Work Programme provider A4E has been under the spotlight this week with allegations in Thursday’s Guardian that they previously forced clients to work unpaid in their own offices. This follows reports that 4 of its former employees have been arrested due to fraud allegations.
The placements would have reduced the company’s overheads in finding employment for those clients, because they wouldn’t have to spend time organising employment with other firms.
The Guardian also reports that the company has faced 9 DWP investigations since 2005 over financial irregularities, with one case resulting in a criminal conviction. While it was found that 4 of these investigations resulted in the ruling that the company had no case to answer, they have had to repay public money five times due to fraud allegation.
The provider played a role in the previous government’s Pathways to Work scheme, and it is over this period that the most recent allegations are concerned.
The company’s performance in that role was recently described as ‘abysmal’ by the Public Accounts Committee’s chair, Margaret Hodge, but A4E has managed to win new Work Programme contracts across the UK, including 2 in Scotland. Margaret Hodge recently criticised the amount of money the company takes from social enterprises and charities, describing it a “sheer profit” and questioning whether allowing private companies to profit hugely from the public purse was legitimate. She also called for the suspension of A4E's contract while the investigation is undergoing.
The company’s founder, Emma Harrison, reportedly paid herself a dividend of around £8.6m last year amid growing criticism of the profits being made by private businesses out of public contracts.
A4E was awarded the contract, while local employment charities with proven track records, such as the Wise Group in Glasgow, lost out. The company sub-contracts much of its work to other providers, including charities, but has also been accused of ‘creaming off’ the more profitable clients and leaving the more difficult ones with complex needs to others. Recent indications suggest that although the government has set targets of getting 40% of referrals back in to work, only 20% have found jobs, while the figure is even less in parts of the Scottish Central Belt. Former A4E clients have written to their MPs and the DWP about the quality of services they were offered by the company.
The company stresses that “there is no place for fraud at A4E” and that they have “brought any known issues to the attention of the authorities”.