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Accounts blame game begins

Who was responsible for the individual learning accounts fiasco? MPs are trying to find out. Steve Hook reports

IT'S easy to be wise in hindsight: that was the line the Government took this week as MPs tried to get to the bottom of the individual learning accounts fiasco.

The Commons education select committee this week was looking at the demise of the ILA scheme which, the Government insists, was axed because of fraud, inappropriate selling and poor-quality training.

"Why didn't you spot that it was open to abuse?" Paul Holmes MP asked Peter Lauener, director of learning, delivery and standards at the Department for Education and Skills. "It is very easy looking back," Mr Lauener replied, to which Barry Sheerman, the chairman, chipped in: "No, it is not easy looking back." Mr Lauener shot back: "Well, it is easier looking back than looking forward."

Challenged to give a pledge that the firm Capita, which adminstered ILAs, would not be picked to administer their replacement, skills ministerJohn Healey refused.

He said the replacement scheme has a pound;70 million budget for the first year but could not say when it will start.

Capita has already insisted to the committee that it was operating within the Government's criteria. These included a low-level of security screening in order to encourage small training providers and those with little experience to get involved. It admitted that it would do things differently in future.

This week, it was the DFES's to criticise Capita. Mr Healey said he was not satisfied with the firm's performance but accepted that the Government shared responsibility and that lessons had been learnt.

Mr Healey will hope this spreading of blame, with neither the Government nor Capita entirely accusing the other, should save the reputation of both.

"There were shortcomings in security..." said Mr Healey. "There were shortcomings in the specifications which were the department's responsibility. We are withholding payments to providers where we have serious complaints. The overspend was pound;66.7m. That will be met within existing department resources.

"I deeply regret what we had to do. We had no other option. We had to freeze the system to protect public funds. We did so on police advice."

Initial reports that millions of pounds had been syphoned from the ILA fund by fraudsters remain unsubstantiated by police.

"Active prosecutions don't seem to be that large a number," said Mr Sheerman. "A criticism of your department is that it (the scheme) could have been fixed rather than cancelled ... You could have frozen the ones you had doubts about and let the good providers carry on."

Jonathan Shaw MP said: "It seems from all the evidence that you should have been asking yourselves whether the system was open to abuse and I think you could have made only one conclusion."

Mr Healey explained how the scheme had been sabotaged by "inappropriate selling" of training by providers not acting in the "spirit" of the scheme.

"Door-to-door selling of learning is not inappropriate," he said, drawing laughter from MPs - only for Mr Sheerman to point out that such tactics are standard when they seek votes.

The value of fraud for which charges have been brought is still believed to be under pound;100,000, although a national investigation led by West Midlands police could lead to more being uncovered.

It remains unclear whether the DFES's discovery of a disk containing ILA account numbers supposedly illegally offered for sale will be investigated by police.

Whatever the extent of fraud, it is clear that the scheme was flawed in terms of quality, with providers able to offer low quality training without breaching the rules.

In his written submission to MPs, Mr Healey said: "We need to build in stronger quality-assurance mechanisms so that we minimise the chances of unscrupulous providers benefiting."

He said that the replacement scheme would provide a better balance between quality control and the need to keep bureaucratic processes to a minimum so new learning providers and small companies would not be put off by the cost of participating.

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