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GETTING RICH OFF THE POOR
Andersen Consulting
How does a private corporation make money out of welfare?
There are only a few ways to save $1 billion from the welfare system through re-engineering – here are some possibilities:
move to a self-serve telephone kiosk system where decisions are automatic and there is no discretion to make sure people get the assistance they need.
implement an incentive system where the delivery agent is rewarded by moving people off welfare. Whether the person lands a job or lands in the street is irrelevant.
Both these approaches are frightening. They will lead to serious problems for service and both will lead to massive cuts to staff. Both create systems that are easily privatized.
Andersen in Canada
THE ONTARIO CONTRACT – BUSINESS TRANSFORMATION PROJECT
Andersen Consulting, the largest consulting corporation in the world, will re-design social assistance program delivery, and ultimately the plan for social and community health services.
Andersen could earn up to $180 million over the next 6 years. The contract requires Andersen to provide advice over 4 years but share in the savings for 6 years.
If the profit based on savings relationship is the same as the New Brunswick contract, Andersen will be helping the government slash a further $1 billion out of Ontario’s welfare system.
NEW BRUNSWICK
Andersen Consulting was responsible for revamping the welfare system in New Brunswick. Hundreds of public sector jobs were lost as a result.
According to the New Brunswick NDP, the remaining workers were told they could spend no more than 4.5 minutes per month talking to each client. Anti-poverty activists claim its next to impossible to reach welfare staff on the phone.
Apparently, Andersen promised the New Brunswick government cost-savings of $17.5 million per year. The provincial auditor general was critical of circumstances of negotiating the contract and the claims the government made about savings.
Reports state that Andersen was paid between $15-$16 million to generate $80-$85 million in savings.
FEDERAL GOVERNMENT
The government has ended many of these mega projects with private consulting firms including Andersen Consulting.
The federal auditor-general has been critical of the major out-sourcing of the complete re-design of these systems. The rules for delivering these programs are very complex and change frequently, so the major design should stay in government hands.
Who is Andersen?
Andersen Worldwide is the umbrella organization for Arthur Andersen, the accountancy firm, and Andersen Consulting. Andersen Worldwide revenues have jumped from $2.8 billion in 1988 to an expected $11 billion this year according to the Financial Times. The worldwide organization has 2,700 partners.
In 1996, Arthur Andersen Consulting had revenues of $5.3 billion with offices in 47 countries and 45,000 employees. In Canada, there are 10 offices with 1,200 employees.
The management consulting firm has been involved in “re-engineering” in both the public and private sector. According to the Ontario government, Andersen has re-designed 50 social assistance delivery systems in Canada and throughout the world.
Look for more bulletins on Andersen Consulting–details on the Ontario Contract, and welfare re-vamping projects in other countries.
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