Jobs agency at centre of fraud probe is preferred bidder to run discrimination helpline
By David Hencke | 3 April 2012
Jobs agency A4e is being lined up for another major government contract despite being at the centre of a fraud investigation, Exaro can reveal.
Ministers have made the company – owned by prime minister David Cameron’s fallen ‘family champion’ Emma Harrison – the preferred bidder to take over the sensitive Equality and Human Rights Commission (EHRC) helpline to advise people of their rights in discrimination cases.
The disclosure comes after ministers ordered an audit of all Whitehall contracts with A4e to run alongside two current police inquiries into allegations of attempted fraud involving the company. The Department for Work and Pensions (DWP), which provides most of A4e’s UK income, is also investigating.
A4e has been “preferred” over Sitel, which ran the disability helpline for the EHRC before it was taken in-house, and Vertex, an outsourcing company, and the Citizens Advice Bureau.
The privatisation of the helpline was not sought by EHRC management, but by the Home Office and the Government Equalities Office.
The helpline costs £2.1 million a year to run, employs 85 staff in Birmingham, Cardiff and Glasgow, and handles 50,000 calls and 15,000 e-mails every year. Staff are trained to provide detailed advice on discrimination issues covering disability, gender, race and sexuality, and advise on mediation services. One service, which supported disabled passengers acting against operators that they said breached a European Union directive protecting their rights when travelling by air, ended abruptly last month.
Such passengers contacting the EHRC have been told: “Unfortunately due to our funding being cut, we are no longer able to offer conciliation for cases related to EC Air Regulations 1107. Therefore, we are unable to intervene in your case.”
Despite government guarantees that existing staff can apply to keep their jobs, many will be laid off because they are disabled themselves and will not be able to relocate easily from Cardiff and Glasgow.
Mark Serwotka, general secretary of the Public and Commercial Services Union, which opposes the privatisation, said: “Speculation about A4e’s involvement in plans to privatise the EHRC helpline have fuelled concerns about what is a totally unnecessary and damaging sell-off.
“Instead of selling this vital lifeline for some of the most vulnerable people in our communities, the government should be investing to ensure people get the help they need, particularly at a time when its wider spending cuts are threatening to make our society even more unequal.”
The EHRC said: “The decision to outsource the information, advice and guidance service was taken by the Government Equalities Office. This followed their review undertaken in late 2010.
“The commission was consulted on the tender specification and was asked to score one question on the tender responses.”
The Home Office defended the privatisation, saying: “The new advisory and support service will offer more in-depth support than the EHRC’s helpline. Funding for free legal advice on discrimination will continue to be available through legal aid.
“The decision to stop funding the EHRC’s helpline and grants system was taken because they did not represent value for money or support the commission in carrying out its core functions.”
In a statement to Exaro, A4e said: “The Home Office procurement process for this contract has not concluded as yet. We have not been informed that we are a preferred bidder. Given that the process is ongoing, you would not expect us to comment on the detail of our bid as it is commercially sensitive.”
A4e receives up to £180 million in taxpayers’ money per year from government contracts. Emma Harrison quit as chairwoman of the company, which she set up, and has stepped down as the coalition government’s ‘family champion’, a voluntary role aimed at helping long-term unemployed families. This followed the firm’s decision to call in independent auditors to check its accounts.
Thames Valley Police has arrested five former employees on suspicion of fraud as part of its ongoing investigation. There are two police investigations into allegations of fraud linked to the company, although one is believed to involve a subcontractor.
A leaked internal audit report concluded: “Potential fraudulent or irregular activity is not confined to one particular geographical area… and shows a potential systematic failure to mitigate the risk towards this behaviour at both an office and regional level”.
The audit further noted: “Management information in relation to the effectiveness of existing controls is minimal.”
A4e said in a press statement earlier this month: “The board has made consistently clear in all previous statements that we take any allegations of fraudulent or otherwise illegal activity extremely seriously. There is absolutely no place for this type of misconduct at A4e.
“We obviously acknowledge the concerns raised by DWP, and we welcome and will co-operate fully with their planned investigations.”