22 Feb 2012

Arrests made at government contractor A4e

Social Affairs Editor and Presenter

A4e, the company at the heart of the Government’s flagship Work Programme, has been forced to pay back public money five times after a series of investigations into allegations of fraud.

Arrests made at government contractor A4e (R)

Details of the investigations – nine in all, dating back to 2005 – emerged today after it was revealed that four former A4e employees were arrested last week.

This afternoon the company insisted that none of the allegations related to contracts it holds for work it carries out on behalf of the Government.

In a statement posted on its website, A4e said: “we have an internal audit team which regularly monitors our work and that of our subcontractors. On top of that, we are subject to rigorous external audits.” It added that “the current Work Programme eliminates any opportunity for malpractice because it is computer-based and payment is on results.”

But the chair of the Public Affairs Committee, Margaret Hodge, called on the government to suspend all contracts with the company, currently thought to be worth around £180m.

A4e is no stranger to publicity. It’s founder and main shareholder, Emma Harrison, has grown into something akin to a miracleworker in the world of finding work for the unemployed.

She’s been courted by both Labour and the Conservatives. A4e was the single biggest supplier of Labour’s Flexible New Deal, a precursor to the Work Programme.

Then in 2010 David Cameron made Ms Harrison his Families Champion, calling her “inspirational” and promoting her as as someone who would transform the lives of workless families.

She has also been the star of Channel 4’s Make me a Million and Benefit Busters, as well as BBC 1’s Famous, Rich and Jobless.

But the publicity of the past few days has been much less favourable.

Earlier this month the Public Accounts Committee heard she’d paid herself a dividend of £8.6 million pounds. And much has been made of her lavish lifestyle; she lives in a grade II listed building which includes a nightclub, a pool and 100 acres of land.

On the website her philosophy is summed up as: Doing Well By Doing Good.

Her critics say she is certainly doing well herself, but what’s the evidence that her company is doing good: how many people is it getting back into work?

The problem is the Government is currently refusing to release details of how many people have actually found work thanks to the efforts of providers like A4e and the Work Programme.

Those figures won’t come out until much later this year. But both the National Audit Office and the Social Market Foundation insist that under current projections none of the bold targets set by the Government will be met.

And for A4e there’s a further question mark over their previous performance. The NAO claimed A4e only placed 9 per cent of its jobseekers in work through the old Pathways to Work Programme. That’s a figure disputed by the company, but it all makes uncomfortable reading for A4e and raises new questions about how it managed to win lucrative contracts for the coalition government’s Work Programme given its record and the known investigations into fraudulent activity.

Read more: The FactCheck team investigate the government’s Work Programme

The government told Channel 4 News tonight that under European legislation all bids had to be viewed from a level playing field therefore A4e’s history could not be taken into account. It also said there was no reason why the company couldn’t bid for new contracts with the Government to help young unemployed people back into work.

And that will not be well received by Labour MP Fiona Mactaggart . She told Channel 4 News that she has had serious concerns about the culture at the company since 2010.

“This [ the recent arrests] isn’t just an isolated example of frontline employees behaving in a rogue way,” she said. Since making her concerns public, Ms Mactaggart told Channel 4 News that she has been approched by A4e employees and subcontrators who have made various claims of fraud and malpractice.

The company gets paid around £400 for each successful jobseeker it places in employment for at least three months and a £1,200 fee for placing someone for 26 weeks, continuously or short-term.

Ms Mactaggart told Channel 4 News that the performance-related pay structure encourages corrupt practices, “and the government is using our money to pay for it”. She is calling for the Serious Fraud Office to investigate.


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