BusinessPeople In BusinessKPMG dragged into ILA fiasco

KPMG dragged into ILA fiasco

MPs are demanding a National Audit Office inquiry into work done by KPMG for the failed Individual Learning Accounts scheme, after a report criticised the scheme for 'serious failings' in how it was operated.

KPMG advised the Department of Education and Skills throughout the development phase of the framework for the now defunct training scheme.

The House of Commons Education and Skills Committee called for the ‘quality of the contribution made by KPMG to be examined by the chief audit watchdog, the NAO, as part of its continuing investigation into the causes of the fiasco.

The firm was contacted for comment, but could not be reached.

On Wednesday the committee released it report, which concluded by saying there were ‘serious failings by the Department for Education and Skills in the preparation and running of the ILA scheme’.

In November 2001, the government closed the scheme amid allegations of widespread fraud and abuse. Following the disclosure that one training provider had been offered the details of almost 1000 accounts, the scheme was withdrawn. Unscrupulous providers could have used these details to draw up to £200 from the accounts.

By the time it was closed, the programme was overspent by £66.9m and almost 6000 complaints have been received alleging that accounts had been emptied.

The DfES was castigated for its failure to learn from previous experience in setting up similar schemes, or to make firmer security provisions with outsourcing partner Capita. The contract for the scheme was worth almost £55m over a five-year period.

Capita also came in for criticism for failing to use its expertise to warn the department about the dangers of fraud.

Copies of the contract between Capita and the DfES, have been seen exclusively by VNU News Net. The contract required that Capita ensured individuals were able to access their own accounts, ‘in such a way that only they will have access to the information’.

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