15 May 2012

Government terminates contract with A4e

The government has ended a contract with the company A4e to help find unemployed people work after an audit found “weaknesses” in A4e’s internal mechanisms for preventing fraud.

The Department for Work and Pensions (DWP) has ended A4e’s mandatory work activity (MWA) contract to help up to 1,000 jobless people in the south east of England find work after an audit found that continuing the contract would be “too great a risk.”

The department’s audit of A4e began after allegations were raised earlier in 2012 that the company may have claimed payments for some MWA claimants, even though they had not been placed in work.

Employment minister Chris Grayling said on Tuesday:

“While the team found no evidence of fraud, it identified significant weaknesses in A4e’s internal controls on the mandatory work activity contract in the south east. The documentation supporting payments was seriously inadequate, and in a small number the claim was erroneous. There was also a high incidence of non-compliance with other relevant guidance (including A4e’s own processes)”.

Shadow Work and Pensions Secretary Liam Byrne condemned what he called “the shambles in DWP contracts”, saying:

“The government must now stop hiding performance information about the rest of its giant private sector contracts and publish so that Parliament can see whether public money is being well spent.”

More contracts

As the prime contractor for the delivery of MWA in the south east, A4e was responsible for helping jobseeker’s allowance claimants in Hampshire, Isle of Wight, Surrey, Sussex, Thames Valley, Bedfordshire, Buckinghamshire and Oxfordshire. Targeted at claimants deemed most in need of support, participation in the scheme is mandatory and there can be sanctions against those who fail to take part.

Mr Grayling said that contingency plans were in place to ensure continuity of support for participants. This was the smallest of the 12 contracts that A4e held with the DWP. The remaining 11 include some to tackle long-term unemployment under the Work Programme.

Read more: Emma Harrison quits as boss of welfare-to-work firm

Mr Grayling said that government had made clear to A4e “that we continue to require the highest standards of governance in relation to all their other contracts” and that all other providers had also been reminded of their obligations in this regard.

A4e chief executive Andrew Dutton said:

“Our immediate task is to further enhance our controls to cement our position as a trusted provider of front line public services. The findings also vindicate the hard work our 3,500 staff do – day in, day out. All over the country we’re helping tens of thousands of people into training and work, knowing we have in place robust levels of quality and assurance. As a company, I recognise that we haven’t got it right all of the time, but we are committed to taking responsibility for our mistakes and remedying them.

The company said that the problems with the MWA contract related to a period when administrative processes had been under strain due to an unexpectedly high volume of work.


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