David Cameron’s ex-adviser quit helm of A4e after outrage at her massive bonus pay dividends
Emma Harrison, founder of the welfare-to-work business A4e, has received a £1.375m windfall this year, despite the firm’s failure to meet the government’s minimum target for placing long-term unemployed people in work.
A former adviser to David Cameron on families, Harrison has been awarded the money in dividends, but is also paid as an employee of the firm, her husband disclosed. Figures issued on Monday showed that the firm, which makes nearly all of its money from public contracts, found permanent work for less than 4% of its unemployed clients – well short of the government target of 5.5%.
Harrison stood down as chair of the company in February amid widespread incredulity that the firm paid her £8.6m in dividends last year, but has retained 87% of the shares.
Margaret Hodge, chair of the Commons public accounts committee, said Harrison’s payments are “outrageous”. She added: “Given the appalling results published only last week for the work programme, this looks like an excessive reward for dismal failure. A4e make their living out of public money and they have yet to demonstrate they provide value. The figures make a nonsense out of the assertion from the company that Emma Harrison is no longer involved in A4e.”
Harrison’s latest payments were disclosed by her husband, Jim, in response to queries last week. Asked about recent dividends, he said: “In 2011 a total dividend of £1.125m was paid from April of that year, which, with the £250,000 from January 2012, makes a total of £1.375m for the financial year ’11-’12.” He said his wife was an employee of the firm and was paid dividends on her investments, on which she paid the full rate of tax.
Figures for the first year of the work programme showed that just two in every 100 people who enrolled in the scheme had been employed for six months or more. According to the government’s own calculations, 5% of long-term unemployed can be expected to find jobs for six months if left alone to do so. A4e, the second biggest contractor to the programme, with £438m of deals, was asked to find work for 108,750 unemployed people by this July. It found just 3,860 of them permanent jobs – a “success” rate of less than 3.6%.
A source close to Harrison said her dividend was justified because the success of the work programme cannot be measured in a single year: “Data published a year into a brand new programme that will run for years and deals with the most difficult-to-reach members of society is no benchmark for comments about failure or success.”
Harrison set up A4e, originally called Action for Employment, in Sheffield in 1991. She became a high-profile figure through reality TV programmes such as The Fairy Jobmother. After the coalition government was formed, Cameron made Harrison his “families champion”.
Harrison’s troubles came to a head in February. Police confirmed they had launched a fraud investigation into the firm’s Slough office and the Commons public accounts committee received allegations of fraud from whistleblowers. Amid pressure for the firm’s contracts to be suspended, Harrison resigned as Cameron’s adviser and quit as chair of the firm. Seven people have been arrested and bailed in connection with the Slough inquiry. Three years ago the Observer revealed a fraud inquiry into the company’s offices in Hull. Phillip Revell, a former A4e employee who had appeared in The Fairy Jobmother, was convicted last year of forgery offences totalling £3,580. Recorder Simon Bourne-Arton QC said he was one of a number who were suspected of involvement in fraudulent practices in the Hull office.
A spokeswoman for A4e declined to comment on Harrison’s dividends, saying she now has her own spokesperson. “As a private company, A4e’s annual accounts will be filed with Companies House by the end of the year, according to standard practice,” she said.