Collapse of ILAs blamed on widespread fraud

The Commons Education and Skills Committee demanded ministers make available a report on system security from IT consultants Cap Gemini Ernst & Young and they called for compensation for bona fide training suppliers who lost out when the scheme was suddenly cut off last year.

The Department of Education and Skills shut the scheme down after spending topped £260m – £60m more than had been budgeted for – amidst evidence of widespread fraud.

Ministers acted after being given evidence that showed unused ILA account numbers were being offered for sale so fraudulent training providers could empty them despite providing little or no training.

The police were called in and advised immediate closure two weeks before an already premature closure date had been announced due to overspending. But MPs were told it was clear earlier that there was widespread abuse.

One consultancy found people, listed on organiser Capita’s database as 80% discount holders (the incentive for IT and numeracy courses), ‘were doing ineligible courses such as feng shui, plumbing or accountancy’.

Under the scheme a claimant had to pay £50 up front for training supposed to be worth £250, with £200 paid by the Department.

There were rumours of massive fraud, in one case, up to 80,000 accounts in a single case.

By early April the police had made 40 arrests and secured one conviction. Thirteen cases have been brought to trial.

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