Ministers were urged last night to strengthen checks on companies running employment schemes after it emerged that there had been 125 investigations into providers in the past six years over the use of public money.
The disclosure follows the controversy over the company A4e, where four people were arrested last year by police investigating allegations of fraud. Its founder, Emma Harrison, resigned last month both as David Cameron's adviser on troubled families and as the firm's chairman.
The Prime Minister revealed the number of inquiries during an appearance before senior MPs.
He said: "My understanding is that there have been 125 total investigations since April 2006. There were 11 referrals for A4e, eight of which resulted in investigations."
His disclosure suggests that problems with companies running back-to-work programmes run deeper than just one firm and will increase pressure for greater scrutiny by the Department for Work and Pensions (DWP) of its contracts.
The department stressed last night that the investigations all related to contracts signed by the last government to run its Flexible New Deal scheme.
Margaret Hodge, the chairwoman of the Commons Public Accounts Committee, was astounded by the number of inquiries. "I have been worried that what we stumbled on with A4e was systemic," she said. "The fact we have got so many investigations really puts a question mark about how these big welfare-to-work companies are operating."
Brendan Barber, the TUC general secretary, said: "The evidence that handing welfare-to-work contracts over to big private companies actually helps more people back into work is, at best, mixed. "Many of these companies are enjoying profits associated with success without actually getting people back into work for more than a short period. Ministers are failing to hold these companies to account."
He added that the Government "must ensure money isn't being wasted on rewards for companies who are not doing enough to get people back into sustained employment."
A DWP spokesman said there had been no allegations of fraud relating to the current work programme set up by the Government.
He said it had been designed differently from previous schemes to ensure full payment for getting someone off the dole was not made until they had been in work for two years.
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