Ex-Labour Ministers called on to reveal A4e advice

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THE Work and Pensions Secretary has called on former Labour Ministers at the Department for Work and Pensions to reveal what advice they received about alleged abuses of Government contracts by welfare to work firm A4e.

Iain Duncan Smith has written to his opposite number, Liam Byrne, to ask Labour to provide access to documents detailing what information they might have had about the Sheffield-based firm’s handling of contracts handed to them under the last government.

Sources close to Mr Duncan Smith say he is angered by Mr Byrne’s claims he has been “asleep at the wheel” over claims of alleged fraud as an internal investigation conducted by the DWP was said last week to have found only “significant weaknesses in A4e’s internal controls” in the company’s implementation of a coalition Government contract.

Employment Minister Chris Grayling last week announced A4e was being stripped of its Mandatory Work Activity contract to help up to 1,000 jobless people in the South East find work as the department’s analysis had shown its work “fell significantly short of our expectations” and to continue was too great a risk. The cancelled deal is understood to be worth less than £1m and A4e, which was set up by Yorkshire entrepreneur Emma Harrison to help the unemployed back into work, still retains others worth more than £70m a year.

Mrs Harrison quit as chairman of the firm in February, and also relinquished her role as the Government’s Family Champion.

In a letter to Mr Byrne, the Work and Pensions Secretary said his department requested documents from Labour MP Margaret Hodge, chairman of the Commons Public Accounts Committee (PAC), relating to alleged fraud under the last government but so far had received only a “limited amount of information”.

Mr Duncan Smith wrote: “I hope you are as concerned as I am to ensure any alleged fraud is properly investigated and will join me in my request to the chair of the PAC that she passes the information she holds to my department immediately.

“However, it is also important to highlight the fact that none of the evidence we have seen so far or any of the allegations from alleged whistleblowers relate to the current Government contracts, only to contracts procured by the previous government, of which you were a leading member.

“It is for this reason, and in the interests of transparency, it is crucial for all advice received by previous Labour Ministers in this area to be released.

“This will ensure complete openness regarding what was known about fraud in the welfare to work industry, how these contracts were managed by previous ministers and importantly what actions were taken in response to any investigations.”

Mr Duncan Smith has also written to former DWP Ministers Yvette Cooper, James Purnell, Peter Hain, John Hutton, David Blunkett and Jim Murphy, amongst others, to ask their permission to release the advice they received while in office.

Earlier, Mrs Hodge said she was launching a leak inquiry after documents claiming there was “systematic fraud” at A4e were released to the Daily Telegraph.

The written evidence was submitted to the PAC by Eddie Hutchinson, formerly head of audit at A4e.

In his evidence, which had been submitted in confidence, Mr Hutchinson alleged little was done to deal with concerns from senior managers that tax-payers’ money was being abused.

In response, Commons Leader Sir George Young said MPs caught leaking documents in the past had been suspended from the House.

Employment Minister Chris Grayling said last night: “There are serious question marks about how substantial and how correct the evidence that has been laid before the select committee is, serious potential misunderstandings.

“We have carried out detailed investigations through independent auditors – Ernst and Young did this for us. We have not found evidence of fraud at A4e.”