Duncan Lewis

Romford Office

Crime and Civil cases

house 40 staff

A committee of MPs has said the government had failed to be strict enough in detecting fraud among its welfare to work providers.

Date: (28 September 2012)    |    

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After A4e said a recent audit of the firm had found no evidence of fraud the public accounts committee said the Department for Work and Pensions (DWP) had missed vital evidence of possible fraud, particularly at the firm A4e.
Committee chair Margaret Hodge said the DWP had not been proactive in setting in place systems which root out fraud.
MPs accepted that financial checks on welfare-to-work schemes had been improved under the current government.
But Labour MP Ms Hodge said that risks had remained, especially where value for taxpayers' money was concerned, with the Work Programme, launched in 2011.
She explained the design of the programme was such that there was still the possibility of providers being paid for finding work for people though people may have found the jobs on their own.
According to the report, the DWP spends about £900m each year on programmes designed to help unemployed people find, and keep, jobs, with both private companies and charities securing contracts.
But A4e, the government's largest provider, was currently the subject of a police investigation into allegations of fraud relating to its multi-million-pound welfare-to-work activities.
In February, entrepreneur Emma Harrison stepped down as the head of A4e and quit her role as the government's "family champion".
The DWP launched its own investigation in March, following a new allegation of attempted fraud in connection with A4e's provision of services for the government's Mandatory Work Activity scheme.
Ms Hodge said that when private companies are chosen to deliver public services it was essential that such mechanism were at place to prevent and detect fraud and malpractice.
In this instance, the DWP's arrangements for overseeing and inspecting its contractors were so weak that vital evidence on potential fraud and improper practice was left unnoticed.
The department failed, for example, to obtain from A4e damning internal audit reports produced in 2009 which pointed to instances of potential fraud and malpractice across the country.
The MPs also said the DWP had not been specific enough with its terminology, including failing to define the standards a provider had to meet to be a "fit and proper organisation".
A clearer understanding of these terms would help government departments decide which firms to do business with, the committee suggested
A DWP spokesman said many of the allegations in the report "relate to previous government schemes", dating back to 2009 when Labour was in power and that it had place the toughest anti fraud measures in government back to work scheme.