UK Politics

Q&A: A4e row

Welfare to work firm A4e is a key player in the government's bid to get people who are long-term unemployed back to work - but BBC Newsnight has evidence the company knew about widespread potential fraud.

What is A4e?

The name stands for Action for Employment and the company's core business is helping people find work. It works with government, private firms, the public sector and others in Europe, Asia and Australia. Set up in Sheffield in 1991 to help retrain redundant steel workers, it expanded across the UK - where it has 200 offices and employs more than 3,500 people - and abroad. It has been working with UK governments since 1997.

What happened?

The firm is at the centre of two investigations - one a police probe into alleged fraud into its offices in Slough, Berkshire, the other involving a team of auditors from the Department for Work and Pensions. Four former members of staff were arrested on suspicion of fraud in February and bailed. It is understood the police probe does not relate to the company's work on the government's Work Programme. But the DWP launched its own investigation in March, following an allegation of attempted fraud in connection with its Mandatory Work Activity scheme.

Why has it hit the headlines?

Because the firm handles millions of pounds worth of government contracts for its welfare-to-work schemes - a key part of its policy to overhaul the benefits system. It is involved in the government's Work Programme - which sees contractors paid to help find work for the long-term unemployed. And its former chairman, Emma Harrison, was appointed by Prime Minister David Cameron to be the government's "family champion" in 2010. She quit that role, and the chairmanship, in February saying she did not want the "media focus on me to be any distraction for A4e".

What does A4e say?

A4e says the alleged fraud being investigated by the police dated back to 2010 and had been uncovered by its own investigation. A4e chief executive Andrew Dutton said the company had "zero tolerance" towards fraud and was committed to using taxpayers' money to deliver the best public services. He said: "I will not sit by and let these accusations discredit the hard work that our staff do to support thousands of people into work."

What does the government say?

The Department for Work and Pensions says it is taking the matter very seriously and, if any evidence of "systemic fraud" is uncovered, it will terminate its commercial relationship with the firm.

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