Exit the back to work tsar: After two weeks of damning Mail revelations, she quits – so how can her firm STILL win a new £15m government deal
- Emma Harrison says she stepped down to avoid becoming a ‘distraction’
- Spokesman for David Cameron says he ‘respected’ the decision
By Jason Groves
Last updated at 8:52 AM on 24th February 2012
Dramatic exit: Emma Harrison quit as David Cameron’s ‘back to work’ tsar yesterday after a string of allegations against her employment firm
David Cameron’s millionaire ‘back to work’ tsar Emma Harrison dramatically quit yesterday following a string of fraud allegations against her firm.
She said she was stepping down immediately as the Prime Minister’s ‘family champion’ to avoid becoming a ‘distraction’.
Her company A4e, which earns hundreds of millions of pounds from Government contracts, is at the centre of two police investigations.
Yet incredibly the firm has been named this week as preferred bidder on a £15million contract to rehabilitate prisoners in London.
Mrs Harrison, 48, who is said to be worth £70million, was facing fresh allegations of a conflict of interest after it emerged that A4e had won a separate Government contract to advise the Cabinet Office on how to get problem families back to work. Ministers were urged to suspend the firm’s contracts pending the outcome of the police inquiries into alleged fraud.
The departure of Mrs Harrison is an embarrassment for the Prime Minister, who appointed her to help get 120,000 ‘problem families’ into work and only in December described her as an ‘inspiration’.
But ministers have been rapidly distancing themselves from her in recent days as A4e became engulfed in a tsunami of bad publicity. The Department of Work and Pensions warned that the firm could be stripped of its contracts if evidence of systemic and continuing fraud is uncovered by the police. Mrs Harrison’s decision to quit is designed to limit the political fallout for Mr Cameron. But the inquiries into her firm’s activities still threaten to plunge the Government’s flagship Work Programme into crisis.
A4e is one of only five major private firms to be handed incentive deals to get the long-term jobless back to work.
A spokesman for the Prime Minister last night said he ‘respected’ Mrs Harrison’s decision to quit.
In a statement, she said: ‘I have asked to step aside from my voluntary role as Family Champion as I do not want the current media environment to distract from the very important work with troubled families.
‘I remain passionate about helping troubled families and I am grateful for the opportunity to contribute in an area where I have been active for many years.’
Pleased: Liam Byrne and Margaret Hodge both said it was right thing that Mrs Harrison had stepped down
Margaret Hodge, chairman of the Commons Public Accounts Committee, said: ‘Emma Harrison is right to step down from this high-profile role because of the huge question-marks about her organisation.
‘But there are still several allegations of fraud outstanding and I think in that light all of A4e’s contracts should be suspended until the police investigation is completed.’
Embarrassment: The decision of Mrs Harrison to quit is a blow for David Cameron who only appointed her in December. Last night a Downing Street spokesman said he ‘respected’ her decision
Shadow Work and Pensions Secretary Liam Byrne said: ‘Emma Harrison has done the right thing. But this is not the end – it’s the start of the real questions about the Government’s back to work contracts which are costing millions but are simply not getting enough people into jobs.’
Mrs Harrison, who was awarded a CBE in 2010, boasts that she lives in ‘utter luxury’ in a 20-bedroom mansion in the Peak District.
She also owns a £3million mews house in central London and a £75,000 holiday home near Skegness.
Her activities have come under intense scrutiny since the Daily Mail revealed on February 10 that she had paid herself a dividend of £8.6million last year, despite her firm’s failure to meet targets on finding jobs for the unemployed.
MPs on the Public Accounts Committee reacted in horror at what they saw as excessive fees being paid to the firm for very little risk.
On Sunday it emerged that the firm’s office in Slough, Berkshire, had been raided by police on February 17.
The Mail was contacted by a string of whistleblowers who said that signatures were forged and blank timesheets submitted as proof of work completed.
On Wednesday the Mail revealed that Thames Valley Police had arrested four former A4e staff on suspicion of defrauding the taxpayer.
They have been accused of rip-offs totalling tens of thousands of pounds and will answer bail next month.
A4e, which vigorously denies wrongdoing, said police were also investigating allegations of fraud involving a subcontractor on one of the back-to-work contracts it manages.
The Department for Work and Pensions said it had launched nine investigations into alleged fraud at A4e since 2005. In five cases the firm was ordered to repay thousands of pounds to the taxpayer after evidence of ‘irregularities’ was uncovered.
The Serious Fraud Office has also been urged to investigate.
A4e says it has a ‘zero tolerance’ approach to fraud. The company insists that it has rigorous processes in place to prevent wrongdoing.
Last year the firm’s entire £180million revenue in the UK came from state contracts, although it also does some business abroad.
The DWP insists that the Work Programme is much less susceptible to fraud than previous back-to-work schemes because contractors receive the bulk of their payments only after individuals have been placed in work for several months.
Two fraud inquiries… yet two more deals for her firm
Conflict of interest: Mrs Harrison, pictured with husband Jim, is facing another probe over the awarding of a contract to her firm to advise on how to get problem families into work
Ministers are facing fresh questions about the Government’s links to Emma Harrison after it was revealed yesterday that her firm was named as ‘preferred bidder’ on a £15million state contract.
A4e is understood to have secured the lucrative contract with the Skills Funding Agency to provide education to prisoners in London and help them find work on release.
After quitting yesterday as David Cameron’s back to work tsar, Mrs Harrison is also facing allegations of a conflict of interest after it emerged that A4e had won a separate deal to advise on getting problem families back to work.
The decision to carry on awarding contracts to A4e comes despite calls for the firm’s Government deals to be suspended pending the outcome of two police investigations into allegations of fraud.
Margaret Hodge, chairman of the Commons Public Accounts Committee, said it would be ‘unacceptable’ for the Government to issue new contracts to a company being investigated by the police for fraud.
A4e declined to comment, saying the Skills Funding Agency contract was ‘not yet in the public domain’.
The agency, a quango overseen by the Department for Business, Innovation and Skills, confirmed that contractors had been informed of the decision on Monday, but said there would be a ten-day cooling off period before the deal is finalised. A formal announcement is expected next week.
To add to the controversy, it emerged that an arm of A4e has also secured a Government contract with the Cabinet Office to advise on giving support to and finding jobs for ‘families with complex needs’. MPs said this appeared to conflict directly with Mrs Harrison’s former role as ‘family champion’, which had involved her advising the Prime Minister on helping 120,000 ‘problem families’ into work. In effect, they said she was recommending which firms should be used in the programme while her own company was bidding for the work.
Labour MP Fiona Mactaggart described the deal as ‘improper’.
The contract’s value has not been revealed and even though Mrs Harrison is standing down as Mr Cameron’s adviser, it will still be honoured.
Miss Mactaggart, a former Home Office minister who has asked the Serious Fraud Office to investigate A4e, said: ‘I am very surprised that this contract was ever let.
Mansion: Mrs Harrison’s £5million pile has 16 bedrooms, 100 acres of land, a pool, spa, a bar, a nightclub and a long dining table for banquets
‘I do not think it is right for an individual who has been given an important government role advising on an issue to be able to go on and bid for contracts in that area. Even the least corrupt person would be at risk of designing programmes that would favour their company.
‘Quite apart from any other issues involving her company it is improper for them to benefit financially from her role and I don’t think she had any choice but to resign.’
The Cabinet Office said the contract was originally granted in August last year. A spokesman said the deal was done with the company’s consultancy arm A4e Insight rather than the main firm.
It involves designing contracts for private companies bidding for taxpayers’ money to provide support to problem families – including helping them to find work – in four pilot areas in London, Leicestershire and Birmingham. The Cabinet Office confirmed that A4e would not be banned from also bidding for the work that results, although the councils involved would be able to ‘exclude’ it if they felt there was a conflict of interest.
A spokesman said ministers believed a potential conflict of interest would arise only if A4e actually won the contracts to help get problem families back to work.
A4e Insight is a wholly-owned arm of Mrs Harrison’s firm. Last night A4e said it would not bid for any contracts which result from the consultancy work.
A spokesman added: ‘The Cabinet Office contract resulted from an open and transparent bidding process.’
A4e has established itself as a key player in the initiatives by successive governments to use private sector firms to help the unemployed get back to work. MPs were told this week that the firm has won £224million in contracts from the Department for Work and Pensions alone since the election.
Last year its entire £180million turnover in the UK came from state contracts. A report by the National Audit Office found it had failed to hit targets for getting the unemployed back to work under schemes run by the last Labour government.Despite this it was appointed as one of five prime contractors on the Government’s flagship Work Programme which is designed to find jobs for the long-term unemployed. Half of its work is subcontracted to charities, generating millions in management fees.
The company even received a share of £63million in ‘termination fees’ after the DWP ended a previous back-to-work programme in which it was involved and replaced it with the new one.
Yesterday it also emerged that some of A4e’s jobseekers even worked unpaid in the company’s own offices for a month at a time.
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