CONFUSION rather than fraud explained why many of the people using individual learning accounts found their money had already been spent, according to the Government’s own research.

ILAs were closed in November because the system had become the victim of widespread fraud, according to the Department for Education and Skills.

But Leeds-based York Consulting, hired by the department to assess the scheme before it was abolished, showed some of the money which appeared to have gone missing had in fact been spent by ILA account holders themselves.

“We asked all redeemers if they knew that they were opening an ILA when they enrolled on their first course,” said the report, which was completed in September by researcher Jane Owens. “Almost one-third of respondents were not aware that they were opening an ILA.

“The proportion of redeemers who were not aware that they were opening an ILA (31 per cent) is identical to the percentage who said they first heard about ILAs through a learning provider. Their responses may reflect the fact that some providers enrol individuals for courses and tell them that they can get a reduction in costs rather than informing learners that they are opening an ILA.”

The report also shows ILAs were mainly used by people who already had post-16 qualifications and were outside the intended target group. Of those who were questioned, 58 per cent had attended a college course, 23 per cent had been in higher education and 20 per cent had been on a taught course leading to a qualification within the previous 12 months.

A further York report, completed in January by Ms Owens, found 27 per cent of people who knew they had opened an ILA account found the money had gone when they tried to use it. While accepting this could have been evidence of fraud, York Consulting believed that the most likely explanation was problems with the quality of data provided by Capita, the company which administered the scheme under contract with the DFES.

The second report suggested most of those who used ILAs might have signed on for their course without government funding.

Fifty per cent agreed with the statement: “Without the ILA I would not have been able to pay for the course”, but 62 per cent said: “I would have chosen to take the course even without ILA funding.”

The second report also confirmed the picture about previous qualifications, saying: “Most ILA account holders contacted through this survey possessed qualifications and had undertaken some form of learning since leaving school.”

Rumours have circulated about millions of pounds worth of ILA fraud since the scheme was scrapped. Sylvia Iwuagwu, 25, of no fixed abode, remains the only person in the UK to be convicted of ILA fraud, having pleaded guilty to pound;9,396 of theft from the fund.

Eleven other people have been charged with conspiracy to steal ILA money as the result of a separate investigation by the National Crime Squad. They are due before Northampton magistrates on February 19.

Fraud had already been given as the reason for scrapping ILAs when, in November, their closure was brought forward by weeks because of “serious and sustained” allegations.