Ex-chairman of welfare to work firm was paid £1.3m dividend

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YORKSHIRE-based welfare-to-work provider A4E paid its former chairman Emma Harrison a dividend of around £1.375m before she stepped down last year, despite the fact that the group reported a loss in its most recent accounts.

Ms Harrison, who once appeared on Channel 4’s The Secret Millionaire and is the Government’s former “family champion”, quit last year as controversy surrounded the business.

The firm’s five shareholders were paid £11m in dividends in the previous financial year, of which Ms Harrison received around £8.6m, despite failing to meet Government targets for finding jobs for the unemployed.

Former Home Secretary David Blunkett was paid £35,000 by A4E in the 2011 to 2012 financial year for his work as an adviser on business development for the international part of the company.

Accounts for the Sheffield-based firm filed at Companies House reveal that the company posted a pre-tax loss of £2.1m on reduced sales of £194.1m in the year ending on March 31 2012. The company made a pre-tax profit of £15.1m in 2011 on turnover of £234.33m.

No dividends have been paid out from mid February 2012, and the board has also determined that none will be paid in the financial year to March 2013.

In a statement to accompany the accounts, Sir Robin Young, the chairman of A4E, said: “2011 to 2012 was an unexpectedly turbulent year for A4E, but one from which the company has emerged stronger and leaner. I became chair at the end of February 2012 after the resignation of the company’s founder, Emma Harrison, and at a time when the company was facing accusations, subsequently proven to be unfounded, that it was fraudulent.

“Emma Harrison stood down, after intense media pressure, because she did not want the media focus on her to distract from the delivery of A4E’s mission to improve people’s lives, and from the work of our over 3,000 employees who support people into jobs or become better prepared to get jobs or provide much needed professional advice.”

Sir Robin added: “We commissioned the international law firm White & Case to undertake a comprehensive review of the company’s systems and controls under the current contracts with both the Department for Work and Pensions and the Skills Funding Agency.

“Their work concluded that our written policies and procedures currently in place or being put in place do meet our obligations to minimise the risk of fraud. They made a number of recommendations for improvement and we are on course to implement all of them.

“As further assurance for the board, the separate audits undertaken by both the DWP and SFA confirmed that they had identified no evidence of fraud – systemic, attempted or otherwise – in relation to any audit completed of the contracts they hold with the company.

“No other current provider has undergone such a thorough and forensic review of its practices under these contracts.

“Indeed, the National Audit Office reports that there have been 126 cases of potential fraud investigated by DWP since 2006. A4E was one of the largest providers to DWP and was responsible for 11 of those cases, and of those 11 cases, one resulted in the prosecution of an individual member of A4E staff.”

A spokesman for Mr Blunkett, MP for Sheffield Brightside and Hillsborough, said his work for A4E had covered India, Poland and Spain and had helped the firm win contracts against international competition, creating jobs in the UK. He no longer provided assistance to A4E but considered his work with them to have been extremely valuable.”