The Government has launched an investigation into an allegation of attempted fraud involving welfare-to-work company A4e.
The Department for Work and Pensions (DWP) said it had been made aware of an allegation of attempted fraud in relation to a Mandatory Work Activity contract with the firm, which is already facing a police investigation in relation to previous allegations.
Chairman of the Sheffield-based company Emma Harrison, who is one of Yorkshire’s highest profile entrepreneurs, resigned last month following the allegations and also stepped down from her role as the Government’s family champion.
The DWP said: “As a result of this new allegation, DWP has immediately commenced its own independent audit of all our commercial relationships with A4e. We have required A4e to make available all documentation which our auditors may require and provide full access to interview any A4e employees. This is separate from the independent review of internal controls which A4e has previously announced.
“We have made it absolutely clear to A4e that we take this matter very seriously, and that if, at any point during the audit or thereafter, we find evidence of systemic fraud in DWP’s contracts with A4e, we will not hesitate to immediately terminate our commercial relationship.”
A4e said: “The board has made consistently clear in all previous statements that we take any allegations of fraudulent or otherwise illegal activity extremely seriously.
“We obviously acknowledge the concerns raised by DWP, and we welcome and will co-operate fully with their planned investigations.”
Mark Serwotka, of the Public and Commercial Services union, which represents staff in job centres and private employment contractors, said: “We welcome the Government’s response to these fresh allegations of fraud which, if founded, should not only spell the end of A4e’s involvement but also surely cast serious doubt on the role of the private sector in welfare schemes.”
More than 24,000 people have been through the Mandatory Work Activity programme involving a four-week placement including maintenance work on houses, renovating furniture or supporting charities. A4e announced yesterday former senior civil servant Sir Robin Young as its new chairman.