Individual Learning Accounts frauds could cost £60m

7 Nov 02
David Normington, permanent secretary to the Department for Education and Skills, has admitted he was 'ashamed' by the DfES's involvement in the Individual Learning Accounts debacle and revealed it could cost taxpayers up to £60m.

08 November 2002

Normington, who was appointed after allegations of widespread fraud involving ILA training providers was made public, said the department would not know the full extent of any fraud-related losses for two years because of ongoing police inquiries.

Police were investigating more than 100 cases of fraud, but only one provider has been prosecuted.

Appearing before the Public Accounts Committee on November 4, Normington said the DfES had learned many lessons from the affair. 'I am ashamed of it on behalf of my department. It is as bad a case [of incompetence] as I can remember.' Later he added: 'At the most, we believe it could cost around £60m.'

The government set up the £273m ILA scheme in 1997 to subsidise the cost of courses for adult learners – up to the value of £200 each. But it was abruptly closed down in November 2001 when it emerged that some unscrupulous providers had claimed hundreds of thousands of pounds from the department without offering prolonged courses.

Normington admitted that the DfES 's obsession with achieving 1 million account-holders meant officials did not question the incredibly high 'public' take-up of the scheme.

He also accepted the National Audit Office's criticism that the department continued to operate the scheme despite being warned of weaknesses in its contract with private operator Capita.

Capita's executive chair, Rod Aldridge, told MPs the company had warned the DfES that the project was flawed, but he accepted that he 'had not shouted loud enough' about problems to ministers.


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