BusinessPeople In BusinessMPs shocked by decision to reappoint Capita

MPs shocked by decision to reappoint Capita

The government will choose controversial outsourcing firm Capita to run the replacement for its Individual Learning Accounts training scheme, VNU News Net can reveal, despite its 'incompetence' in running the original.

MPs have savaged the decision, after Capita’s previous failure to introduce basic security measures contributed to a £93m overspend of taxpayer’s money.

Capita’s ‘staggering incompetence’ over ILA should rule them out of running the replacement scheme, said Paul Holmes, Liberal Democrat member of the Education Committee.

‘Capita boasts of its experience in handling Government projects. Yet not once did Capita warn that the scheme was open to abuse. Capita should not go on to run the second scheme,’ he said.

The chairman of the Education Select Committee charged with investigating the fiasco, Labour MP Barry Sheeman, also criticised Capita for ‘severe shortcomings’ and David Chaytor, Labour MP for Birmingham North, added that Capita’s record ‘was appalling’.

ILA was closed down early last November, amid concerns over fraud. According to Education Select Committee sources, the final overspend will be £93m.

Holmes blasted Capita’s security measures as having ‘provided a cowboys’ charter for unscrupulous trainers to rip off the taxpayer’.

It had become apparent that fraudsters needed no more than an account number to remove up to £250 from the account. Worse still, account numbers were sequential, meaning that once one genuine number was known, it was easy for would be fraudsters to guess others.

Government spokesman Ivan Lewis last Thursday told parliament that no decision to award Capita the contract for the replacement scheme has been taken, but the outsourcing firm believes it has landed the contract.

The firm told VNU News Net in a statement that ‘the Department for Education and Skills has agreed in principle to work with Capita in developing a successor scheme for ILAs’.

Despite the apparent agreement, no details of the scheme will be announced until the autumn. This has outraged training firms, who have been left in limbo following the cancellation of the scheme last November.

James O’Brien, managing director of Pitman Training said he was ‘extremely disappointed by the delays’.

‘If they got the selection procedures (for providers) right, they could get the replacement scheme up and running quite quickly,’ he added.

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