Progress in pound;10m fraud inquiry
Police prepare prosecutions in alleged conspiracy to defraud learning account scheme. Steve Hook reports
Police are optimistic about securing prosecutions against alleged conspirators responsible for fraud totalling more than pound;10 million against the Government's ill-fated Individual Learning Accounts scheme.
FE Focus has learned that West Midlands detectives believe their investigation has made the biggest breakthrough yet into the millions allegedly stolen from the scheme by bogus training providers.
Police say the case involves a network of business people who set up training companies which made bogus claims to Capita, the company which handled ILAs on behalf of the Department for Education and Skills.
ILAs, which provided subsidies of up to pound;200 to individuals to pay for training courses, was set up in 1999 by the DfES to whet the public's appetite for learning.
But the scheme was abruptly axed in November 2001, and has since been discredited by several inquiries for providing easy pickings for con artists posing as training organisations, and purveyors of poor-quality courses.
The scheme's long-promised replacement, dubbed "ILA2", which was also expected to be run by Capita, never materialised and many legitimate training firms' finances were hit by its sudden closure.
The progress of the investigation, led by detective inspector David Churchill, in Birmingham, will encourage ministers who have been under pressure from MPs on the Commons education select committee to demonstrate that there was substantial ILA fraud.
But police are doubtful that the pound;10m will be fully recovered, even if there are convictions.
FE Focus has also learned that there is at least another pound;10m of possible fraud which will not be investigated because police do not have the staff to tackle the tide of corruption generated by the scheme. This is despite the assistance of the DfES's special investigations unit which has been working with the police.
In a separate West Midlands inquiry also involving learning accounts, and led by DI Churchill, 17 people have been charged with defrauding the DfES of pound;1.1m Fifteen of the defendants appeared before Judge Taylor at Birmingham Crown Court on Friday, charged with conspiracy to defraud the DfES between June 1, 2000, and January 1, 2002. The next hearing is due on July 9.
The pound;199m budget for the first two years of ILAs was overspent by pound;96.3m. It remains unclear how much money was lost through fraud and how much because providers were keeping within the rules but taking advantage of the lack of criteria to control the quality of courses on which learners could spend their subsidy.