The government has cancelled a £1m contract with embattled training and welfare to work company A4e.
The move followed an audit by the Department for Work and Pensions (DWP), which discovered “significant weaknesses” in its measures to prevent fraud.
In a statement to parliament yesterday, DWP said that while it had found “no evidence of fraud”, it was “too risky” to allow the contract for organising mandatory work placements in the South-East to continue. The action announced by employment minister Chris Grayling was just the latest in a series of events involving A4e.
Earlier this year Emma Harrison, the company’s chief executive, resigned after the police began an investigation into the company. The investigation has so far led to eight arrests.
In a statement, A4e welcomed the announcement, describing the results of the audits as “positive findings”.
Andrew Dutton, group chief executive of A4e, says: “These findings demonstrate what I have always maintained to be true – that there is no place for fraud at A4e and make it clear that A4e has strong controls around its flagship contract the Work Programme. Our immediate task is to further enhance our controls to cement our position as a trusted provider of front line public services.”
However, the company admits that in relation to its mandatory work activity contract in the South-East, its administrative processes “fell short” of its own standards “and those required by DWP”. And it continues: “To this end we have accepted that the mandatory work activity contract will be terminated.”
A4e is not the only organisation to come out these events badly. In a report published today, the National Audit Office criticised the DWP, saying it did “not do enough” to quantify and address cases of reported fraud investigated since 2006, amounting to£773,000.
Margaret Hodge, chair of the House of Commons public accounts committee, says she is “truly shocked by the glaring holes in the department’s detection and prevention of fraud in its employment programmes”.
