New allegations have emerged about the US multi-national that has secured several major contracts from the Department for Work and Pensions (DWP), just as it begins to deliver the controversial “fitness for work” test on behalf of the UK government.
DWP has been dismissing concerns about the troubled history of Maximus – which has a lengthy record of discrimination, incompetence and alleged fraud in the US – since Disability News Service (DNS) revealed last year that the outsourcing giant was in line to win the contract to deliver the work capability assessment (WCA).
But a new documentary has now been aired in Australia by the state broadcaster ABC, which claims widespread exploitation and manipulation of government contracts within the Australian welfare-to-work industry, similar to concerns raised in the UK.
One of the providers highlighted in the programme is MAX Employment, which is owned by Maximus.
But DWP made it clear this week that ministers were not concerned about the programme and would not be investigating the allegations concerning Maximus, which has quietly become one of its biggest providers of services.
The investigation by ABC’s Four Corners programme claims that MAX Employment put unemployed clients through pointless training courses in order to receive payment from the Australian government, and claimed government money for putting 141 people through a training course in Sydney, when the room was only able to take 15 people.
Four Corners also claimed that MAX Employment had “parked” many clients who were thought to be harder to place in jobs, and made little or no attempt to find them work.
And the programme alleged that Maximus had taken part in the apparently widespread practice of placing unemployed people in jobs the company knew would only be temporary because they came with short-term government wage subsidies.
When the subsidy period of 12 or 26 weeks ran out, the client would return to unemployment, while Maximus would send the employer another client to begin a short-term subsidised position.
The Australian coalition government appeared to accept some of the programme’s claims when it said in a statement published on its website that the welfare-to-work system introduced by the previous Labor government had been “fundamentally flawed”.
Reforms, due to be introduced on 1 July, will “safeguard against abuse”, said Luke Hartsuyker, the assistant minister for employment.
Lisa Miles, senior vice-president for corporate communications for Maximus, told Disability News Service that she was not worried by the programme’s claims.
She said: “We would stand by our delivery in Australia. We have consistently been one of the top performers.”
She said that MAX Employment had been under a “contractual obligation to involve those 141 people in the training programme”, and that they had not all been on the course at the same time.
She said that some of the 141 people did not complete their training because the government contract ended and the training was no longer required.
Miles denied that the “unfounded” allegations had come at a bad time for Maximus, with its delivery of the WCA contract beginning only this week in the UK. It also faced nationwide protests by disabled activists as it started provision of the WCA.
She said: “We would disagree with the allegations that were presented in the story. Again, we stand by our performance in Australia.
“They have gone through a full audit on a variety of things. A lot of that piece referred to the older contract. Two contracts ago.”
She added later in a statement: “There has never been a training scam in any of MAX Employment’s sites.
“The issue raised in the story was addressed by the Department of Employment back in June 2009.
“The training in question was a contractual requirement under our prior contract. Also, the former employee that was interviewed did not work on the contract that ended in 2009 so she would have no knowledge of the actual contractual requirement.
“Also, ‘parking’ is not something that has ever been used in MAX Employment and is completely contrary to the ethos of the company.
“As I mentioned on Monday, we stand by our work and we’ve placed more than 275,000 job seekers in employment over the last six years.
“At no time has there been a contractual breach and MAX Employment has always operated with integrity and impeccable ethics.”
A spokesman for the Australian Department of Employment told DNS: “The department does not comment publicly on current investigations, as to do so might prejudice or jeopardise legal proceedings.
“The statement provided to Four Corners details the department’s rigorous processes in place to deal with allegations of misuse of funding and fraud.”
Maximus has not only begun to deliver the WCA contract in the UK, but it has also won – or is in a position to take over – a series of other multi-million-pound employment support and assessment services for disabled people.
It is one of the main Work Programme providers, and last year was awarded two further DWP contracts: to run the new Fit for Work service and to take over provision of WCAs from the much-criticised Atos Healthcare.
But Maximus is also in competition with the education, employment and training services group Prospects to buy Remploy, which would hand it control of contracts to provide mental health support in the workplace under the government’s Access to Work scheme, and to help disabled people into work through DWP’s Work Choice programme.
The winning Remploy bidder is set to be announced later this month.
A DWP spokesman said: “Ministers are concerned primarily with Maximus’s performance in relation to its contract with the DWP here in the UK – we don’t have any plans to launch our own investigation into the Australian Broadcasting Corporation’s claims.”
He had said earlier: “Our understanding is that Maximus dispute the contents of the programme – but you would need to speak directly to the company to get its position on the specific allegations made.
“The contract awarded to Maximus is part of a concerted drive to ensure that people who need an assessment get the best possible service and are seen in the quickest possible time.”
He added: “Maximus were selected following a rigorous procurement exercise and the department’s belief in the company’s ability to deliver on its contract is based on that.
“The DWP’s focus is on getting down waiting times and improving the quality of service for claimants here in the UK, and progress on that score is what ministers will be looking at in order to assess Maximus’s performance.”
Caption: Maximus’s UK headquarters are on the first floor of this building in central London