Thursday, 22 March 2012

Is this the end? Newsnight revelations

When Newsnight devotes nearly 20 minutes to the story you know it's serious.
We got a trailer in the news; and the Guardian published the details earlier tonight.  But the piece on Newsnight was pretty devastating.  A report has been leaked, an internal A4e audit, which found evidence of widespread fraud and irregularity.  Numerous job outcome claims could not be backed up by evidence.  If this was systemic management failure, asked Paul Mason, why have A4e still got contracts?  We were shown David Cameron at an A4e office and told that A4e are paid £170m a year.  Then we were told that 224 client  records were examined from 20 of the company's top performers.  4% of the claims were described as potentially fraudulent and 12% as risky.  These cases come from all over the country.  Employers complained of being given blank forms to sign.
A4e were said to be playing it down and wouldn't be interviewed.  Kirsty McHugh of the ERSA (the industry trade body) said that appropriate action had been taken.  But the DWP never saw the document.  Why not?  And what did A4e do about it?  Mason said that there were questions for the politicians.  The government has a duty of care to the unemployed who are being sent to A4e.  No one from the DWP would be interviewed.
That gave free rein to Margaret Hodge, who talked of a "shocking catalogue of incidents" and fraud being "erndemic in the company".  Any manager of moral integrity would have shared this evidence with the DWP.  Hodge is sure that it's a systemic issue throughout the company.  She has had over a hundred emails on the matter.  The company has been greedy, she said, and she wants their contracts suspended.  people will lose trust in the system as a whole.  She rejects the idea that this was all in the past and couldn't happen now.  She believes that the culture in A4e hasn't changed, and they are not an appropriate company to be getting all that money.
Liam Byrne was also interviewed.  He wants to know if ministers knew about this when A4e got the Work Programme contracts, and what checks are now in place.
The government is now in a difficult position.  Trying to bluff this out, when even the BBC have got their teeth into it, makes them look complicit in fraud.  But pulling the plug would be very messy.
If I had to bet on it?  I think it's the end for A4e.


  1. Government has a problem. If it ditches A4e then the work programme gets sunk too.

  2. Any business who loses the confidence of its customers is a busted flush. I have no confidence in A4E and the back-to-work support it purports to, and signally fails, to provide. Do I have any right to withdraw myself from the work programme run by this company? The question is not rhetorical, I would genuinely like an answer.

  3. It's all about trust. Now these stories are still going on and growing, showing that a4e is as best incompetent, at worst defrauding the state (benefit cheats?)..what employers would want to work with a4e now. The only places that would carry on could be ones who are complicit in fraud.. and agree its ok or who are fraudulent themselves. How can the government trust a4e how can the companies that work with a4e trust them, The oh its in the past is an excuse to deny responsibility. If a person "gets away" with fraud, they will not stop they will carry on.

    13 centres out of 16 investigates they found problems, out of 224 cases 30% had errors, questionable paperwork, in a few cases clients and businesses couldnt be found. how many cases did a4e do in that time period, 100,000? if so if you scale up the percentages that is a horrifyingly high amount of potential fraud.

    Anyone who has experienced a4e as a client rarely find anything to be confident about as i have. There are good staff I admit that, i know of at least 3 or 4 who are good and decent.. They made a difference helped confidence grow others did the opposite..

  4. In addition, what employer would trust someone coming from a4e, Could there be a feeling that the clients were in agreement with some of the more blatant forms of fraud. This will do damage to any business in contact with a4e, it will do damage to the clients of a4e, and that is very bad. Good job i always get copies of everything i do in a4e..

    See, i want to work, some of the clients in a4e that talk to me and each other, we could run a better scheme than them.. we understand how it feels to be unemployed the sense of feeling worthless. I think that could be a better way to go rather than major profitable companies, give clients the opportunity to help other unemployed out. But with that you need a higher level of oversight, unlike this black box approach in the new scheme, which gives companies MORE power MORE control over the clients.

  5. How many of the other poverty pimps are as culpable of bad practise?

    I think we all know the answer.

  6. Now investigate best, ingeus, etc.

    1. Exactly, they are no better, surprised your comment got published, when I politely pointed out the same a few weeks ago the post never appeared.

    2. A4e seems to have a worse level of fraud than benefit claimants. Grey Greyling,lian Duncan Smith and Maria Miller have always stated that even low rates of benefit fraud are not acceptable they have terrorised claimants via the Tv and right wing press.
      I wonder will they be as irate with regard to A4e and other work programme providers if they have committed benefit fraud?

      This from liberalconspiracy.

      New figures show low level of benefit fraud

      by Richard Exell
      Friday’s DWP report on Fraud and Error in the Benefit System really ought to get more coverage.
      With this publication we now have figures for the whole of the financial year 2010/11, and they show:
      · 0.8 per cent of benefit spending is overpaid due to fraud, amounting to £1.2 billion, and
      · This proportion is the same as in 2009/10.
      If we look at the estimates for different benefits, they are:
      · Retirement Pension 0.0 per cent;
      · Incapacity Benefit 0.3 per cent;
      · Disability Living Allowance 0.5 per cent;
      · Council Tax Benefit 1.3 per cent;
      · Housing Benefit 1.4 per cent;
      · Pension Credit 1.6 per cent;
      · Income Support 2.8 per cent;
      · Jobseeker’s Allowance 3.4 per cent;
      · Carer’s Allowance 3.9 per cent.
      Look at the figures for disability benefits, see how low the figures are.

    3. No need to sound tetchy, Annabel. I don't like comments about other providers which make allegations I'm in no position to verify. Other providers should certainly be investigated; until that happens, how will we know if "they are no better"?

  7. The end for A4e? If so, and I will be blunt and nor mince words, I will NOT weep for them as a company!

    However, I will feel sympathy for some members of staff, namely those that tried their best under trying circumstances. Putting on your CV you worked for A4e could look like a disadvantage right now.

    I do wonder if A4e may have a way out of this.

    A4e could offer themselves for sale. As has been said, if A4e is sunk, then the WP goes down with them. The govt will be loathed to let this happen. A4e being sold could still keep their infrastructure and client list intact.

    Just one problem. Who'd buy such a tainted, toxic and discredited brand now? Emma Harrison may have to do what the previous owners of Comet did and sell it for a nominal sum of £2 as that is all it may be worth right now!!

    Alternatively, we could witness a simple name change. A4e becoming......something else. Of course, name changes are never really simple as it involves major rebranding exercise.

    One is reminded of Gerald Ratner's gaffe / joke he made in a speech to the Institute of Directors 20 years ago. The jokes were made at his company's own expense where he called his jewellery products 'crap'. He was removed as chairman of his jewellery business that bore his name, Ratners after it lost £500m and virtually collapsed. Ratners quickly changed its name to Signet Group.

    If A4e goes down the same road, a name change and rebranding will not be enough. People such as the originator of this blog and those who contribute to it will be watching, reporting and reminding people of their A4e origins. Also, what happened to Ratners was in the pre mass internet age. A4e finds it difficult to spin its way out of a problem without blogs, newspaper websites, internet forums, Facebook, Twitter and campaign groups picking up on every step they make. A name change will not stop this at all.

    So what next for A4e?

  8. I too have sympathy for a large majority of A4e employees

    As possible fraud allegations were identified in 2009 surely the Commercial finance manager / director is at fault - he must have seen the report knowing, that when the new contract was issued questions regarding fraud etc would be asked. Checks should have been put in place and (for want of a better phrase )a slating of A4e strategy be created for just this occasion - the minute any concerns were raised they should have gone into slating mode - gathering IT infomation, documents etc that would offset any concerns and be ready to present to the DWP at a weeks notice and a reference made that checks should be made on all WP providers

    Hindsight is a wonderful thing - hence the big pay packets

  9. Even if they do lose all their UK contracts they will still have their overseas business.

    Although I suspect many foreign governments of countries where A4e operate will be watching closely what is going on in the UK.

  10. I am loathe to re-enter this debate as I am sure that many feel that A4e is already hung, drawn and quartered, but didn't I hear in the same programme (Newsnight) that this was a draft report and that subsequent checks changed the position? The final position was apparently a lot less gloomy for A4e and it was that which was reported to DWP and signed off by them. (See below.) In my experience audit reports go through many iterations. By the nature of audit, a draft report is produced. It then (normally) gets referred back to those being audited to give a view on what has been found. Evidence has to be then be presented to the auditors who then either accept it or not. I know this, as I have been involved in government internal audits, so I doubt if the A4e process is that much different. A final audit report is then produced.

    A4e says "An A4e spokeswoman said: "This draft document relates to an internal audit in early 2009. As part of a fundamental review into our internal systems and controls, the audit looked into a number of cases of potential risks.

    "As a result we made significant enhancements to all our systems, including the appointment of external auditors. To get this into its proper context, while this investigation uncovered a number of areas where procedures may have been lacking, the final audit and further investigation determined that five claims were irregular and related to one former employee.

    "This was reported to the DWP Risk Assurance Division, which confirmed that the action taken by A4e fully met their own audit requirements and that they considered the matter satisfactorily resolved. A4e repaid the value of these three claims in full, which totalled less than £5,000."

    Now of course it may all be a cover up as many suggest. It may all be happening still as many allege and I may be whistling in the wind, but I wouldn't bet on it. (As an aside, how many of the 3000 odd A4e employees are "guilty?" either then or now? Some? Most? All? Hardly any? I'd spare a thought for these poor buggers as in fairness iMatt does.)

    In the meantime as iMatt says, if A4e goes, the WP goes. That won't happen unless there is current evidence and what Margaret Hodge thinks isn't evidence and what people write to her is unlikely to be either. DWP say there isn't and can't be (though I've no idea how they know)and that the paper based previous system was hopeless, hence the change in the way the current WP is funded and payment only by verified results - after the event - nothing up front.

    Not at all straightforward, but I did have to smile at the BBC presenter that said last night "It was obviously a very serious report, as it was so well written." That's evidence then!

    What next for A4e? I would bet business as usual until this is resolved and when it is, one way or another, either we will have a much slimmed down A4e if they "lose" or a restructured A4e if they don't. Probably a sold on one in either case.

    Fat lady hasn't sung yet.

  11. All of the other Work Programme providers should be investigated as the whole tendering process clearly failed if the DWP gave £200m worth of contracts to an organisation they knew to be under investigation for fraud. The government has a zero tolerance for fraudulent benefit claimants buts seem to turn a blind eye when one of its major providers is at it. Hypocrisy at its best.

  12. The problem with A4E is not front line staff but poor managers, chances are if someone takes a contract over some stakff may be tuped accross, middle management are really the problem.

    1. I have to agree - as both a former member of staff and a previous service user of A4e I can confidently state that the majority of staff I dealt with were committed and professional. This cannot be said of either the management who were under such pressure to have a maximum profit and minimum loss or some (not all) of the recruiters I have known who have been far too eager to claim an outcome at all costs - the two elements combine to encourage an environment where a blind eye is turned in order to improve performance. This is where the problem lies

  13. In my opinion any complaints of fruad that A4E have investigated internally should be looked at again independently, not with just a paper trail either, customers or students with regard to prison contracts should be investigated properly and interviewed along with staff members, not just a paper trail either, this is tax payers money we are talking about here.

  14. A4E is going under.

  15. I think this has all been blown up out of proportion and someone out there is wanting A4e to go under. Spare a thought for the majority of staff who are hardworking and have not had anything to do with any fraud. How can the contracts be suspended and where will all the people go who are on their books? Plus unemployment would go up by 3,000.Let the auditors do their job and the company get on with what they are good at.

    1. "Let the auditors do their job and the company get on with what they are good at."

      What is it that they're good at?

  16. "Then we were told that 224 client records were examined from 20 of the company's top performers. 4% of the claims were described as potentially fraudulent and 12% as risky."

    Actually only 70% could be verified. I'd argue that if the police looked further, the House of cards will fall.

    I am utterly utterly amazed they have been able to continue going as long as they have AND win new contracts.

    It's time for the Government to gain some self-respect and shut this operation down.

  17. I think this will blow over it was only a prelimary report the final report had no fraud
    There has been no reports or follow up in press / tv for over 24 hours now

  18. The world is riddled with fraud, just look back at the news papers that are reporting this and the MPs that are condeming it ... are we to forget phone hacking and expenses scandle. I am not saying it is right, i am saying that pretty soon it wont be news anymore as there will be more bad news out there to keep us all angry! A4E will survive simply because tomorrows news will help people forget.

  19. AnonymousMar 23, 2012 03:49 PM, So its ok for fraud to exist so long a 3,000 people get a job.. A4e gets Hundreds of millions , How many jobs could that have created. From my personal experience what a4e is good at is bullying, and claiming money for doing not much at all. A lot of the people on these schemes are only seen once a month, 1000 clients and only 20 computers, you have to have an appointment to do job search. Otherwise you are still sitting at home doing the same thing. So a4e get paid for me to sit at home to do my job search..

  20. AnonymousMar 23, 2012 04:50 PM, I and my other friends, who have all experienced a4e's deplorable attitude to ta payers, to clients, will not let it stop.. The moment we stop speaking out about bad practice, bad behaviour is the moment we lose our freedom. So i will spread this as far and as wide as i can, Making sure everyone knows what happens.

  21. I thought these anonymous comments were being curtailed?

    1. I can reject them or publish them but I can't curtail them.

  22. “I think this has all been blown up out of proportion and someone out there is wanting A4e to go under.”

    Nonsese! This is one of the most ridiculous comments I’ve seen on this whole affair. A4e is a company made fat on lucrative govt contracts over the past 20 years under BOTH Labour and the Tories. Even when they consistently performed poorly!

    A4e has constantly ignored valid criticism from its clients, former clients and former whistle blowing employees. A4e. A4e has a whole army of people willing to defend bad practice and make constant excuses for the company. Anyone making legitimate complaints was dismissed not only by A4e, but by Jobcentre+ advisors and govt ministers. I can personally vouch for this! A4e has employed former Labour and Tory ex ministers and policy makers. A4e’s former chair and biggest share holder, Emma Harrison was appointed Cameron’s ‘working families’ advisor and the last govt awarded her a CBE! A4e have been awarded NEW multi £million contracts even in the midst of these fraud investigations.

    So just how many chances and opportunities should A4e get? A funny way to “want A4e to go under” don’t you think?

    “Spare a thought for the majority of staff who are hardworking and have not had anything to do with any fraud. How can the contracts be suspended and where will all the people go who are on their books?”

    As, I said before on more than one occasion, not all A4e staff are terrible. Some tried their best under trying circumstances. However, many were and are rude, bullying and just incompetent. As for fraud, how many times does fraud have to happen within a company like A4e? Is once too many? Or does it have to happen 10, 20 or more times for you to take notice and see it as a problem? How can the contracts be suspended you ask? Well, that’s up to the govt to decide. However, suspended they must be as A4e has gone from a distrusted company (in the eyes of many former clients esp) to a toxic laughing stock.

    You do seem to be looking for someone to blame over A4e’s self inflicted woes. If so, I strongly suggest you find Ms Harrison’s email address ad start there. You can then contact the directors of A4e as well, not to mention the managers of the A4e branches where fraud has taken place. Perhaps you should ask them all what quality control checks were in place and why they were not adhered to.

    1. While I agree with most of what you're saying, the practicalities of suspending or cancelling the contracts are great. A large majority of the staff, as I've always said, are hard-working people trying to do the best job they can. If the contracts are suspended they will either find themselves working for another contractor or lose their jobs altogether.

    2. Yes, I agree that suspending WP contracts will be a major headache for ANY govt.

      However, BOTH Labour and the Tories should be asking temselves how this situation has been alowed to happen.

      Not just fraud and alleged fraud and poor service but also being put in a situation where the govt is having a gun put to its head due to poorly designed programs.

      Whilst A4e and other W2W providers rightfully take much of the flak, it is this and the prev govt who are ultimately at fault here.

      Too big to fail. That was the reason given for the massive bank bail outs. Is this also the reason A4e may be given a second, or rather umpteenth chance?

      P.S. Once again I agree. Not all staff are bad. Some do actually listen to clients concerns and do thier best under trying circumstances.

  23. It should be upto the hard working trustworthy staff to blow the whistle on bad practice, not only in their own systems, but with the job centre. Its their duty If they dont complain about such incidents then they are complicit in it.

    If i see a crime, and i dont let the authorities know as well as the people involved i am Just as morally guilty of that crime because I did nothing and let it happen. There are bad and good staff.. Its the duty of the good staff to highlight and point out the bad staff. so that the company can grow and help others. The fact that there has been little if any monitoring of these systems by the dwp, shows this is a problem Now this new scheme has given MORE power to the providers, they can do what they wish within the black box. Effectively removing the controls that SHOULD be in place. And think about it, fraudsters never stop with just one.

    1. Blowing the whistle - easy to say, but in reality, much harder to do. If the culture of the workplace leads to cutting corners people become part of that. And if someone takes the moral high ground they can find themselves isolated, unable to prove it in the face of denial, out of a job and unlikely to get another one. I know of A4e whistle-blowers to whom that has happened.

    2. I know its hard, its damn near impossible in some companies, thats why there should always and i mean ALWAYS be an oversight a confidential number that you can talk to and tell of concerns.. Independent case examiners is a good start.. but it should be open for staff and clients. Especially as this is a government run scheme, which affects everyone, tax payer and client alike. I think whistleblowers deserve rewards, because they are truly working for the public good.

  24. Why should the directors of A4e profit from people's misfortune of being unemployed ?
    At the initial contact with A4e one is given the impression that A4e is some great social enterprise type organisation .This is a misleading information at that they do the same as most other large commercial organisation and do some charitable giving to look good.

    When you are mandated to follow the Work Programme your are monitored by A4e for a period of 2year regardless of whether you get work or not. They will monitor your progress even in work during that 2 year period. A4e will get paid even when you use your own resources to find a job and you can't simple tell A4e to go and get knotted. This Work Programme is very very very flawed and gives public money away for no work done by A4e other than some box ticking.

    I would agree with Margaret Hodge that the Contracts with A4e should be suspended both because of suspected irregularities and the fact that A4e acted as an adviser to government within the tendering process.

  25. "The world is riddled with fraud, just look back at the news papers that are reporting this and the MPs that are condeming it ... are we to forget phone hacking and expenses scandle."

    The BIG difference is that newspapers have not been accused of and caught committing financial fraud against the taxpayer. A4e ARE in this position.

    Secondly, if I do not like way Sun, the former NoTW and other newspapers have been behaving, I can decide not to purchase them. I can in fact decide not to purchase any product or service owned by Rupert Murdoch.

    I can also decide to vote against my MP if he or she were found to have been claiming excessive expenses. Indeed, some MP’s lost their seats and a couple ended up doing a bit of porridge as a result.

    In stark contrast, the taxpayer is never consulted and has no choice when the govt decides to use them the likes of A4e. Nor do their clients!

    When can someone decide that A4e, G4s, Serco, or Ingeus are poor value for money? When can they vote with their feet?

    "A4E will survive simply because tomorrows news will help people forget."

    You wish!!!!


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