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Wednesday, 23 January, 2002, 13:32 GMT
Learning accounts 'not robust enough'
The popularity of the scheme outstripped expectation
The government training grant scheme was not robust enough to stop fraudsters taking advantage, Department for Education officials have admitted.

Giving evidence to the Commons education select committee, senior civil servants with responsibility for the suspended individual learning accounts (ILAs) would not be drawn on when the scheme would be reintroduced.

Derek Grover
Mr Grover said the system was not sufficiently robust to prevent fraud
The scheme, which provided accounts worth up to 200 a year, was suspended across the UK at the end of 2001 amid allegations of widespread fraud.

It has been alleged that unscrupulous training providers offered sub-standard courses - or none at all - while claiming the full 200 from the government.

But the final straw was the discovery that account numbers had been stolen from the database operated for the department by Capita, then offered for sale.

The cross-party select committee, chaired by Labour's Barry Sheerman, has already had an admission from government ministers that the cost of the botched scheme to the taxpayer was unknown.

Now senior civil servants Peter Lauener, director of the department's learning delivery and standards group, and Derek Grover, director of adult learning, were accused of having had no antidote to frauds which were "out of control".

The pair were criticised for not consulting with other government departments, such as the Department for Social Security and the Treasury, which had experience of preventing fraud.

Bogus providers

Asked why the department had not simply closed down the bogus training providers, allowing the vast majority to continue, Mr Grover said there had been no practical way of identifying them.

It was easy to register as a training provider, Mr Grover told the committee, and often those who were struck off simply went back into business under another name.

Peter Lauener
Peter Lauener: Unable to say when the account will be reintroduced
"It's clear from what's happened that the old system wasn't robust enough to deliver the programme that is intended to be delivered," Mr Grover said.

The committee heard how the Department for Education - when the abuse was first brought to its attention - had introduced a provider agreement, where trainers had to sign up to various standards of practice.

And learners were given additional advice about "the sorts of things they should consider" in deciding what courses they wanted to undertake.

"But it did become apparent that the way the scheme was structured wasn't sufficiently robust to enable us to tackle the problems that were emerging," said Mr Grover.

Mr Lauener said any future schemes would offer greater quality assurance arrangements.

Fix it

Unimpressed by the civil servants' answers, Mr Sheerman demanded to know why the scheme could not have been fixed rather than abandoned.

"Wouldn't less damage have been done to the whole process of individual learning and individual learning accounts if you'd actually fixed it?

Barry Sheerman
Barry Sheerman: Why didn't they fix it?
"A temporary halt, but fixed it - rather than first of all we were told it was frozen, then it was ended, and now you've got to reinvent it with a big gap that is doing a lot of damage both to providers and learners."

Mr Lauener said it would have been more damaging to have had a gap, made changes, reintroduce it then have more problems.

"I really do think we have to get the whole story, get right to the bottom of the problems we've had and make sure the problems we've had can't reoccur," he said.

Mr Sheerman said the department would be under greater fire if it was found the problem could have been fixed and "all the pain and suffering that providers and learners have been going through was unnecessary".

When will the scheme resume?

Mr Lauener said ministers were committed to introducing a new ILA scheme, but would not say when.

"It is too early to say. Until we have got this full account of what happened, until we've got to the bottom of all the problems there have been, I don't think we can put a date on that."

Mr Sheerman said this was the least satisfactory answer that had been given.

"There are a lot of people out there going out of employment, going out of business," he said.

Surely it was not so difficult to get a relatively modest scheme back on the road.

Mr Lauener said, while there was a commitment to get the scheme going again, the department would face even further criticism if they gave a date and were then unable to meet it.

The BBC's Kim Catcheside
on "the Great Training Robbery"
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