A KEY plank of the Government’s widening participation policy became a “disaster waiting to happen” because ministers failed to take advice, according to MPs.

Ministers, focused on targets rather than quality and introduced individual learning accounts in a way which left them open to abuse, according to the Commons education and skills select committee.

The committee’s report says: “Presented with a manifesto commitment, and a single target of one million users, insufficient attention was given to the reasons for the previous rejection of an ILA scheme and to ensuring that quantity was balanced by quality.”

The Department for Education and Skills failed to heed a warning from the Further Education Funding Council that quality controls needed to be in place or public money would be at risk.

The committee was unable to reach a conclusion on the questions members posed about the part played by the Treasury in the original decision to abandon ILAs.

Some MPs felt that the real reason for closure was Treasury pressure after the popularity of ILAs drove the scheme over its pound;201 million budget by more than pound;60m.

The report says: “Without access to the detailed notes of confidenial discussions between Treasury and DFES officials, we cannot know how large a part the desire to rein in over-spending played in the demise of the ILA. This is not a satisfactory position.”

“We regard the failure of the DFES to learn from the mistakes made in the past by its predecessors and other government departments to be one of the most disturbing aspects of the ILA experience,” says the report.

“Surprisingly, the potential expertise of Capita in designing systems to be fraud-resistant was neither called upon nor delivered.”

The lack of quality control on training was clear from the way the system was set up, according to the committee.

It said: “We find it hard to credit that Capita should not have pointed out that, without a quality threshold for providers, the ILA was a disaster waiting to happen. The culpability of Capita was matched by that of the department, in particular for not demanding more robust anti-fraud mechanisms in their specification.”

In any case, it remains to be seen whether fraud really was widespread. As yet, police inquiries do not substantiate the idea that millions of pounds have been stolen.

The committee recommended private providers be compensated for the effects of the early closure of the scheme. ILAs were already due to be scrapped when the plug was pulled on November 23, two weeks early, as the result of a criminal allegation about a stolen disk of ILA numbers. Police have still to decide whether this allegation is worth investigating.

“We recommend that the department should at least reimburse those bona fide learning providers who can demonstrate that they have been financially disadvantaged by the accelerated date of closure of the scheme,” said the report.

“The department should appreciate that the way the date for closing the ILA was brought forward caused a great deal of difficulty for many learning providers, both large and small.”

The viability of a replacement scheme could depend on keeping the providers on board, the committee points out, and many may not be prepared to take the risk.

The committee rejects the tough stand taken by John Healey, adult skills minister, who said there would be no compensation. The Government’s responsibility is particularly acute, the MPs argue, because of the false market which was created by ILAs.

“The committee notes the contrast between the department’s continuing co-operation with Capita and its refusal to consider compensation for learning providers.

Other ministers were culpable. ILAs were launched when David Blunkett was education secretary and before John healey became adult skills minister.

“We are not satisfied that the Government understood, at a sufficiently early stage, the effect of the sudden closure of the scheme on providers. Many of the smaller and more innovative ones may be unwilling to risk entry into a second ILA scheme without a contractual arrangement with the department.”

While providers deserved better treatment, ministers should think twice about allowing Capita to run the successor to ILAs, it says.

The MPs say the Government was so preoccupied with getting a million ILA-holders signed up that it failed to be specific about what the accounts were actually for.

“We are not convinced that the Government had adequately clarified the precise educational and social objectives of the scheme. With a fixed target in terms of the number of accounts, though, it was clear that the delivery mechanism had become confused with the educational objective.”

The select committee report says the replacement for ILAs should be focused on adults whose qualifications are below level 3.

And it adds: “Particular efforts should be made to promote the scheme through employers, trade unions, community groups, approved training providers, schools and colleges.”

In conclusion, the committee says it supports plans to replace ILAs, stressing that the principles behind the scheme remain sound, but says the successor should be better-targeted and more secure.

“We support ministers in their determination to learn the lessons from the collapse of the first version of ILAs, and to bring forward as soon as practical a more robust version which is capable of expanding adult learning, to the benefit of the learner and the nation.”

THE RISE AND FALL

* July 25, 2000: Capita wins the contract to run individual learning accounts

* May 2001: the target of a million ILAs is reached

* October 24, 2001: The Department for Education and Skills announces ILAs are to close on December 7 because the scheme had exceeded its capacity and given rise to concerns about value for money

* November 23, 200: ILAs close two weeks early because of new allegations about a stolen computer disk

* December 7, 2001: ‘The TES’ reveals MPs’ doubts about whether fraud, rather than Treasury pressure, was the reason for closure

* December 18, 2001: Sylvia Iwaugwu, 25, appears in court. She remains the only person in the UK convicted of ILA fraud

* March 1, 2002: adult skills minister John Healey is likened to Scrooge by the Commons education and skills committee chairman Barry Sheerman for failing to compensate providers

* March 8, 2002: police confirm just pound;50,000 of alleged fraud has resulted in 13 prosecutions in total

* April 29, 2002: Cheshire police confirm they are no further forward on the computer disk case

* May 1, 2002: the report by Mr Sheerman’s committee says: “We cannot know how large a part a desire to reign in overspending played in the demise of the ILA.”

FINDINGS

Abuse could have been predicted

Targets given priority over quality

Real reasons for closure are unclear

Ministers failed to act on advice about quality

The DFES failed to define ‘misuse’ and ‘abuse’

RECOMMENDATIONS

Providers must be compensated

The replacement should target adults who have not reached level 3

The new ILAs should have clear educational objectives, should fit in with wider lifelong learning strategy and should be set up as soon as possible.