Chris Grayling is relying heavily on "benefit-busting" firms running his Work Programme to cut unemployment.

He relies on them so much that when gave a high-profile speech on unemployment in April, he was actually hosted by one such firm called Ingeus.

The press happily and widely reported Grayling's daft catchphrases in the speech about "hiring hoodies" and the dangerous "Polly Toynbee left."

By ignoring the Ingeus logo behind the minister, they missed the story of poor performance and profiteering in Grayling's Work Programme.

Ingeus has a place in my series Firms-which-squeeze-millions-from- the-government-to-help-the-unemployed-but-mostly-help-themselves.

The company has experienced a spectacular rise thanks entirely to government "benefit-busting" contracts.

In 2003 Ingeus UK's turnover running "job clubs" and other government schemes for the unemployed was £4 million.

Its current UK turnover is £74m. UK profits zoomed from under £2m to over £14m in the same period.

Now, thanks to Grayling, Ingeus is getting a whole lot more money. He gave Ingeus seven contracts to run his Work Programme - two more than its better-known competitor A4E. These seven contracts are worth a staggering £773m.

Speaking from the Ingeus platform, Grayling said: "I would describe the Work Programme as a giant employment dating service." But was getting in bed with Ingeus a good idea?

Under the last Labour government, Ofsted was hired to inspect "benefit-busting" firms.

Five out of six reports into its schemes, published between 2008 and 2010, said Ingeus had "inadequate" outcomes - that is, Ingeus was inadequate at finding people jobs. Only one scheme was marked "good."

So Grayling wants to give a company that is officially rarely "good" three-quarters of a billion pounds.

Grayling and his boss Iain Duncan Smith have found a solution to the problem of bad Ofsted reports - they have stopped Ofsted inspecting the Work Programme.

Reading the Ofsted report on Ingeus's central London Pathways to Work contract makes the firm sound a lot more like Pauline Campbell-Jones and her job club in The League of Gentlemen than Channel 4's Fairy Jobmother.

Pathways was a scheme to help disabled unemployed people into work. Generally, jobcentres outperformed private contractors on the scheme.

In Ingeus's case, the reasons seem obvious. Inspectors found that "the delivery of information is over-reliant on trainer-led presentations and is often uninspiring."

Ingeus's website promises that its approach is "totally life-changing" for the unemployed, but the inspectors found they were totally penny-pinching.

They said: "There was insufficient access to computers, which they regularly require for jobsearch activities. They often have to wait for long periods to access them.

"The job station is not effectively managed to ensure equality of access to computers."

Ingeus promises "a tailored plan that leads towards finding the right job for you."

But the inspectors found Ingeus could not deal with people with genuine barriers to work.

They reported: "Although advisers discuss participants' health conditions, they do not adequately identify or plan for how these can be overcome to aid progression into employment."

Ingeus's competitor A4E was hit hard by accusations that the firm had cheated on government schemes.

The Department for Work and Pensions refuses to say which other firms have been forced to pay back money wrongly claimed on "work schemes."

But it is very likely that Ingeus is on the secret list of fiddlers, because in its native Australia the firm was caught cheating in exactly this way.

Ingeus is owned by Therese Rein, wife of former Australian prime minister Kevin Rudd.

She built the business on government contracts Down Under, but was forced to sell off the Australian arm of the business in 2007 when company scandals embarrassed her husband.

In 2007 one of her staff said he was sacked after refusing to claim government money for unemployed people who had found jobs without her firm's help.

Former employee Bill Wagner told Australian newspaper The Age: "I didn't go along with the way they wanted me to do things, like lodge the claims which were shonky" [Australian for "dodgy"].

Rein admitted internal audits found "shonky" claims for A$300,000 which her company had to repay to the government.

This did not discourage Grayling, who modelled his Work Programme on Australia's privatised scheme, and then hired Ingeus to run a quarter of the programme.

Rein still owns 50 per cent of the British Ingeus business. The other half is owned by accountants Deloitte.

The firm may not help the unemployed much, but it has made her very rich. This January she took over £3m in dividends from Ingeus.

Our taxes whizz past the unemployed, doing them little good, before they pay for her fortune.

Ed Miliband made a short step away from the don't-be-mean-to-the-City stance of Labour's economics team.

Chuka Umunna is busy praising Bob Diamond. Ed Balls wants to imprison Labour in the barely there "reforms" of the Vickers committee on banking.

But Miliband called for breaking up the big banks. This is basically a free-market policy to take on banking oligopolies.

If banks are broken up into smaller competitive groups, the theory goes, they won't be able to play the "too big to fail" blackmail and demand: "Bail me out, or the economy gets it." I am glad Miliband made this short step, but we are way past free-market solutions.

We have already nationalised the biggest banks. As we own them, we should make them act like public utilities.

We could turn publicly owned banks into investment banks for business and low-cost utility banks for individuals.

It has been done before. Investment giant 3i was founded as a succesful state-backed finance bank.

And Post Office Girobank introduced the most advanced, computerised personal banking of its time.

Both were succesful and privatised, while RBS was a disaster and nationalised.

It is a sign of how behind the curve Labour is on banking that Vince Cable has been calling for RBS to be fully nationalised and turned into a state-run investment bank while Labour has been silent.

The coalition is beginning to break apart. It would be a tragedy if Labour returned to power with a banking policy to the right of some members of the current government.

Morning Star website, 9 August 2012