The Labour MP Margaret Hodge has asked the Department for Work and Pensions to suspend its Work Programme contracts with the employment firm A4e, after four former staff from the organisation were arrested in relation to allegations of fraud.
Thames Valley Police arrested four people last week at A4e’s office in Slough, in relation to an allegation of fraud referred to the police by the DWP.
A4e holds prime contracts to deliver the government’s flagship welfare-to-work scheme, the Work Programme, in five areas of England. According to data published by the DWP, it has about 150 subcontracts with voluntary sector organisations.
A spokeswoman for Hodge said she had submitted an urgent parliamentary question to Iain Duncan Smith, the work and pensions secretary, that asked him to suspend the department’s contracts with A4e while the police investigation took place.
"Those contracts are worth huge amounts of money," the spokeswoman said. "The allegations are serious enough that the contracts should be suspended while the police find out whether there is any fraudulent activity going on."
Charities acting as subcontractors to A4e were reluctant to comment on the case when approached this morning by Third Sector.
However, asked whether it was happy to remain a subcontractor to A4e, the Prince’s Trust issued a statement that said: "We are looking into the allegations and will make a decision based on the findings of the police investigation."
A spokeswoman for A4e said in a statement: "A4e has zero tolerance towards fraud, and any instance of fraudulent or otherwise illegal activity is completely unacceptable. We take our responsibility very seriously, and we are committed to using taxpayer’s money effectively and efficiently to deliver the best services to the public."
The DWP did not respond to Third Sector’s request for comment.