The woman appointed by David Cameron to help troubled families get off benefits and into work has a joint income with her husband estimated at more than £1.4m after building a business empire based on lucrative "welfare to work" contracts with government.

Emma Harrison, the chairman of A4e (Action for Employment), was celebrating another success that is likely to boost the company's profits, after it won five out of 40 new welfare contracts from the Department for Work and Pensions. The 40 contracts, worth an estimated £3bn-£5bn in total, are part of the coalition's new work programme, under which private companies will be paid by results for getting jobless people into work.

The news about the Harrisons' income will fuel a growing row over the extent to which the private sector is set to benefit increasingly from the prime minister's determination to widen its role in the provision of public services.

It will also stoke controversy over pay at a time when ministers are determined to be seen to be clamping down on what they say are unjustifiably high salaries in the public sector, such as those of council chief executives and others earning more than £100,000.

It emerged last week that another major player in the welfare to work industry, Serco, which has won two more contracts, had awarded its top executives bumper pay packets. Chris Hyman, Serco's chief executive, enjoyed an 18% rise to £1.86m, while Andrew Jennings, the finance director, received an increase of 7% to £948,295. The company's diverse range of contracts includes running several prisons, London's bicycle hire scheme and the Docklands Light Railway.

In a recently published report for the government, Observer columnist Will Hutton called for a fair pay code to be extended into the public services industry. He also called for details on justification of an executive's annual salary to be published and for more employees to become involved in companies' remuneration committees.

The report, which is being considered at the highest levels of government, said remuneration "must be brought back into the context of the pay of the rest of the workforce through the disclosure of the ratio of top to median pay".

Union leaders described the salaries earned by private entrepreneurs whose businesses were taking on government contracts as "obscene". They said private firms were queueing up to reap massive rewards from plans to open up the National Health Service to "any willing provider".

A4e's latest accounts show that Harrison, who lives with her husband in Thornbridge Hall, a 12th-century stately home in the heart of the Peak District, has an 85.5% shareholding in the Sheffield-based company. She receives a salary of £365,000 a year. On top of this, last year she and her husband received an additional £462,000 from A4e for the company's use of her home for conferences and administrative work.

Her husband received an additional £626,856 for the lease of another property to A4e.

Last December Cameron offered Harrison a role championing government efforts to help troubled families get back on their feet. "Emma and others will be helping to pioneer a new way of doing things: less bureaucratic, less impersonal, more human, more effective," the prime minister said. "Above all, treating the whole family as a unit, not just a collection of individuals.

"Now our side of the bargain of this is we will strip away the bureaucracy and give her, and the many others we hope will follow her lead, the freedom that you need to make a difference.

"Your side of the bargain, her side of the bargain, is to get these families back on their feet and, crucially back into work with all the dignity and self-esteem that that can bring. I really believe we can make a difference in this way."

Ministers believe the new work programme, which is due to start this summer, will be more successful in getting people off benefits because the private sector is expected to bring greater rigour to the system.

According to A4e's company accounts, the firm provides the majority of its services to government agencies and departments. Its turnover hit £190,990,000 and its profit increased 80% to £6.2m in the last financial year.

The company's accounts make clear that the current economic climate presents further opportunities. "We believe that pressure on public sector spending will further drive the need for governments to outsource specific areas to the private sector, which is an opportunity for us," it states.

Mark Serwotka, general secretary of the public and commercial services union PCS, said: "It's obscene that the bosses of private companies that get up to half their total revenue from the taxpayer are paid such astronomical salaries, and it ought to be a national scandal.

"Instead, the government has confirmed in the last few days, for example, that it wants to extend the influence of the private sector in our prison system by shamefully allowing them to make massive profits out of locking people up."

Dave Prentis, general secretary of the public services union Unison, said he feared that reforms of the NHS would lead to the same companies moving in to make big profits. "Health is not and should not be allowed to become a market commodity."

A spokesman for A4e said the £462,000 paid to Harrison and her husband for the use of Thornbridge Hall last year was part of a leasing arrangement covering several years. The spokesman added: "Over the past 20 years Emma Harrison has grown A4e from a small, Sheffield-based training business to one of the largest social purpose companies in the UK, helping unemployed people back into work.

"This has been a long journey, at times involving significant personal financial risk."