Four whistleblowers were yesterday "gagged" by Tory MPs from giving public evidence about widespread fraud in the Government's controversial welfare-to-work programmes.
Conservative members of the powerful Public Accounts Committee blocked attempts to allow internal auditors from companies, including A4E, from giving evidence about past malpractice that they had uncovered.
Instead they were force to give evidence behind closed doors after Tories on the committee objected that the Department of Work and Pensions had not been given advance knowledge of their evidence. Last night a source on the committee suggested that the whistleblowers had been "gagged".
Another said they believed that pressure had been applied to the Tory MPs by the Government to ensure that more damaging evidence about the fraud on the programmes was not placed in the public domain.
The Conservatives have an outright majority on the committee and have the power to block the evidence given in private even to be considered in its final report.
"The evidence was damming," one MP on the committee said. "But the Tories blocked the hearing from being in public. We will have to see whether it can now be published at a later date – but that depends whether they vote together as a block to prevent it." When the session reopened to the public for the committee to question Robert Devereux, permanent secretary at the Department of Work and Pensions, on the allegation that Austin Mitchell, a Labour MP, expressed concerns about what they had heard in private.
"We have just had a long closed session which produced some fairly damning indictment about both the structures and the practices in A4E and there were several indications of possible fraud," Mr Mitchell said.
Mr Devereux conceded that "they did sound damning" and promised that they would be investigated. But he insisted that they referred to past contracts and that new measures had been put in place by the department to ensure that such fraud could not happen in the future.
He also confirmed that 11 other separate cases of fraud at A4E were now being investigated by the department – despite claims by the company that there was no evidence of wrongdoing in those cases.
It is also understood that the evidence provided by the whistleblowers will now be provided to the police.
Matthew Hancock, a Tory MP who insisted that the whistleblowers evidence be given in private, said it was the correct thing to do. "The committee decided it would be inappropriate."