Government turns charities into multimillion-pound businesses

Publication date: Monday 03 July 2006

The Guardian (UK) Monday July 3, 2006 (by David Hencke, Westminster correspondent) reports :
The government is creating a new generation of multimillionaires and turning charities into multimillion-pound businesses by contracting out services provided by the state, a report commissioned by the Whitehall trade union the Public and Commercial Services union, reveals today.

The report, by Steve Davies, senior research fellow at Cardiff University school of social sciences, shows a swath of companies set up to provide training for disabled people, the unemployed on New Deal programmes, and young offenders are now multimillion-pound enterprises.

The top example is A4e, founded in 1991 by 42-year-old Emma Harrison, which now employs more than 1,500 people and has a turnover of £75m a year, providing training services for the government, private companies and welfare reform programmes in Israel and Poland. The company is now the largest training provider for the government's New Deal programme for the unemployed. Ms Harrison is reputed to be worth £55m and received £1.1m in dividends alone last year.

Another multimillionaire is Deborah Fern, who ran Fern Training and Development, set up in 1986 to provide training programmes for unemployed and disabled people. She sold her company to another expanding group, Carter and Carter plc, five months ago for £13.6m, taking £2.9m in shares.

Among the charities highlighted are the Shaw Trust, which provides training programmes for disabled people and has seen its income jump by £18.36m to £63.98m in the last year - with £37.5m coming from Jobcentre Plus and just £1.9m from private fundraising.

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http://society.guardian.co.uk/print/0,,329519520-106050,00.html