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Thursday, 25 October, 2001, 12:14 GMT 13:14 UK
Training accounts scrapped
pc user
Many people have had genuine training
Education ministers are scrapping the English operation of a UK-wide scheme designed to help people with training costs, following allegations of fraud.


There is growing evidence that some companies are abusing the scheme

Education Secretary, Estelle Morris
Individual Learning Accounts entitled people to a grant of up to 200 towards educational courses.

But there have been allegations that some registered training providers were manipulating the system to pocket the money while providing sub-standard courses or no courses at all.

The Department for Education said it was investigating about 6,000 complaints involving 279 training providers out of a total of about 8,500.

Police believe some of the alleged fraudsters are animal rights extremists who have netted "tens of thousands of pounds".

No more applications

On Wednesday the Education Secretary, Estelle Morris, told a committee of MPs the scheme was being suspended.

She said in a statement later: "The scheme is now closed to applications for new accounts, but learning begun by existing account holders will continue to be supported provided it is booked with the ILA Centre by 7 December."

Ms Morris said the rapid growth of the scheme had exceeded all expectations, "causing us to think again about how best to target public funds in this area and secure value for money".

But she also had concerns about the way some accounts had been promoted and sold.

"There is growing evidence that some companies are abusing the scheme by offering low value, poor quality learning.

"We are keen that this does not undermine what has been a very successful programme and so we are acting quickly to protect the interests of individual learners."

Animal rights extremists

The National Crime Squad, which has been working with the education department's special investigations unit, has said it believes that tens of thousands of pounds have been fraudulently obtained from the accounts.

Neil Giles, Assistant Chief Constable with the squad, said the "simple yet effective fraud" involved "some of the key players in the world of animal rights extremism".

"We suspect that the money obtained has been used to gain information on those involved in legitimate research and to fund the individuals own lifestyles," he added.

A spokeswoman said that 29 people had been arrested and released on bail.

The squad's investigation focused solely on animal rights extremism.

It realised that the learning accounts were being misused because it knew where people were on days they claimed to have been getting training.

Scams

Trading standards officers have had many complaints that some companies had engaged in aggressive - and sometimes dubious - selling techniques.

One common scam involved offering a computer course, but sending only a textbook worth 6.99, even though learners had signed away their 200 discount.

Other people have been tricked in their homes through cold-calling and doorstep selling, along with unsolicited e-mails.

As well as using trickery to gain individuals' account money, some companies have been forging people's signatures.

Individual Learning Accounts were introduced in the 1998 Budget as a way of tackling the skills shortage.

More than 2.5 million people had taken out accounts and the department says "the vast majority" received good training.

The Trading Standards Institute, which highlighted the problem, said that it was a "massive scam", but it was impossible to know how much money had been swindled.

Incidents had been reported as far afield as Warwickshire, Hampshire, Somerset, London and the Isle of Wight.

'Embarrassment'

The shadow education secretary, Damian Green, said the decision to suspend the accounts was a "severe embarrassment" for Ms Morris, coming as it did a few days after the government's U-turn on student grants.

"It is clear from the stories of ILAs being offered to passers-by on street corners that absolutely no control was in place about how taxpayers' money was spent," he said.

"This is yet another example of the government grabbing a quick headline, leaving the taxpayer to repent at leisure."

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The BBC's Sue Littlemore
"The government is scrapping the scheme because of fraud"
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