The “ appalling ”level of fraud and abuse
of Individual Learning Accounts (ILAs) was caused by Department for
Education and Skills ministers cutting corners in designing and
managing the scheme, the House of Commons Public Accounts Committee
said last week.The £273m ILA
programme was designed to offer financial incentives to encourage
the unemployed and those with few qualifications to take short
courses in IT and other work-related areas with private training
firms. It collapsed in 2001 after revelations of widespread abuse
and fraud.
The PAC
examined the DfES ’ management of risk in designing and
implementing the ILA scheme, its relationship with contractor
Capita and actions taken to limit the scale of fraud and abuse
which could amount to £97m.
It found the
programme was poorly thought out and put in place too quickly.
The government
watchdog also criticised the DfES for the poor security of its
online systems, which was a prime cause of the difficulties
suffered by the ILA programme.
Structured
mechanisms and procedures were not put in place to identify
patterns of fraud, there were no procedures to check that security
provision in the system was adequate, and no procedures to archive
log files to identify misuse of the ILA online system, according to
a study by Cap Gemini Ernst & Young.
In addition,
the PAC said the department did not give enough weight to advice
received on the risks of fraud and abuse and the quality of
training. It also said checks on learners were not vigorous enough
and that the contractual arrangements with Capita were weak.
Edward Leigh
MP, chairman of the PAC, said, "It is likely that half of the
budget for Individual Learning Accounts was siphoned off in fraud
and abuse. This reflects the number of shortcuts taken by the
department.
“ The scheme
was poorly thought through, put in place too quickly, and the risk
assessment and risk management was wholly inadequate. To match
innovations designed to reduce bureaucracy for new learners and new
providers, the department should have built counter-fraud measures
into the design of the scheme and put in place robust
monitoring."
The PAC ’
s criticism mirrored the findings of the National Audit Office,
which last year said the ILA scheme was flawed from the start, with
no proper business plan, an imperfect contract and insecure IT
systems.