Fraud fears over brokers

3rd February 2006 at 00:00
LSC forced to reassure MPs that business links scheme will not be a waste of money. Joseph Lee reports

MPs have demanded assurances that a planned pound;35 million-a-year system of brokers for work-based learning will not repeat the mistakes of individual learning accounts.

Mark Haysom, chief executive of the Learning and Skills Council, which will fund the scheme, came under pressure from a House of Commons select committee worried that millions could be wasted on a plan to hire middlemen to link colleges and training companies with businesses.

The Commons public accounts committee is concerned that brokers for Train to Gain, the pound;700m national scheme to fund workplace training, risked turning into an "old boys' network" for up to 1,000 brokers.

Richard Bacon, Conservative MP for South Norfolk, compared the proposal to the Department of Trade and Industry's consultancy brokerage service, which closed in 1995 before it was ever opened, costing pound;3m.

He suggested it also had the potential to repeat the failure of ILAs. Under that scheme, which provided subsidies of up to pound;200 to individuals to pay for training, bogus companies were able to siphon off public money.

Mr Haysom said: "This is not something which we have just dreamed up. We have been working on it for a number of years and have accumulated a lot of experience. From that experience, we have confidence and the ability that this system will work."

Brokers would be monitored very closely to ensure that they were effective and to remove any possibility of corruption or favouritism, he said.

MPs suggested that colleges could successfully make links with employers on their own. They pointed to the example of East Berkshire college, which introduced two new modules to its motor vehicle courses after visiting every local employer in the industry.

But Mr Haysom said: "I'm not suggesting where there is an existing good relationship between employers and a college that we get in the way of that: we will target new people.

"There are some sectors which are very, very difficult and some sectors we need to work harder on. I don't think every college can visit every single employer. I'm not sure how practical it would be."

Train to Gain, which will be launched nationally in April, has been operating as a pilot system for level two qualifications (GCSE or equivalent) in selected parts of the country since 2002.

A government-commissioned report this month revealed that about 90 per cent of the money simply replaced cash that businesses would have spent themselves. But the LSC said that the report only looked at the early stages of the pilot. The work of brokers and a new focus on small firms will improve results, it claims.

Ministers have also increased their commitment to the scheme, announcing that employees will be able to skip level two qualifications and move straight to level three (A-level or equivalent).

Phil Hope, the skills minister, told the House of Commons earlier this month that those entering the programme at level three will receive the same level of support as those on the lower level. However, there will be no separate funding for level three "jumpers", he said.

An extra pound;40m will also be spent over two years on a pilot programme in the West Midlands and north-west England to help those who have already earned level two qualifications progress, Mr Hope said.

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