Cowboys take government training scheme for £65m ride

The Individual Learning Accounts scheme is an expensive shambles. Aside from fraudulent claims for training not provided, the...

The Individual Learning Accounts scheme is an expensive shambles. Aside from fraudulent claims for training not provided, the quality of some that did materialise was far from acceptable. Bill Goodwin reports

The Government began a formal consultation into the future of its flag-ship training initiative, Individual Learning Accounts, this week.

It is already clear that something has gone very badly wrong with the £260m scheme, which was intended to encourage people with few qualifications to learn new skills.

Individual learning accounts offered the public the chance to study anything from flower arranging to motor mechanics, with the help of training subsidies worth up to £200 a year.

But it was IT training that took the lion's share of the funding, as the public snapped up offers for cut-price training in word processing, using spreadsheets and the Internet.

Many small employers encouraged their staff to sign up to the programme to improve their IT skills, some offering help with expenses and travel costs.

But, 16 months after the programme began, there is growing evidence that some of the training offered fell far short of any acceptable quality standard.

Trading standards officers across the UK have received complaints from people who signed up for IT training courses which turned out to offer little more than a poor quality CD-Rom or a photocopied hand-out.

"There were often no exams, no formal training, nothing that you could imagine in a normal course, or even a distance learning course," said Simon Cripwell, information officer at Warwickshire trading standards department.

Training companies jumped on the bandwagon, setting up stands at car boot sales and on street corners, luring punters, against all the rules of the scheme, with offers of free computer training.

Few members of the public who signed up with touts like these were aware that they were signing away their rights to £200 in training subsidies that had been set aside for each of them by the Government.

One training company took a church for a ride, by audaciously offering the vicar a £15 contribution to church funds for every parishioner who signed up for a training CD. The vicar had no idea the company would then collect £200 from each parishioner's individual training account.

An illicit trade in individual learning account numbers, which were used by unscrupulous providers to claim funding for training that they did not deliver, soon developed.

Some fraudsters were resorting to bribery to obtain their numbers. Birmingham training company, WWWDot Group, for example, told Computer Weekly that its sales staff were routinely followed by staff from rival companies, who offered money for the account numbers of customers they had just signed up.

"We would go around a series of houses or companies," said managing director, Lee Wilkes. "As they were going out - no word of a lie - they were being shadowed by people following them. They were being asked, 'Did you get a number from that house? We will buy it off you then'."

WWWDot Group sacked two freelance sales staff after customers who had signed up for training discovered that their individual learning accounts had already been emptied. The pair, it emerged, had been selling the account numbers to a rival firm.

Other companies were exploiting weaknesses in the Web site, created and maintained by Capita, to manage the programme. There were few, if any, checks on the individuals and training companies that signed up for access to the site.

Fraudsters discovered that they could guess the account numbers of individuals who had yet to spend their individual learning account grants, through a process of trail and error.

Although the account numbers were 10 digits long, they followed a simple sequence. An algorithm, almost identical to the one used to generate the account numbers, had even been posted on the Individual Learning Account Web site.

Numerous training companies have told Computer Weekly that they were offered illegally-obtained lists of unused account numbers for between £25 and £100 per number.

"Some of my centres had people phoning up saying, 'I have got a stack of 1,000 numbers. I will charge you £25 for each of them', hoping our training centre would buy them, log them into the system and claim £200 for each number. This happened about three times," said James Eades, operations director of Best Computer Training.

Another training provider in the North of England was offered a registered training company for sale for £100,000, with the suggestion that it could use the company to claim money from account numbers for training it had not offered.

The full scale of the fraud has yet to emerge. MPs at the education and skills select committee have speculated that the figure could be as high as £65m.

Officials from the Department for Education and Skills have admitted that the scheme was designed with the minimum of controls to cut overheads and to make it as easy as possible for training providers to sign up to it. Unfortunately the lack of controls also made the scheme easy to abuse.

Now the Government is seeking views on how to improve the scheme. But time is running out for many IT training companies. For those which have been forced to lay off staff and close training centres since the scheme's abrupt closure in December, it is already too late.

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