Systematic Fraud in Welfare-to-Work (A4E, Working Links): We Ask the Hard Questions.

Grayling: Praying for a Miracle.

“There’s no problem with fraud in A4E or elsewhere. I asked them and they said it wasn’t so. And how is this Eddie Hutchinson chap? He goes there and a day or so later he’s making all these wild allegations. Anyway he was only at A4E for two minutes. And what about that Margaret Hodge, eh?”

That in a nutshell is what a dishevelled Chris Grayling said on Newsnight yesterday (see it here).

Before adding our own claims about potential  fraud,  mismanagement and unacceptable practice in the Welfare-to-Work Industry, we note this:

 The Daily Telegraph had reported (Here),

The experienced accountant was appointed head of internal audit at A4e in the autumn of 2010, just before Downing Street lauded his boss’s “proven track record”.

Within weeks of starting, his attention was drawn to what he described as an “ever-increasing volume of frauds”, sometimes more than one potential case a day, Mr Hutchinson said in evidence to Parliament.

After seven months at A4e, Mr Hutchinson said in evidence that he was convinced he had seen “unethical behaviour, mismanagement, inadequate corporate governance, and risk management, and excessive payments in the form of salaries and bonuses”. He has told MPs: “In my professional view, it was systemic.”

Mr Hutchinson said he had encountered a “a multi-billion-pound scandal”, after working for two companies in the welfare-to-work industry.

He claimed his work running the audit department was “regularly disrupted” by having to investigate “recurring incidents” of fraud and irregularities.

This was not unprecedented. He had previously investigated suspected fraud in the welfare-to-work industry at Working Links, another company with millions of pounds of government contracts. In testimony to MPs, the auditor described a “common theme in relation to Department for Work and Pensions contracts”, not limited to A4e

Grayling was specifically responding to this:

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”.

More in the Independent Here.

While evidence accumulates about the ‘bad practice’ of A4E and Working Links, let’s not forget the other companies (SEETEC for example) which did not have the benefit of a whistleblower.

It beggars belief that the same scams did not take place in other firms.

But this, we are told, is all in the past.

The Work Programme – payment for getting someone into 6 months full-time employment, with rigorous checks – ahs done away with all that.

But..

• The Work Programme is creating its own perverse effects. Companies are now taking the initial payment (around £400) for everyone. Then they ‘sift’ them. They concentrate only those thought likely to get a job . The rest are ‘parked’, and nothing is done for them.
• Mandatory Work Activity is funded. We would like to know how much these welfare-to-work companies get for sending somebody on this Workfare scheme, and how much they profit from forced labour. Given their proven capacity for abusing the system are there cases of people being sent on MWA to increase companies’ profits?
• The Community Action Programme will extend compulsory Workfare to everyone on the Dole for more than 2 years. What money will be made by Welfare-toWork companies? What cash with those directly running the schemes get?
• Critics of the Welfare-to-Work Industry allege that scheme, including the Work programme,  are administered without any protection from bullying,. There are no controls on the way they are implemented,. There is no proper independent complaints procedure
• Why in the first place is it necessary to hand over people to these companies, who are given extensive powers over their lives, in order to get them into jobs? Did Full Employment in the past need people taking a cut out of public funds to prepare them for employment?

People know what it’s like to be shouted at by Welfare-to-Work providers, told they are “not really” looking for work, and instructed on how to live their lives.

They bitterly resent the profits being made out of their misfortune.

The time has come to scrap the Work Programme!