The programme, one of Labour's key manifesto promises, which was meant to provide the public with access to subsidised courses in IT and other work-related subjects, collapsed spectacularly at the end of 2001, amid allegations of fraud and mismanagement.
Ministers pulled the plug on the scheme after it emerged that unscrupulous companies were exploiting security weaknesses in the scheme's computer systems to fraudulently claim £200 subsidies for training they had not carried out.
The National Audit Office report, published tomorrow, follows a damning investigation by the Education and Skills Select Committee earlier this year. It is expected to single out Capita, the company contracted to run and manage computer systems for the ILA scheme, for criticism.
It emerged that Capita failed to warn ministers that the design of the scheme and the specifications of the computer systems left it wide open to fraud. The firm also came under fire for its poor handling of enquiries from the public and training companies, who were given conflicting advice depending on who took their calls.