Vox Political on Private Healthcare Overcharging the NHS

January 27, 2015

Rapacious Quack

18th Century Satirical Print: The Rapacious Quack. It depicts a poor family at the mercy of a doctor, who has taken away a flitch of bacon in lieu of unpaid fees. Its caption reads
‘The Rapacious Quack quite vext to find,
His patient poor, and so forsaken
A thought soon sprung up in his mind
To take away a piece of bacon.’
Which just about describes the grasping attitude of the private healthcare firms mentioned in the report.

Earlier this evening I blogged a piece on Mike’s story over at Vox Political on Ed Miliband’s promise to rebuild and strengthen the NHS. The piece is Will voters support Labour’s vision for the NHS? and it’s at http://voxpoliticalonline.com/2015/01/27/will-voters-support-labours-vision-for-the-nhs/. It offers hope for an NHS decimated by the Tories, but also by Blair and Brown.

Mike also wonders in the piece whether Alan Milburn, Blair’s former health secretary, is really a member of the Labour party, or a Tory, who has worked his way into Labour to undermine it. He isn’t the only one. A few weeks ago, Johnny Void pointed out how one of the authors of the Archbishop of Canterbury’s report suggesting the establishment of a national network of food banks was Frank Field, and made the same comments about him. Field is notorious for recommending further cuts to the welfare state to encourage unemployed hoi polloi to find work. And it isn’t only his critics, who have suggested he should join the Tories. He also has admirers within that party, who’ve actually made the invitation. The politically Conservative Cranmer blog actually invited Field to cross the floor and join the Tories.

And the same comments could have been made about much of the New Labour leadership. Remember the computer programme back in the 1990s that made anagrams from politicians’ names, supposedly revealing their real character? Michael Portillo was ‘a cool, limp Hitler’. Blair came out as ‘I am Tory Plan B’. Lobster compared Blair to Ted Heath. Both were men leading the wrong parties. Giles Brandreth, who served on John Major’s Tory cabinet in the 1990s, on Have I Got News For You described the Blairs, both Tony and Cherie, as natural Tories. They were, and they similarly pursued a policy of privatising the NHS piecemeal.

In the first few years of this century Patricia Hewitt wanted to sell of the £64bn commissioning and supply arm of the NHS, but ended up having to reject the plan, claiming it was mistaken. She therefore just privatised hospital management. And one of the brilliant ideas of Blair’s administration was the inclusion of private healthcare companies to pick up work that could not be done by an overstretched NHS. Who was the brains behind this, ahem, operation?

Alan Milburn.

And in 2009 Private Eye carried a story about an independent report that concluded the private healthcare providers were overcharging the NHS, including billing for work they did not carry out. The article was in their edition for the 15th – 30th May. Here it is.

NHS Plc.
ISTCs: A Crying Sham

Another crumbling New Labour initiative, independent sector treatment centres (ISTCs) for NHS operations, has ben exposed as a shambolic waste of money.

ISTCs were supposed to provide low-cost operations to an overstretched NHS. But the have long been suspected of creaming off the most lucrative ones under favourable contracts without providing the quality to be found in the NHS.

A 2006 parliamentary report questioned their value for money and asked the National Audit Office to look into it. Several billions of pounds of public money were at stake, but the audit body has oddly shied away from the subject despite reportedly expressing some concern over the ISTCs’ performance and £100m+ procurement costs 18 months ago.

Now academics Allyson Pollock and Graham Kirkwood at Edinburgh University have obtained the contract for one ISTC under Scottish freedom of information laws (contracts in England remain confidential). This shows that the NHS in Tayside paid an ISTC run by Amicus Healthcare – a joint venture of private equity firm Apax and South Africa’s Netcare – for 90 percent of referrals even though the centre only performed 32 percent of them. The academics estimate that Tayside’s overpayments could be dwarfed by those across England, where the NHS could have been stung by up to £927m for operations not performed.

The £5bn ISTC programme was pushed through by the Department of Health’s commercial directorate, set up in 2003 by the then health secretary, Alan Milburn, now earning £30k a year from the private equity firm Bridgepoint that owns ISTCs through Alliance Medical. The directorate was run by American Ken Anderson (since decamped to Swiss bank UBS’s private health investments) and was exposed by the Eye two years ago as home to 220 consultants on an average £238k a year, much channelled through tax-efficient service companies. It has since been quietly disbanded without ever having faced the scrutiny it warranted.

This effectively explains why Milburn was so keen to pour scorn on Miliband’s plans for the NHS: he’s working for a private equity firm that will lose work in that area if Miliband starts to take seriously the NHS’ commitment to providing free state medicine.

It also shows how better governed Scotland is than England. The two academics are able to get details like this through the Scots freedom of information act, which is denied to citizens south of the Border.

As for Amicus Healthcare, I remember Amicus as the American rival to Hammer films way back in the 1970s. Although American, they used much of the same actors and production staff. Sadly, Hammer and Amicus passed away, though the horror continues under the Amicus name.

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From 2012: Private Eye on Fraud by Workfare Company

January 21, 2015

This Sunday, 18th January, I reposted an article from Glynis Millward’s blog, reporting the trial and conviction of several A4E employees for fraud. They had been falsifying the numbers of unemployed people the company had helped back into work, in order to get money under the government’s ‘payment by results’ scheme. Although noteworthy, it wasn’t the first time a workfare company had committed such fraud. Johnny Void has also blogged about similar abuse of the system by the workfare companies. And three years ago, Private Eye reported a similar case of what may have been fraud by Working Links in their edition for the 18th -31st May 2012. The article ran:

Workfare
The Links Effect

“Benefit-busting contractor” contractor Working Links tried to claim government cash for helping people into work when the “clients” couldn’t be traced, were still receiving Jobseekers Allowance or were actually helped by rival “workfare” companies.

The company also made several duplicate claims, asking to be paid twice for helping the same person, according to internal papers passed to the Eye. The documents, which cover Working Links’ £5m-plus contract for work on the New Deal for Disabled People in 2007-8, were found in a disused desk on a rubbish tip.

Working Links, one of the UK’s largest “benefit-busters”, had contracts to encourage incapacity benefit claimants back into work through coaching, interview advice and other “job club” activities. It was paid around £300 for each unemployed “client” and received bonuses of more than £1,000 for each one getting a part-time job and nearly £3,000 if they found full-time work.

The files include monthly invoices from Working Links to the Department for Work and Pensions (DWP) ranging from £400,000 to £1m. The DWP rejected up to £20,000 a time on many invoices because of multiple errors. The DWP did not investigate the false claims nor treat them as fraud, and the files do not show these were deliberate errors. However, they do show that Working Links was more enthusiastic about claiming cash from the government than it was about keeping accurate records. Separately, DWP “compliance visits” have found systematic overclaiming in some Working Links offices. (See Eye 1311).

Overclaiming appears rife among workfare contractors. Emails between the DWP and the National Audit Office obtained under freedom of information by the Eye show that “benefit-busting” firms made more than 10,000 false claims on the “New Deal” employment scheme in 2010-11. In the emails, the DWP told the auditors about failures in checking that claimants the contractors claimed to have helped had actually signed off benefits. The DWP describes “30 percent failing the check and around 10 percent ultimately unvalidated”.

A third of claims by contractors are initially questioned. Most are cleared up, but the remaining 10 percent are false. The DWP found that of 104,767 invoices from New Deal contractors, 10,462 failed the off-benefit check and remain “unpaid”. This means that companies like Working Links and the giant A4E asked for to £30m they were not due. The DWP did not pay the cash, but the fact that it did not investigate the false claims further shows a liberal attitude to the contractors.

Working Links, part-owned by temp agency Manpower and consultant CapGemini, has many other government contracts, including £300m for running the new Work Programme in Wales, Scotland and the South West.

This is a shocking statistic, but it isn’t really surprising. I posted up another piece by Private Eye yesterday reporting on the conclusions of the NAO several years ago that the welfare-to-work scheme would fail, and would need bailing out. Moreover, as Johnny Void has repeatedly blogged, the workfare system is so flawed that you are far more likely to get a job through your own efforts than from one of the workfare companies.

The entire scheme is set up to encourage fraud, and based on the exploitation of the unpaid labour of the jobless themselves. It should be totally discontinued.

From 2012: Private Eye on the Work Programme’s Future Failure

January 20, 2015

In their issue for the 10th -23rd February 2012, Private Eye discussed a government report predicting that the work programme would fail, and put forward ways in which it could be bailed out. The article ran:

Welfare reform
Nice Work

The National Audit Office (NAO) report on the coalition’s £5bn Work Programme (under which private contractors are paid to get people off benefits and into work) predicts that the scheme will fail. But it also suggests how the firms who run it might be bailed out.

The programme, the brainchild of work and pensions secretary Iain Duncan Smith, is meant to avoid the “limited success” and “disappointing … performance” of past initiative thanks to payment-by-results. Contractors fund the scheme up front (hence the dominance of well-capitalised private firms in the programme) and are only pa9id when their clients find and keep a job.

The NAO thinks there is a significant risk, however, that Duncan Smith’s target of 40 percent of the mainstream unemployed finding work under the scheme is “over optimistic”. History, it says, suggests 26 percent is a more realistic figure. Payment-by-results targets that are too optimistic mean that: “It is possible that one or more providers will get into serious financial difficulty during the term of the contract.”

If firms do start going bust Because they don’t reach targets, what are the options? Most, according to the NAO, involve some form of bail-out. “It is likely that providers will seek to recalibrate the prices and other contract conditions during the lifetime of the contracts,” it predicts. In other words, the big contractors will try to renegotiate easier deals. Though the NAO says the government must be “robust in its negotiations and maintain competitive tension between providers”, in the past the Department for Work and Pensions has helped by offering better terms and referring “more easy-to-help participants”.

The second option is to let a provider go bust and give its contract to another firm. But the department has a limited number to choose from and, as the NAO says, “the rates offered to the new provider will be subject to renegotiation”. Easier terms, in other words.

The last option is for the department to bring the work in-house; but with all its welfare-to-work eggs in the private contractor basked, it doesn’t have the machinery to do this.

Recession and rising unemployment make failure by a contractor even more likely; and the auditors warn that while the government “has plans for dealing with a single prime contractor failing, it has not developed plans for dealing with multiple providers failing within and across geographical areas.”

Whatever happens to the jobless, some people cannot lose, however. As the recent accounts of Work Programme contractor A4E show, the firm lived up to its slogan of “improving people’s lives” by giving outgoing chief executive Bob Martin a £1m exit bonus on top of his £300,000 salary.A4E boss Emma Harrison did even better. The firm increased dividend payments by 400 percent, paying £10m to shareholders in 2011. As she owns 85 percent of the shares, most of this went into her pocket.

Subsequent events have borne this article out. Johnny Void in particular has published numerous articles describing how the workfare schemes have comprehensively failed. Mr Void has shown that many firms have effectively falsified their successes by only taking on people, who could easily be found a job, precisely as predict in this article.
In fact, you are far more likely to get a job by simply looking for one yourself, than by going on workfare.

The article shows further that the NAO predicted all along that the scheme would fail, and the government would have to bail it out for it to stand a chance of working.

And the case of A4E and its bosses, Bob Martin and Emma Harrison follow numerous other case where the chiefs of firms that have massively failed in their hype, have awarded themselves massive bonuses and pay. Well, the trend was set with the banks, and where they led, other industries followed. Private industry flourishes, and only the taxpayer and the unemployed get exploited.

The Floods and Cameron’s Lies

February 12, 2014

somersetfloods1

I’ve put up a couple of posts recently on the lies David Cameron has told about the floods. In the first post I questioned Cameron’s assertion that the Coalition had spent more on flood defences than the Labour Party. The second post I put up was reblogged from Pride’s Purge, which provided the figures showing that the Coalition was spending far less on the floods than Labour. Further confirmation of this comes from this article from Private Eye’s issue for 20th to 23rd January 2014:

‘”There are a lot of flood defences being built,” claimed David Cameron outside a flooded village pub in Yalding, Kent, at the end of December. “But we have got to do more.”

Days later environment secretary Owen Paterson insisted that cuts to 550 flood prevention, warning and recovery jobs at the Environment Agency (EA) – splashed on by the Telegraph last week, though Eye readers read about them last year – are somehow being made “with the intention of protecting frontline services concerned with floods.” “This government is spending more than all preceding governments on flood defences,” he added. It should, but it isn’t.

Things were already bad under Labour. In 2007, official figures showed the EA missed its target of keeping just 63 percent of England’s existing flood defences up to scratch (Eye 1187); and the National Audit Office said it would take an extra $150m a year just to reach the target. But since the coalition came to power in 2010, far from tackling the flood defence backlog it has actually spent even less on flood defences.

A briefing paper last year found a 6 percent overall fall in central government funding for flood and coastal defence during the 2011-15 spending review period. Even the extra £120m announced in November 2012 – after it was revealed that 294 flood defence schemes across England were on hold after never receiving funding they’d been promised – didn’t bring spending back up to even 2010 levels.

But never mind! Government had a new wheeze to encourage local and private funding of flood defence through “Flood and Coastal Resilience Partnership Funding”. This, claimed the Department for Environment, Food and Rural Affairs, would enable “more local choice” and “encourage innovative, cost-effective options”. Alas, as the Local Government Association told parliament last year: “securing private sector contributions in the current economic climate is particularly challenging.” By 2015, just £38m for flood defence is expected to be raised from private sources – and the likely funders are firms who want to develop on flood plains.

Extra cash is available from taxpayers via the government’s “Growing Places Fund” – which is specifically for infrastructure, such as transport or flood defence, which will “unlock jobs and housing “developments. So the only way to get flood defence funded is … to build yet more on land at risk of flooding! Clever, eh?’

This piece not only shows that Cameron has been lying once again – and one wonders if anyone at the Coalition has ever, in their entire lives, told anyone the truth – but it’s also par for the course for the lamentable performance of Thatcher’s programme of wholesale privatisation. Thatcher, you will remember, was insistent that private industry would give you more choice, as well as be more efficient than state-managed monopolies and concerns. Hence the Coalition’s boast that their Flood and Coastal Resilience Partnership Funding would provide ‘more local choice’. Well, it has been demonstrably less efficient and effective at raising money for flood defences than traditional forms of state taxation, borrowing and allocation of funds. As for choice, that hasn’t noticeably been one of the Partnership’s priorities either. None of the poor souls now being flooded out of their homes and businesses in Somerset, Berkshire and elsewhere chose to be so, and the government has gone back to using state spending to combat the floods. So that’s another resounding triumph for private industry then.

Or at least it will be the next time Cameron and his cabinet start telling lies about it.