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According to Ofsted, only about half of the UK's 400,000 teachers have enrolled for the New Opportunity Fund IT training programme and only a minority have completed it.
Teachers are making slow progress in developing their professional skills in using ICT because they have to train in their own time, the education watchdog said.
Ofsted also found that headteachers are hampered in choosing approved training suppliers by a lack of adequate information. A number of headteachers and teachers are still unaware of the aims of New Opportunity Fund training, it said.
In April 1999 £230m of lottery funds were made available from the New Opportunity Fund to help to increase teachers' IT competence.
This followed the Department for Education and Employment's commitment of £657m over four years to develop schools' ICT infrastructures and support training.
The interim report is highly critical of the role played by Local Education Authorities in pushing the ICT agenda in schools. It claims that levels of support vary considerably and are often too low to meet the full range of schools' needs.
"[The local education authorities'] support and guidance for schools' ICT development planning and their procedures for the approval of schools' plans are unsatisfactory overall," it said.
Ofsted called on the Government to raise the profile of the New Opportunity Fund training scheme and develop a national programme of in-service training for headteachers in managing ICT developments. It also urged LEAs to provide more support for schools in their ICT development planning.
The chief inspector of schools Mike Tomlinson said, "As can be seen, there are messages for all who have responsibilities for ICT, at any level, if the initiative is to have maximum impact on standards of work."