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
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Administrative Assistant / Order Fulfilment

£14000 per annum: Recruitment Genius: An exciting opportunity to join a thrivi...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

Recruitment Genius: Production Operative

£13000 - £17000 per annum: Recruitment Genius: Due to a period of sustained an...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering