Vast fraud alleged at welfare-to-work firm

 

A welfare-to-work company owned by David Cameron's former families tsar has been accused of being involved in a vast fraud scandal in which there was "systemic" misuse of public money.

In written evidence submitted to Parliament by a former chief auditor at A4e he claims that an "unethical culture" led to fraud by employees at the company, which holds major government contracts.

But the whistleblower said that when concerns were raised about wrongdoing little was done to address the widespread abuse of taxpayers' money. The evidence, detailed by The Daily Telegraph, was submitted by Eddie Hutchinson, the former head of audit at A4e, to a meeting of the Commons Public Accounts Committee on Tuesday.

However, the meeting was held in private after objections from Conservative members of the committee who said they had been given no advance warning of the whistleblower's evidence.

A4e last night strongly denied any wrongdoing. It said: "None of these allegations stand up. None of the issues raised here prove there is systemic fraud at A4e and all of them relate to historic contracts."

In his statement to the committee, Mr Hutchinson claimed that the leaders of the company oversaw a "disgraceful misuse of government and taxpayer funding", characterised by unethical behaviour, mismanagement and inadequate risk management.

He said the company had a culture that discouraged employees from revealing improper practices. "I encountered unethical behaviour or wrongdoing that fell way below standards that should be expected of organisations funded by significant sums from the public purse," he wrote.

Mr Hutchinson, who worked at A4e from October 2010 until May last year, alleged:

* A bonus scheme for employers "drove inappropriate behaviour" by staff willing to commit fraud.

* Staff acted in the belief that if their irregularity was discovered, they could resign in the knowledge no further action would be taken.

* Two years on from a 2009 audit report warning that fraud was not confined to one part of the country, fraud was still "systemic".

Mr Hutchinson made the allegations a week after the Government said it had seen no evidence of fraud in contracts held by A4e.

A spokesperson for the Department for Work and Pensions said: "These allegations all relate to programmes run by the previous Government. We have audited current contracts with A4e and found no evidence of fraud.

"We have changed the way we run new welfare-to-work programmes to safeguard taxpayers' money. We only pay by results and under the Work Programme, claims are verified against benefit and employment records to make sure fraudulent claims are not processed.

"No one should mistake unproven allegations about past welfare-to-work schemes with strong controls we have in place on current programmes."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant - Dublin

£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...

Ashdown Group: Marketing or Business Graduate Opportunity - Norwich - £22,000

£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...

Ashdown Group: Database Analyst - Birmingham - £22,000 plus benefits

£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before