MPs call for Whitehall deals to be scrutinised

The Government has been urged to open up its service provider agreements with IT outsourcing companies to parliamentary scrutiny,...

The Government has been urged to open up its service provider agreements with IT outsourcing companies to parliamentary scrutiny, following the collapse of its Individual Learning Account (ILA) scheme.

The recommendation, made by a cross-party committee of MPs, is part of a damning report published today which criticises both the Government and IT supplier Capita for their poor management and flawed implementation of the £55m training programme.

The ILA scheme was abruptly closed by ministers last year following mounting concerns that it was running at least £60m over budget and was being abused by fraudsters. Some companies were found to have exploited weaknesses in Capita's IT systems to claim government funds for training they did not provide.

The MPs called for the Government to guard against future programmes falling into the same trap by sweeping away the secrecy surrounding its agreements with private sector service providers.

"The lack of scrutiny of the delivery model did nothing to improve the ILA scheme's chance of success. We recommend that in future the non-confidential clauses of any such major service providers should be laid before Parliament at least three weeks before coming into effect," the report said.

The MPs accused the Government of failing to listen to the concerns of its own experts that the scheme was likely to be abused unless quality control procedures were put in place to monitor the quality of training offered to the public.

Officials at the Department for Education and Skills were said to have overlooked the concerns of the previous government, which decided that an ILA scheme would not be practical, and failed to learn from the experience of IT projects in other government departments.

"We regard the failure of the department to learn from the mistakes made in the past by its predecessors and other government departments to be one of the most disturbing aspects of the ILA experience," the report said.

It should have been possible to design a scheme that was not open to fraud or misuse, but the lack of quality assurance made abuse almost inevitable, the report concluded.

Until remedial measures were taken in the summer of 2001, Capita's ILA Centre could not prevent unscrupulous training providers, who had complete access to Capita's ILA computer systems, using them to claim government subsidies for individuals they had not trained or who did not even exist.

Capita should have made a more speedy assessment of the Government's plans to use the existing Learndirect database to accredit training providers, the report said. The plans were dropped just before the scheme was launched because of difficulties in linking Learndirect to the ILA database.

"We find it hard to credit that Capita, a major player in winning contracts for work contracted out to the private sector, should not have pointed out that, without a quality threshold for providers, the ILA was a disaster waiting to happen," the report said.

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