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Last Updated:  Thursday, 3 April, 2003, 23:21 GMT 00:21 UK
Ministry blamed for learning fraud
Adult literacy course
Courses in adult literacy were subsidised
Education officials who took short-cuts and ignored risks are being blamed for a learning scheme fraud which cost tens of millions of pounds.

In the latest report on the scandal over Individual Learning Accounts (ILAs), MPs say the scheme was wide open to fraud.

The ILA scheme is said to have wasted 97m of tax-payers' money.

The new report - from the Commons' Public Accounts Committee - says education officials ignored warnings that the scheme was open to abuse.

MPs said officials were driven by the desire to cut red tape to attract new providers of courses and the desire to maximise the number of people coming forward for training.

Risk of fraud

The report concludes: "The department's risk assessment and risk management were not fit for the purpose, and were driven more by concerns that the scheme would not attract sufficient new learners.

"As a result, the department did not give enough weight to advice received on the risk of fraud and abuse and about quality of training."

The alleged fraud essentially involved companies claiming money from the government for courses they did not provide.

The scheme began in September 2000 and involved the government subsidising courses for adults in basic skills or subjects like computing.

Students paid a small contribution, with course providers claiming the rest of the fee from the government.

But tricksters are alleged to have claimed money for non-existent courses and to have used people's names to claim money without their knowledge.

The Public Accounts Committee said the department had decided against running checks on the quality of courses being offered, choosing instead to let the market control what happened.


In its report, the Public Accounts Committee said it did not think senior DfES officials had learned their lesson.

"Acceptance of responsibility is important but so is the need for accounting officers to provide convincing reassurance that weaknesses have been properly analysed and understood so that the necessary improvements can be identified and implemented," it said.

The department insists lessons have been learned.

A spokesman said the department was "very sorry for the difficulties some learning providers and learners experienced".

"Overall the delivery of ILAs fell a long way short of the standard the public has a right to expect.

"It was unacceptable and the department is in no doubt that serious mistakes were made and hard lessons are being learned."

"For all their faults ILAs unleashed a real appetite for learning particularly among people who would not normally undertake learning."

The Association of Colleges says it warned the government about the need for quality control.

The organisation's chief executive David Gibson said: "ILAs were a good idea, which went wrong because government did not apply the same controls to other training providers outside the public sector which it applies to colleges.

"We put in writing to the DfES our concerns that proper quality assurance arrangements should be put in place to secure the integrity of ILAs against misuse.

"That advice was ignored."

One third of ILA money mis-spent
30 Jan 03  |  Education
Millions lost on training scheme
25 Oct 02  |  Education
Ministers 'failed' in fraud scandal
01 May 02  |  Education
Tricksters target government scheme
10 Oct 01  |  Business

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