The government has stripped A4e of its welfare-to-work contract following fraud and corruption allegations and a series of arrests, reports Shamik Das.
The government has stripped A4e of its welfare-to-work contract following fraud and corruption allegations and a series of arrests.
The BBC reports:
The government has ended a contract with welfare-to-work company A4e after deciding that continuing would be “too great a risk”, it has said.
Employment minister Chris Grayling said the Mandatory Work Activity contract to help up to 1,000 jobless people in south-east England find work would end.
The firm is the subject of two police investigations into allegations of fraud relating to government schemes. An eighth employee of A4e was arrested on Monday. Seven other people are on bail until dates in late May, June and July.
“While the team found no evidence of fraud, it identified significant weaknesses in A4e’s internal controls on the Mandatory Work Activity contract in the South East.
“The documentation supporting payments was seriously inadequate, and in a small number the claim was erroneous. There was also a high incidence of non-compliance with other relevant guidance (including A4e’s own processes).
“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.”
• Charity survey slams the shambolic failure of A4e 1 May 2012
• The document A4E doesn’t want you to see 5 Mar 2012
In March, a leaked internal document revealed “systematic failure to mitigate risk in relation to fraud and irregularity”, warning the management’s knowledge of whether its controls against fraud were working were “minimal”, and showing A4e staff “claiming for putting people into jobs which did not exist, jobs which did not qualify for payment and fabricating paperwork”.
“The report surveyed just the work of the top 20 recruiters so these are people highly successful in placing unemployed people in jobs and therefore earning money for A4e.
“Now, the report said eight per cent of the claims surveyed were either potentially fraudulent or irregular, a further nine per cent were risky, 14 were uncheckable, often because the employer could not be contacted or indeed found, and as a result, only 70 per cent of all the claims could be verified.”
Earlier that month, A4e tried to block Left Foot Forward from publishing an internal document (pdf) that appeared to indicate poor performance on behalf of the welfare-to work company, which has won more than £200 million in contracts with the Department of Work and Pensions.
We reported that the document (pdf) showed:
…the job entry rate, i.e. the proportion of individuals A4e is responsible for at some level, manages to find a job for, is 8.4 per cent overall and 9.7 per cent if ‘specialists’ – those partners dealing with difficult cases – are excluded.
Meanwhile, the percentage of those who secure a job managing to hold on to that job for 26 weeks, appears to be denoted by the Outcome/Potential Outcome collumn, which has a total of 1.9%, including and excluding difficult cases. If this is the right reading of the table, then it represents a dramatic undershooting of the Department for Work and Pensions’ own targets.
As can be seen from this National Audit Office report (pdf) published in January 2012, the DWP expects 36 per cent of those referred to companies such as A4e to be secured a job for at least 26 weeks (page 4), and 28 per cent of those not on the Work programme to reach this milestone on their own (page 22).
For daring to publish the truth the disgraced firm threatened us:
“We won’t hesitate to take the strongest legal action should you publish this data or make any of the inferences set out.”
Today, they’ve begun to receive their just desserts, with porridge to follow.