The Labour MP Margaret Hodge has criticised the employment services firm A4e over the up-front payments it gives to charities when it refers jobseekers to them under the Work Programme.
Hodge was speaking yesterday at a meeting of the Public Accounts Committee, which she chairs, called to examine whether the Work Programme was offering value for money.
She told Andrew Dutton, chief executive of A4e, that his firm received a £400 "attachment fee" for each jobseeker sent to the company under the programme but passed on only £300 of this to LifeLine, the local charity it referred the jobseekers to in her constituency of Barking, east London.
"I cannot for the life of me see any value you add at all for that £100," she said. "You take it as sheer profit."
Dutton said A4e gave £350 of the £400 to its charity subcontractors and kept a £50 "management fee".
"Even if it is £350, and the charity tells me it is £300, I can’t understand what you give them for the £50," said Hodge.
Dutton said: "We take a management fee. In return, we work with employers to effectively get vacancies that are dedicated to the providers."
In response, Hodge said: "LifeLine has worked with big firms like Tesco for years. It has a far better relationship with local employers. You haven’t a clue about the local economy."
Hodge said the low level of the up-front payments meant the charity could afford just one adviser for every 120 clients. "Even if you use every minute for direct contact with clients, you’d have only 20 minutes for each client," she said. "How can you provide a quality service?"
Dutton said: "I believe they provide a high-quality service."
Hodge also criticised the Department for Work and Pensions over its decision to prohibit the publication of data about the progress of the Work Programme. She said she had been denied information about how the programme was being run in her own constituency.
Geraldine Blake, chief executive of the charity Community Links, told the meeting that there should be more transparency about the programme so that providers could compare their statistics as a way of improving their practices.
Robert Devereux, head of the DWP, told the committee that jobseekers spent two years on the Work Programme, so it was too early to publish results. "If you’re asking what I can say about the results so far, I can say precious little," he said. "We want to make sure the data passes proper statistical tests before we publish it."
Devereux said the department would publish data on the number of jobseekers who had been placed on the programme later this month.