AN MP has demanded a full investigation after it emerged that back-to-work firm A4e had quit part of a contract with a North-East council after an employee forged learners’ signatures on official forms.

The company was a partner in Redcar and Cleveland Borough Council’s Elite project, which aims to get disadvantaged young people into education, training or employment and was set up in 2008 with £1m funding from the EU’s European Social Fund.

But it withdrew its involvement after a member of its staff, who subsequently resigned, was found to have invented signatures in an apparent effort to show it had placed more individuals into work or education than was actually the case.

A4e, whose millionaire chairwoman Emma Harrison recently stepped down after a string of complaints were levelled against the company, said there was no evidence of any criminal activity and it was simply a case of poor administration.

But Middlesbrough South and East Cleveland MP Tom Blenkinsop said he was not satisfied with its explanation.

He said: “There needs to be a full investigation into this case.

“This is public money here, and this must be looked into to restore confidence into all regeneration projects carried out locally.”

Last night, Labour councillor Ian Jeffrey, who was the lead member for children’s services and education at the council at the time of the contract, in 2010, said: “I would have expected these allegations to have been brought to my attention and, if it had been, I would have wanted to know more detail about the circumstances.

“I am unhappy about the increasing trend to resort to the private sector to deliver these kind of services.

“I am also uneasy about the profit being generated by these kind of organisations which should be put back into public services, particularly in these times of austerity.”

A spokeswoman for A4e said: “We take any evidence of maladministration extremely seriously. The individual involved admitted she was the only person involved and had undertaken this activity of her own volition.”

The spokeswoman said that the council had carried out an audit of A4e’s work on the contract and was satisfied that it was a “one-off incident”.

A council spokesman confirmed that part of the contract had been discontinued with A4e after scrutiny regarding some of its work.

It is understood the firm no longer has any direct involvement with Redcar and Cleveland council-managed projects.