Welfare to Work

Is the Work Programme too financially risky. Social enterprise goes bankrupt

Is the Work Programme too financially risky. Social enterprise goes bankrupt

Association with A4E had been a matter of great concern to potential investors.

Eco Actif, a community interest company based in Sutton, Surrey, closed suddenly on Friday morning. The organisation provided employment support for around 500 people in the south-east of London, operating as a subcontractor in a regional supply chain headed by A4e.

Its chief executive, Amanda Palmer-Roye, said Eco-Actif had performed well in getting people into work and had a £1m order book but had been unable to raise the capital to sustain itself under the government’s payment by results system, under which firms must wait 18 months between delivery and payment.

In a letter to staff, Palmer-Roye said Eco Actif had approached both conventional banks and social finance providers for backing but had been refused on the grounds that the work programme was too high-risk and that “prime contractors are not passing sufficient funds to the ultimate delivery organisations to make sufficient surplus to finance any loan”.

Eco Actif had been signed up by three prime contractors – A4e, G4S and CDG – to provide specialist work programme support to ex-offenders. But Palmer-Roye said it had not received a single referral under these arrangements, putting its finances under further strain.

The company which manages the south-east work programme on behalf of A4e, 3SC, said it was

“obviously saddened by the demise of Eco Actif”.

Read more in the Guardian

Visit Eco Actif




  1. That was the justification for A4E’s Emma Harrison taking an £8.6 million dividend “For the risk involved” Notice now that she will not put her(Actually the taxpayers)money where her mouth is,does this infer that she has no faith in the programme that A4E was paid £300.000 by the DWP to help design?

  2. Although there are clearly some issues with the delivery of the Work Programme this example illustrates the lack of support that prime contractors have for the third sector deliverers as, given that primes will take the resultant payments for people entering employment, they should be supporting companies such as Eco Actif with up front support as this is one of the reasons government stipulated that only companies with in excess of £20m could bid for Work Programme contracts.

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