A4e chief ‘devastated’ to step down

During subsequent years A4e expanded massively, garnering Government contracts, opening offices around the world and earning its founder a fortune.

However, last night Emma Harrison took the decision to step down as its chairwoman in the wake of an ongoing fraud investigation.

The probe had already seen her stand down as the Government’s so-called “families tsar” as investigations continue into its operating procedures.

Last night Andrew Dutton, A4e chief executive, paid tribute to Ms Harrison, saying that she was “devastated” to be leaving the firm.

“A4e would not exist but for the passion and ambition of Emma Harrison, who has helped improve the lives of thousands of people, and has been an inspiration to all our staff and customers for more than 25 year,” he said.

Mr Dutton said that in order to reduce “speculation and uncertainty” he had appointed the international law firm White & Case LLP to conduct an independent audit of A4e’s controls and procedures.

The review will be carried out in collaboration with A4e’s funders, including the Department for Work and Pensions.

“I have asked White & Case to carry out their review as quickly as possible,” he said.

“It is of paramount importance to myself and the A4e board that the ongoing Press speculation is laid to rest as quickly as possible, and I believe this independent review will answer the concerns raised over recent weeks.”

A4e came under heavy criticism last year after it paid £11mn in dividends.

Of this figure, 87 per cent was given to Ms Harrison, despite all its UK turnover – estimated to be as high as £180m – resulting from Government welfare contracts.

Last night the work that A4e does for the Government came under further scrutiny as one MP called for its dealings with Whitehall to be suspended.

Labour MP Margaret Hodge, who chairs the Commons public accounts committee, said A4e’s work should be halted and questioned why the firm continued to get contracts despite a “dismal” past record.

Mrs Hodge said: “I welcome the fact that they have agreed to do a total audit of the company because the grave concern I have has been around the allegations of fraud.

“There are still remaining questions around that. The issues of whether or not the service they provide for their clients is effective, and whether or not there’s value for money, also need to be addressed.”

Despite the controversy and demands for existing work to be halted, A4e has been named as the preferred bidder for a £15m contract with the Skills Funding Agency to provide education to prisoners in London and work advice on release, it was reported.

A4e said on Wednesday that the investigation was one of two outstanding cases out of nine it had referred to the DWP following internal inquiries.

The other concerned a subcontractor, it said.

The Department for Work and Pensions confirmed previously that it had launched a total of nine investigations into alleged fraud at A4e since 2005.

Five of these cases resulted in the firm having to pay back thousands of pounds to taxpayers following the unearthing of “irregularities”.

In one case, a former employee of the firm in Hull pleaded guilty to eight counts of forgery.

A4e remains one of the five prime contractors to the Government’s flagship Work Programme.