Labour heads off New Deal fraud;FE Focus

1st May 1998 at 01:00
Senior Government officials have taken steps to prevent fraudulent claims under the New Deal for young unemployed adults.

Michael Bichard, permanent secretary at the Department for Education and Employment, moved to reassure MPs in the all-party Public Accounts Committee this week. At the start of the initiative, "100 per cent" of invoices would be checked, he said.

Almost pound;15 million was incorrectly paid by training and enterprise councils to providers of training schemes last year, he admitted, almost three times the level in 1994.

His efforts to reassure MPs came as he confirmed that TECs were running deeper into financial trouble. Eleven of the 72 had failed to reach "low risk" status and could lose their licences if they fail to produce an action plan within six weeks. One TEC has had a breach notice served on it after failing to satisfy Government regulations.

Mr Bichard told the committee seven were at "medium risk" and four at "high risk". The TEC in breach of its contract has until the end of September to recover.

His department had logged 106 cases of financial irregularities involving TECs, though not all had been substantiated. Police were holding 12 investigations and there had been two prosecutions. "We are spending pound;10m a year on controls," he said.

MPs also questioned Mr Bichard about the level of TEC reserves which had risen from pound;230m in 1995, to pound;260m in 1996 and pound;280m the following year. "The level of TEC reserves are higher than we would wish. The TECs have admitted that pound;139m is for forward commitments but we think this is too high.

"We are undertaking a detailed analysis of these reserves TEC by TEC to find out what is a reasonable commitment." He said the proposal to take pound;150m from the reserves to pay for new individual learning accounts would not affect the TECs.

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