Wednesday, 23 May 2012

The secret evidence disclosed

Thanks to the Telegraph, we now know some of what Matthew Hancock MP and his Tory colleagues wanted to keep private at the Public Accounts Committee meeting yesterday.  The whistle blower is Eddie Hutchinson, an accountant who was appointed head of internal audit at A4e in 2010.  The paper has put the whole of his evidence online here.
Hutchinson had previously worked for Working Links, where he uncovered a level of fraud which he described as "farcical" and which was ignored by management.  As later with A4e, he said that the bonus system was to blame.  Hutchinson was made redundant by Working Links and then went to work for A4e.  He found a similar situation there.  By February 2011 he was dealing with the Slough case, which, he said, should have been referred to the police earlier.  "He claimed he also became aware of a fraud on the New Deal for Disabled People contract from A4e’s Glasgow office. In this case, he said, an employee resigned, saying she had falsified evidence and misappropriated cash. At the time, he made a note it was a 'regular occurrence' that no action was taken against people admitting to fraud."  There were numerous other cases in different contracts.  He was supposed to be helping A4e to develop watertight risk controls, but noticed no "significant enhancements".  His advice was not heeded.  "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.'"  A4e denies this, of course.  It's all in the past.
Surely this sort of evidence can't be brushed under the carpet.

The Exaro website has published the 2009 internal A4e report.  It can be downloaded from the site here (you will have to register with the site).   We'll be examining that soon.


  1. Surely this sort of evidence can't be brushed under the carpet.

    And why not? It has been so far. Although I suspect A4e may be jettisoned soon to save the Work programme, lest it drags the whole sorry ship down with it.

  2. I see they use the It was it doesnt matter.."A spokesman for A4e said: “None of the issues raised by Mr Hutchinson prove there is systemic fraud at A4e and all of them relate to historic contracts.”

    So that's ok then... Rubbish... it shows the whole system needs to be investigated, I know some will say there was an audit.. but it wasnt one thats over the entire company, it was One office, in one geographic area.

    All this evidence/ leaked report shows that since a4e started with the work programme (new deal, flexible new deal) there has been risky practices at best and fraud at worst. I think people get mistaken on the phrase systemic.. I have noticed a lot of these problems are always by individuals How many individuals do it, you have to ask yourself How many people are doing these things, 1, 2, 8, 20, 200. If 200 individuals do it, then there is something seriously wrong with the system in a4e (and other places). I think the entire every single provider needs to be checked out.. I dont think its just one company, (or one individual).

    Because they have a lot of public money they need to be totally open, and not hide behind secret hidden dosiers, secret reports. The DWP should be behind this because all this has given the work programme a black eye.

    1. I reckon that Mr Hutchinson has also given black eyes to the DWP, Ministers and the Tory MPs on the Public Accounts Committee.

      Evidently the Government and Devereux of the DWP wanted to try to keep this latest scandal under wraps but Mr Hutchinson has now blown that idea wide open.

      Mr Hutchinson alleges that the bosses of A4E knew all about the various alleged rackets but did nothing. That makes it a systemic failure, in my book.

      I think Margaret Hodge was right. Ultimately, it would have been less damaging if the whole thing had been dealt with in public.

      What about Emma Harrison's £8 million, one wonders? Is she going to return that to the taxpayer before close of business this evening? I hope that the Police wll prosecute her if she does not.

  3. @ Judi
    I thoroughly agree with your comment. "What about Emma Harrison's £8 million, one wonders?"
    It's not just the £8m - the woman is said to have a personal fortune of around £70m - Just about all of which has come from the public purse.
    And it's not just her - all in all the Wp and previos "Welfare2dole queue and back again schemes" have wasted billions and billions.

  4. And what about the £35K pa consultancy fee David Blunkett gets FROM a4e, his little reward (one assumes) for getting them into the game in the first place? Will he be refunding that to the taxpayer or will he be charged with some kind of receiving stolen, benefitting from criminal activity or similar?

  5. The Teflon Don24 May 2012 at 05:10

    I have a vision of Emma Harrison becoming a Norma Desmond like recluse (Billy Wilder's Sunset Boulevard). The occasional visitor to the faded mansion would say to her "didn't you used to be a bigshot at A4e". "I still am", replied Emma, "it's A4e that got smaller".

  6. Can't add to much to what people have posted above.

    Just to add to what Judi and Bill K have posted, what about Ms Harrison's CBE? Should she not lose this should Eddie Hutchinson's allegations be found to be true? On her blog, she mentioned how excited and proud she was to receive the said bauble.

    Knighthood, Dame, MBE, CBE OBE makes little or no difference to me. I am not overly impressed by such titles.

    However, we should remember the removal of Fred Goodwin's knighthood and the bru-ha-ha it generated. One can say Goodwin was reckless, irresponsible, foolhardy, greedy and so on. However, he did not break any British laws. With this latest revelation, can anyone (even those apologists for A4e and the W2W sector), say the same about A4e?

  7. A4E seem to have made a statement in a magazine (?) called Recruiter:

    1. Yes, it's what they've said all along, with a bit more specificity. "It's not true" is the same as saying that Hutchinson is lying. Which leaves it to Hutchinson to try to defend his reputation with a court case. The fate of whistle-blowers in every area.

    2. Historian

      I doubt that the Daily Telegraph would have published Mr Hutchinson's statement unless the DT lawyers had also been shown compelling evidence to support the claims made in the statement.

      Adter all, if A4E are going to sue anyone for libel, they'd do better to sue the DT and Mr Hutchinson together rather than just suing Mr Hutchinson alone. I'm waiting to see whether A4E issue any Writs because my guess is that they won't!

      The way I read A4E's statement, they seem to be trying to hide behind the DWP - but the DWP's own ability to manage these W2W contracts properly is now in serious doubt, in my view. The fact that the DWP haven't found anything amiss doesn't mean that there hasn't been any fraud - that strikes me a silly way for A4E to have tried to defend themselves.

      Also, in Mr Hutchinson's written statement, he said that he found that the approach and attitude at the very top of A4E to be "immature" in his opinion.

      I'd say that "immature" is a good description of A4E's top brass. Not fussed about the dreadful impression created by their website. Not fussed about the fact that their own documents and the website are full of spelling mistakes, poor grammar and simply having used the wrong word - eg "illicit" ehen they meant "elicit." It is a sloppy, careless, amteurish and ill-disciplined approach that does not seem to have improved with the arrival of the Work Programme etc.

      It leaves me wondering whether the top brass of A4E would actually have the ability to recognise "fraud" even if it leapt out and bit them!

    3. It's not just their website, is it? It's the fact that they think they can find jobs for people when their advisers don't have the necessary understanding of the English language to produce literate CVs for the customers. How can you expect someone with a CV re-written by an adviser like that to get a job? And, more importantly how did the adviser get a job doing such things in the first place?

    4. Historian has a point. He (Hutchinson)may well be faced with going to court against A4e. HOWEVER, A4e will be probably be reluctant to see this happen as it will pile on more controversy and expose even more of their dirty laundry to the public arena.

      Remember the infamous McLibel case in 1997 (or to give its proper title, McDonald's Corporation v Steel & Morris). McDonalds took action against a couple of environmental activists who alleged the burger chain had an appalling environmental record, exploits children with its ads and treats its staff poorly, amongst other things. McDonalds actually won the case and were awarded £40k which they refused to collect, no doubt due to the David and Goliath nature of the case and the bad publicity it gave McDonalds.

      A4e taking an individual to court could well be in the same situation as McDonalds. Even if they were to win, they (A4e) could have certain business practices exposed as well as the nature of the relationship they have with their clients.

  8. Ok, someone from A4e goes to a4e, saying A4e is committing fraud.. So a4e says oh no we arent.. and thats it..

    Second a4e gets a company who a4e pays to look for fraud in a4e. And they find Nothing..

    Third, Dwp states there is no fraud in a4e (except for the possible one where 8 people have been arrested, and the other 11 that devereaux says he will look into, except he has put his reputation on the line in stating there is NO fraud). So I wonder if fraud will be found.

    Too many people have too much vested in protecting these schemes, As has been seen by the gagging of the session, the Not Hutchinson is reading this and the others, I have nothing but respect for their sense of duty and justice.

  9. The evidence is clear to objective observers - the DWP are complicit and corrupt. What exactly have they done to ensure this unlawful activity did not go on?

    The DWP want the figures for people returninging to work to look good. They have control of a work program that looks efficient - but is clearly bogus. Perhaps the authorities should check out other scams they are complicit in - ATOS and their so-called 'medicals' perhaps ;)

  10. It really is nonsensical isn't it?

    But we should remind ourselves of that golden promise made:

    "If any evidence of systemic fraud either past or present is found we will not hesitate to terminate our commercial relationship with them."

    Time soon to put your money where your mouth is.

    I also think that the DWP's role bears further scrutiny - including possible complicity in a cover up.

  11. I see IDS is attacking the Public Accounts Committee.

    Not surprising given the number of punches he is taking to the face.

    The WP is falling apart before his very eyes. A sight indeed to behold.

  12. If all the money spent on these ineffectual agencies was channelled into a worthwhile manufacturing capability making
    things that people want,instead of importing from China et al,wewould create far more oppurtunities for apprenticeships and skilled workers than we could ever hope to under these sham money making schemes - not
    to mention regaining some of our lost self respect


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