Latest Public Sector News

16.05.12

A4e loses DWP ‘mandatory work’ contract

Employment firm A4e, which has employees at the centre of fraud inquiries, has lost a contract with the Department for Work & Pensions.

The company – whose chair Emma Harrison stepped down earlier this year – lost its contract for organising mandatory work placements in the South East.

The DWP said its investigations found no evidence of fraud but said it was too risky to continue with the contract.

It said some of A4e’s supporting paperwork was “seriously inadequate” and occasionally “erroneous”, but that at the Epsom office, 97% of payments to the company under the mandatory work activity (MWA) programme were correctly billed for and logged, and the other 3% could be blamed on flawed processes, not fraud. A separate police investigation into possible fraud centres on the company’sSloughoffice.

The information came out in a written DWP statement to the House of Commons.

It said: “The process established prior to March fell significantly short of our expectations. As a result, the department has concluded that continuing with this contract presents too great a risk and we have terminated the mandatory work activity contract with A4e for the south-east.”

The DWP said contingency plans were in place to keep placements going.

A4e said in a statement: “A4e today welcomed the positive findings of the audits undertaken by the Department for Work and Pensions (DWP) and the Skills Funding Agency (SFA) into allegations of fraudulent activity. Both confirmed they identified no evidence of fraud, systemic, attempted or otherwise in relation to any audit completed of the contracts they hold with A4e.

“Along with reviews by the Welsh andNorthern Irelandassembly governments, this means that the majority of A4e's business has been fully examined by external auditors – ensuring our customers and government funders can have full confidence in our organisation.”

It said only five staff members were employed on the £1m contract and it made up just 0.5% of the company's total revenues.

The chief executive, Andrew Dutton, said: “As a company, I recognise that we haven't got it right all of the time, but we are committed to taking responsibility for our mistakes and remedying them.

“No other provider has undergone such a thorough and forensic review of its contracts, and the positive outcome speaks for itself – this is huge reassurance for taxpayers and our customers.”

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