Doing well out of welfare - how compassionate capitalism is driving Avanta

Janette Faherty is deploring today’s shallow celebrity culture. “The whole reality TV thing is awful for youngsters,” she says. It is dispiriting, she says, when faced with a teenage school-leaver, to hear them set their ambitions at being a DJ, a supermodel, or simply a “celebrity”.

If they even consider a job in business, then they have to go straight to being Branson, Sugar or some other Dragon’s Den-style TV star, with no concept of the hard graft needed to get there. “They think Richard Branson just emerged from an egg, fully formed in a fluffy jumper,” she says.

These are the difficulties of placing someone with no experience of work on the first, unglamourous step on the ladder and then equipping them with the skills to move up further in due course.

It is the job done by Avanta, where Ms Faherty is chief executive and owns a majority stake. This sometimes requires tough decisions, not least when the “client”, as she calls her charges, is not playing the game but moonlighting on the black market. In such cases, her duty is to contact their local Jobcentre and advise that their benefits should be withdrawn.

Ms Faherty has clearly come a way from her left-wing roots and a career that started doing voluntary work among women’s groups in Haringey, North London. Along the way she was able to buy for very little what had been a public sector body. She is now a businesswoman running a growing enterprise that employs 650 people and has a turnover of £45 million a year.

Avanta has helped to create almost 7,500 new businesses over the past three years. Three quarters survived into their third year, about twice the national average. Over the past six months it has equipped almost 2,000 people with additional skills to advance their prospects. Another 2,225 have come off benefits and into paid work.

“Perhaps it’s because I come from a more Fabian background,” she says. “It was never the intention of the welfare state to pay people who didn’t want to work. That’s not the best way to spend taxpayers’ money.

“I don’t think there are many parts of the country where there aren’t any jobs these days. They might not be the jobs that people want to do or people would expect to do.” In particular, jobs in the customer service sector - those in call-centres or shops, for instance, are often anathema to traditionally raised people. “They aren’t necessarily the ones people are brought up to see as classic breadwinners’ jobs.”

But she insists: “People have a right to work. That’s a left-wing view, isn’t it? I’m going back to my Marx and Engels.”

Ms Faherty’s experience of these two dates back at least to 1968, when she enrolled at the University of Manchester to read politics and history. These were the days of student radicalism. She had come from working class stock in Birkenhead, council estate bred and the first of her family to go to grammar school and to university. Her mother was a Presbyterian, and the work ethic was ingrained. She was expected to find jobs during holidays and did time on the Castrol production line.

Ms Faherty had a stab at a couple of jobs in academia, but they fell through and she “drifted into teaching”. Once her first child arrived – she has two grown-up daughters – she went into the voluntary sector. “After-school clubs, sewing groups for Bengali women where they learnt English, gardening for elderly people.”

She began working on unemployment projects for the old Manpower Services Commission. “Even these days, it’s never been bettered at getting people into jobs. The person was given to you. You had control of their benefits and their training allowance, all rolled into one. If they didn’t train up, you didn’t pay them.”

This approach, she believes, remains the best way of getting people back to work. “Where we control the money, we have exactly the same rate of achievement of job entry.”

Part of the problem, as anyone who scans the public sector job ads soon becomes aware, is the incredible proliferation of bodies involved, an alphabet soup of quangos, training councils, and local authorities. This duplication of effort would never, one suspects, survive in any profits-driven private sector area. But these are the bodies from which Faherty’s business, through competitive tendering for contracts, obtains its work.

“It is an alphabet soup,” she admits. “The way it’s operating now is dysfunctional. But I see signs that we’re bringing all those functions together.”

In 1988, after a reorganisation of the system, she was given the chance to buy the business, then known as Network Projects, for a nominal sum. “It wasn’t really worth anything at the time. The voluntary sector was very keen to get rid of the risk.” It employed about 20 people. With her former husband, the late property developer Matthew Faherty, she took £5,000 out of their savings. “We never thought it would be a £45 million business.”

Last year TNG, as it had become known, merged with a similar business, InBiz, to become Avanta as the top company. They help unemployed people find jobs, and work with employers seeking staff with particular qualifications – or none at all. They compete for work with quoted companies such as Carter & Carter, whose founder, Phillip Carter, died in a helicopter crash in May, and Serco. A stock market float “has to be one option to consider”, she says.

Ms Faherty accepts that it can be difficult to place some people in jobs. “There are people who are extremely reluctant, for a variety of reasons, to work. In some cases there are whole areas where there’s no history of working over two to three generations. You have got to start with how they get up in the morning and go to work. Some people have no reason to have an alarm clock.

“We’re not running some kind of soft regime. We say, you’re going to be here at 9 o’clock until whenever. It’s a structured work experience. The idea is to get people into the work ethic.” This could involve mentoring, in classes of up to ten, or one-to-one training.

There are schemes whereby benefits can be protected for the first six months, for example, while they start work on a trial basis. Ultimately, there is the sanction of stopping benefits for those unwilling to make the effort. “We already have that lever. We don’t talk about it a great deal.”

There are, at the last count, 2.6 million people on incapacity benefit. No one believes that all of these are genuinely incapable of entering the work-place. Ms Faherty believes that a million of them genuinely want to go back to work but are held back by lack of skills, by real but surmountable disabilities or by psychological factors such as depression. She is convinced that they can. “It’s going to happen. It’s definitely going to happen.”

For it to happen, though, plenty of work will have to go the way of Avanta and its competitors. Aren’t you in the business of, in the old song lyric, “doing well by doing good”? “It’s about wanting to do something for other people,” she insists of her decision to buy and develop the business.

But life on the breadline, forced out of benefits into a tedious, arduous job on the minimum wage is no fun, is it? Especially competing with the uncounted wave of workers from overseas, particularly Eastern Europe, whose driving ambition is to do the same?

“Every part of this country has buses. Why are we importing people from the Ukraine to drive buses in Middlesborough?” she asks. “We want people to do those sort of jobs because we don’t want to do them ourselves. You have to get a bit real about that.

“It’s about getting people into a job at entry level and then pushing them up the ladder.”

Curriculum vitae

Born 1949
Education 1968-71: student at Manchester University.
Career 1974-78: teacher, Aylward School, Edmonton.
1978-81: researcher, Unesco Project, Institute of Education, London.
1983: Researcher at Islington Council.
1983 to present: chief executive/owner, Avanta.
1988: management buyout, Avanta (then TNG).
April 2006: TNG and InBiz merge to form Avanta.