£1.4m pa. Emma making fortune cutting Britons off benefits

Tony Gosling tony at cultureshop.org.uk
Mon Apr 4 00:43:36 BST 2011

£1.4m-a-year welfare entrepreneur picked by 
Cameron to get Britons off benefits and into work

As Emma Harrison's company adds five new 
taxpayer-funded welfare contracts to its empire, 
unions attack 'obscene' public payouts

Toby Helm and Daniel Boffey - The Observer, Sunday 3 April 2011


Emma Harrison: Her company's profits increased 
80%. Photograph: Christopher Thomond for the Guardian

The woman appointed by David Cameron to help 
troubled families get off benefits and into work 
has a joint income with her husband estimated at 
more than £1.4m after building a business empire 
based on lucrative "welfare to work" contracts with government.

Emma Harrison, the chairman of A4e (Action for 
Employment), was celebrating another success that 
is likely to boost the company's profits, after 
it won five out of 40 new welfare contracts from 
the Department for Work and Pensions. The 40 
contracts, worth an estimated £3bn-£5bn in total, 
are part of the coalition's new work programme, 
under which private companies will be paid by 
results for getting jobless people into work.

The news about the Harrisons' income will fuel a 
growing row over the extent to which the private 
sector is set to benefit increasingly from the 
prime minister's determination to widen its role 
in the provision of public services.

It will also stoke controversy over pay at a time 
when ministers are determined to be seen to be 
clamping down on what they say are unjustifiably 
high salaries in the public sector, such as those 
of council chief executives and others earning more than £100,000.

It emerged last week that another major player in 
the welfare to work industry, Serco, which has 
won two more contracts, had awarded its top 
executives bumper pay packets. Chris Hyman, 
Serco's chief executive, enjoyed an 18% rise to 
£1.86m, while Andrew Jennings, the finance 
director, received an increase of 7% to £948,295. 
The company's diverse range of contracts includes 
running several prisons, London's bicycle hire 
scheme and the Docklands Light Railway.

In a recently published report for the 
government, Observer columnist Will Hutton called 
for a fair pay code to be extended into the 
public services industry. He also called for 
details on justification of an executive's annual 
salary to be published and for more employees to 
become involved in companies' remuneration committees.

The report, which is being considered at the 
highest levels of government, said remuneration 
"must be brought back into the context of the pay 
of the rest of the workforce through the 
disclosure of the ratio of top to median pay".

Union leaders described the salaries earned by 
private entrepreneurs whose businesses were 
taking on government contracts as "obscene". They 
said private firms were queueing up to reap 
massive rewards from plans to open up the 
National Health Service to "any willing provider".

A4e's latest accounts show that Harrison, who 
lives with her husband in Thornbridge Hall, a 
12th-century stately home in the heart of the 
Peak District, has an 85.5% shareholding in the 
Sheffield-based company. She receives a salary of 
£365,000 a year. On top of this, last year she 
and her husband received an additional £462,000 
from A4e for the company's use of her home for 
conferences and administrative work.

Her husband received an additional £626,856 for 
the lease of another property to A4e.

Last December Cameron offered Harrison a role 
championing government efforts to help troubled 
families get back on their feet. "Emma and others 
will be helping to pioneer a new way of doing 
things: less bureaucratic, less impersonal, more 
human, more effective," the prime minister said. 
"Above all, treating the whole family as a unit, 
not just a collection of individuals.

"Now our side of the bargain of this is we will 
strip away the bureaucracy and give her, and the 
many others we hope will follow her lead, the 
freedom that you need to make a difference.

"Your side of the bargain, her side of the 
bargain, is to get these families back on their 
feet and, crucially back into work with all the 
dignity and self-esteem that that can bring. I 
really believe we can make a difference in this way."

Ministers believe the new work programme, which 
is due to start this summer, will be more 
successful in getting people off benefits because 
the private sector is expected to bring greater rigour to the system.

According to A4e's company accounts, the firm 
provides the majority of its services to 
government agencies and departments. Its turnover 
hit £190,990,000 and its profit increased 80% to 
£6.2m in the last financial year.

The company's accounts make clear that the 
current economic climate presents further 
opportunities. "We believe that pressure on 
public sector spending will further drive the 
need for governments to outsource specific areas 
to the private sector, which is an opportunity for us," it states.

Mark Serwotka, general secretary of the public 
and commercial services union PCS, said: "It's 
obscene that the bosses of private companies that 
get up to half their total revenue from the 
taxpayer are paid such astronomical salaries, and 
it ought to be a national scandal.

"Instead, the government has confirmed in the 
last few days, for example, that it wants to 
extend the influence of the private sector in our 
prison system by shamefully allowing them to make 
massive profits out of locking people up."

Dave Prentis, general secretary of the public 
services union Unison, said he feared that 
reforms of the NHS would lead to the same 
companies moving in to make big profits. "Health 
is not and should not be allowed to become a market commodity."

A spokesman for A4e said the £462,000 paid to 
Harrison and her husband for the use of 
Thornbridge Hall last year was part of a leasing 
arrangement covering several years. The spokesman 
added: "Over the past 20 years Emma Harrison has 
grown A4e from a small, Sheffield-based training 
business to one of the largest social purpose 
companies in the UK, helping unemployed people back into work.

"This has been a long journey, at times involving 
significant personal financial risk." 
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