Bosses snouts in the trough

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NO COHSCRIPTIOH Issue no.17 out now: This month's Class Fighter's full page on the government's Youth Training Scheme Includes an interview with John O'Brien, a 'trainee' from Peckham, and coverage of how the government wants to con-i Grahame Smallwood and Peter Crawshaw write about how their Youth CND group in Scarborough is getting on, and Jimi Somerville of the Bronski Beat talks to us about. his experience of the Warrington picket line: "They PRIVATE training agencies, receiving huge amounts of public money, have been used to effectively "privatise' the government Youth Training Scheme, taking work away from further education colleges.

Many of these agencies are clearly not fit to be put in charge of the training of young people.

A report drawn up by the college lecturers' union, NATFHE, brilliantly exposes the way in which private training agencies are milking YTS for funds, cutting corners on training, and exploiting trainees.

When YTS was first announced, the plan was that 70% of places should be with 'Mode A" schemes — where an employer, local authority or consortium of employers agree with the MSC to arrange a complete programme of work experience, training and education.

The remaining places were to be provided by 'Mode B" schemes, where the MSC itself acts as managing agent and contracts out the training programme to voluntary agencies, community programmes, colleges, etc.

However, the recession meant that employers were in no mood to take on large numbers of trainees, and there was a massive shortfall of genuine "employer-led" Mode A schemes. This left a gap that was filled by the private training agencies — commercial outfits who take on trainees for a year-long training "package"

They provide "off-the-job" training only and sub-contract to outside employers who act as sponsors for the ninemonths work experience.

In Birmingham and Solihull (the area covered in detail by the NATFHE report) 56% of Mode A places and 42% of all places are with private training agencies.

A Mode A private training agency will receive money in three ways for each trainee taken on: a fee of £100 for acting as the Managing Agent, £550 for supplying the off-thejob training and £1,300 towards the trainee' s allowance.

The NATFHE report proves that "no systematic monitoring or audit of these agencies' accounts or training qualifications is made they are in receipt of public money.

Of the 30 private training agencies in the Birmingham and Solihull area, a substantial number are breaking the law - "a strange example to be set by agencies teaching Life and Social Skills to the young people they are training, comments NATHE.

Two of these 30 agencies had serious queries regarding their accounts raised by their auditors. Seven had not filed up to date accounts and were therefore breaking the law. Of the remainder, one had filed incomplete accounts, three were not registered as companies, and seven had been formed within the last two years and so were not required to have filed accounts.

One agency told the Area Manpower Board (the local body of the MSC responsible for approving and overseeing schemes) that it had been training for six times as long as its company records indicated.

Another seriously misled the Board about the number of other towns and cities it had run schemes in when seeking approval. A third agency had become such bad payers of bills that one local further education college was informally advised not to provide any of its off-the-job training.

The report looks in detail at ADM Limited, the largest private training agency in the Birmingham/Solihull area.

On May 24, 1983 the Area Manpower Board approved the first 300 places of a 500 place Youth Training Scheme. With that approval came the potential for ADM to receive £975,000 of public money. The report comments, 'this money was granted to provide quality training and the chance of a future to 500 16 year olds, but clearly came at a fortuitous moment for the survival of the company.

Five days before its approval. ADM registered their Annual Return with Companies House. This showed an adverse relationship between assets and liabilities. Furthermore, the salaries of the directors amounted to 9% of the total turnover.

The auditors' report includes the following:

•The financial statements have been prepared _ on a going concern basis. In view of the loss that has been susThe Tory government claimed that its Youth Training Scheme would give a real chance to 16 to 18 year olds. In prac tice it is a year of cheap labour for the youth, and a honeypot for unscrupulous bosses.

Jim Denham reports. tained we are unable to confirm that this is the most appropriate basis.

The report comments:

'In the restrained terminology of accountancy these statements are danger signals which appear to have gone unheeded.

To make a profit out of a funding formula that was never intended even to cover the full cost to employers, the private agencies can only spend about half the amount per trainee that it costs a college. To do this they have to pay their staff considerably less. work them harder and cut corners on training and work experience.

ADM 's method of obtaining work experience for their trainees is to sent out a 'mail shot" to employers ("sponsors"), stressing that 'there is no cost to the sponsor for having a trainee on their premises.

As most PIAs provide 'offthe-job training" only, finding employers to act as sponsors for the nine-month work experience is a major problem at a time of recession.

Often trainees have ended up with exactly the type of sponsor YTS was intended to eliminate - small, non-union workshops and offices which are difficult to monitor and where the problems of job substitution, inadequate training and dangerous conditions are most likely to arise.

Pitman's Training Services are one of the largest PTAs in the country. They are proud of their "international reputation and years of training experiencf.:

The report does not accuse Pitman's of any legal or financial irregularities — they are one of the reputable PTAs. Nonetheless, the trainees who began their YTS with Pitman's in Birmingham in June 1983, were so appalled by their treatment that in October they script youth onto the schemes.

thought I was a wee boy" TS!

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Socialist Organiser, February Page 6