Search for quantity over quality at root of scheme's collapse
The Public Accounts Committee, in its report last week, said the introduction of the scheme by the Department for Education and Skills was put under pressure by a "tight timetable of its own making".
The report added: "The department's risk assessment and management were not fit for purpose, and were driven more by concerns that the scheme would not attract sufficient new learners.
"As a result, the department did not give enough weight to advice received on the risks of fraud and abuse and about quality of training."
Capita was selected as the private partner responsible for administering ILAs by what was supposed to be a competitive tendering process. In the event, it was far from competitive. The report said: "The other bidders dropped out partly because of the limited time available to implement the scheme. Capita told us it remained involved because it had the infrastructure to meet the department's requirements."
When the plug was pulled on ILAs in November, 2001, there were reports of millions of pounds having been syphoned from public funds by fraudsters and unscrupulous providers who offered poor-quality training. Strange stories began to circulate, including a newspaper report of links with Osama Bin Laden.
But currently, Nigerian Sylvia Iwuagwu remains the only person to go to prison for ILA fraud - to the value of less than pound;10,000, although other prosecutions, for fraud totalling less than pound;100,000, have reached the courts.
It remains to be seen just how much money went astray through fraud and how much was down to providing poor-quality learning which ministers would characterise as "abuse" but could have taken place entirely within the rules.
The report said: "Latest figures suggest fraud could be as high as pound;67 million. But the department does not know the scale of abuse whereby people received poor, low-value courses."