ERRORS, malpractice and overpayments continue to blight the work of training and enterprise councils, according to the Public Accounts Committee.

The latest financial report - the fourth since TECs were established - reprimands the Department for Education and Employment for failing to deal with the backlog of financial irregularities which has beset TECs.

The report follows the news that Britain’s 78 TECs can plan for the future for the first time in their eight-year history, as they are likely to exist for at least another three years.

However, the Public Accounts Committee is concerned by TECs’ financial management. It says TECs are squirrelling away too much cash - in the two years to 19967 reserves rose from Pounds 230 million to Pounds 285m while overpayments to TECs increased by Pounds 6m during 199697 to Pounds 14. 6m.

The committee is also concerned at the mounting list of suspected irregularities, mainly concerning deficiencies in national vocational qualification assessments.

It warns: “Such bad practice could, if unchecked, undermine the credibility of the system.” Of the 39 cases currently being pursued involving a total of Pounds 6.7m in payments, 12 are being investigated by the police.

The committee chairman, David Davis MP, said: “Over the years we have been promised improvements in the financial control of TECs which have not been delivered. If anything the position has deteriorated.”

The TEC National Council says that steps are already being taken to reduce the risk of fraud. Acting chief executive Mary Lord said: “Any fraud is too much fraud, but cases under investigation involve less than 0.5 per cent of the 500,000 trainees that TECs and their providers work with each year.”

The committee’s judgment comes a week after first reports from the Government-appointed inspectorate, the Training Standards Council, revealed wide variations in the quality of work-based training schemes.

Only a third of the training offered at the 14 centres inspected was deemed good or outstanding and significant weaknesses were found in the management and assessment of programmes.

Courses are graded along similar lines to the Further Education Funding Council college inspections from 1 to 5 - from outstanding to poor. Overall, 90 per cent of the occupational training was found to be satisfactory or better but equal opportunities, trainee support, management of training and quality assurance received several less than satisfactory grades.

David Sherlock, the council’s chief executive, said the reports showed “the best and the worst that can be achieved”.

“Ministers’ fears about irregularities are justified. We are finding too many unqualified assessors and internal verifiers and some cases where trainees deny that they did the work in their own NVQ portfolios.”

The council will inspect around 2,000 training providers, mainly training and enterprise council-funded organisations, once every four years. Centres with unsatisfactory grades will be reinspected within a year.

Mr Sherlock said the outspoken nature of the reports showed the council’s determination to deal with poor providers.

Mr Sherlock said: “The challenge is first to get everything up to a satisfactory level, and then to steadily build excellence. We have seen wonderful training in areas as diverse as dance and truck-driving. Most training providers are dedicated people trying to do a first-rate job often in difficult circumstances. I am optimistic that this sector can take the lead in fulfiling the Government’s plans to create a learning society.”