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February 24, 2012 7:31 pm
Emma Harrison has stepped down as chairman of A4e, capping a week of growing pressure on the embattled welfare to work provider.
The announcement that Ms Harrison was relinquishing the helm of the company she founded more than 20 years ago, and of which she retains an 85 per cent share, came just a day after she resigned as the prime minister’s “family champion”.
A4e has appointed a leading law firm to conduct an independent audit of its controls, as the company, which operates in nine countries, struggles to control the damage from a string of disclosures. First it emerged that police were investigating fraud allegations following the arrest of four former employees. Then the company confirmed that since 2005 it had been investigated a further eight times for alleged fraud, with one inquiry leading to a conviction.
The furore has emboldened critics of the government’s welfare to work programme and led to Labour calls for the suspension of A4e’s contracts to deliver the flagship Work Programme until the allegations have been fully investigated. In a statement, Ms Harrison said she was leaving as she did not want the “continuing media focus” on her to be a “distraction” for the company.
Andrew Dutton, A4e chief executive, said Ms Harrison was “devastated” to be quitting the group, which would “not exist but for [her] passion and ambition”. She had “helped improve the lives of thousands of people, and has been an inspiration to all our staff and customers for more than 25 years”.
Mr Dutton also announced that, in order to reduce ”speculation and uncertainty”, he had appointed White & Case, the international law firm, to conduct an independent audit of A4e's controls and procedures.
The review will be carried out with the company's funders, including the Department for Work and Pensions. “I have asked White & Case to carry out their review as quickly as possible,” he said.
“It is of paramount importance to myself and the A4e board that the ongoing press speculation is laid to rest as quickly as possible, and I believe this independent review will answer the concerns raised over recent weeks,” he added.
The DWP said: “Anything that ensures increased transparency in relation to their government contracts is to be welcomed.”
Jim Carley, who worked for A4e for eight years and is now managing director of Carley Consult, a public procurement consultancy, raised the prospect that the company might be sold or merged with another welfare to work provider. Mr Carley said: ”This is going to be a shock for our sector...She’s the matriarch of welfare to work. A4e has been there since the beginning and she’s been there since the beginning. In this industry when it comes to big personalities, there is none bigger than hers.”
He added: “If you’re the owner of a £200m business, and not actively involved [anymore], that would potentially lead to selling the business. This may change the dynamic completely.”
A4e, he said, was “one of the few companies out there that is still buyable. But it would have to be someone with pretty deep pockets,” he added.
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