Maximus are back in the news because the government have given them a £500 million contract for "Work Capability Assessments", taking over the job of harrassing the sick from Atos.
So I am republishing this piece that I wrote in the Morning Star on July 12th 2012
Maximus
Solomon Hughes
Morning Star 12th July 2012
The
government's work programme is failing. Currently only 24 per cent of
those on the scheme are leaving benefits, and some of those are being
forced out without even getting jobs. This is below government estimates
for the number who would find work without the scheme - the programme
is literally worse than nothing. There are two problems with Iain Duncan
Smith's £5 billion plan to "help" the unemployed by hiring big
"benefit-busting" contractors. First, it's the wrong scheme. Second,
he's got the wrong people running it. The work programme is based on the
idea that there is something wrong with the unemployed - maybe they
can't find jobs because they have forgotten how to get out of bed. But
rising unemployment is mostly caused by lack of jobs, not issues with
the unemployed. Investing £5bn on schemes creating actual jobs - like
housebuilding - would cut unemployment by far more. There is a case at
the margins for an employability programme - some people really do get
knocked out of the labour market and need help to get back in. Training,
coaching and some job subsidies can help. But Duncan Smith has hired
the wrong people to help the unemployed. The big work programme
contractors are almost universally better at helping themselves to
profits than helping the unemployed. All studies so far conducted show
that public-sector Jobcentre staff do a better job. I've been writing
about bogus "benefit-busting" firms A4e and Working Links for a few
years. But there are plenty of firms you've never heard of that squeeze
millions from the government to help the unemployed but only help
themselves. Enough in fact for me to run a short series on the subject.
This week, step forward Maximus. Maximus
has a low profile, a name like a sex aid and contracts worth £176
million running the work programme in west London and south-east
England. It's probably just as well that this US firm is unknown in
Britain, as its record across the pond includes fraud and failure on a
major scale. In 2007 Maximus
paid a $30.5m (£20m) fine in the US over charges that it had cheated
Medicaid, the state-funded health service for the poor, by making tens
of thousands of false claims. The fraud took place in a
"payment-by-results" contract. Washington state had hired Maximus to make savings in its spending - Maximus and the state shared the money claimed from the national Medicaid system for children in foster care. But Maximus,
in a plan called "operation lightning rod," increased its income by
making claims for children who had not received medical care. After the
fraud was uncovered Maximus
said it would not sign any more "contingency-based contracts" where it
is paid from "savings" in state expenditure. But Duncan Smith's
"payment-by-results" work programme is just such a "contingency based
contract." Also in 2007 the state of Connecticut sued Maximus over the "abject failure" of its computer system. Maximus was supposed to run a police database, including real-time police record checks. Connecticut's attorney-general said that "Maximus
minimised quality, squandering millions of taxpayer dollars and
shortchanging law enforcement agencies." He said the database could
"make a life-and-death difference to police and other law enforcers," so
the failure was unacceptable. In 2010 Maximus settled the case for $2.5m (£1.6m). Maximus's
performance over here is less dramatic, but still unimpressive. The
firm got some benefit-busting contracts from the last Labour government.
It never managed to get a "good" grade from Ofsted for these schemes.
The last full inspection by Ofsted of its "workstep" programme for the
disabled jobless in western England gave the firm the second-lowest
possible grade, "satisfactory." Inspectors noted that "the proportion of
participants leaving the programme without progressing into open
employment is high." A 2010 follow-up inspection found "insufficient
progress" on half of its targets. As the work programme fails, there are
calls to bail out the scheme with extra cash. But as Maximus's record shows, this would be throwing good money after bad.