Government halts training scheme after fraud claims

A Government training scheme aimed at improving the basic skills of millions of adults is to be suspended after allegations of fraud.

A Government training scheme aimed at improving the basic skills of millions of adults is to be suspended after allegations of fraud.

Nearly 300 companies and trainers claiming to be providing courses are being investigated by the Department for Education and Skills following complaints from people who have opened up Government-backed Individual Learning Accounts (ILAs).

Under the scheme, an individual can apply for a Government discount of up to £200 for a course provided they pledge to pay at least 20 per cent of the cost themselves. However, unscrupulous companies claiming to offer the training are allegedly pocketing the Government discount without providing a service.

Civil servants at the DfES said yesterday there had been complaints of "cowboy operators cajoling people in the street into taking out an account". Officials were investigating 279 providers out of a total of 8,500.

More than 2.5 million adults have taken out accounts since the scheme was launched three years ago. The first million were given a government grant worth £150 to go towards the cost of the training. Now, applicants are offered an 80 per cent discount off the bill for basic skills courses such as computer literacy and 20 per cent off other courses. The maximum subsidy is £200.

Estelle Morris, the Secretary of State for Education and Skills, said yesterday that there was "growing evidence that some companies are abusing the scheme by offering low value, poor quality learning".

She added: "ILAs have opened up access for a great many people to a wide range of learning experiences. However, the rapid growth of the scheme has exceeded all expectations, causing us to think again about how best to target public funds in this area and secure value for money."

She announced that the scheme would be suspended from 7 December so that its operation could be reviewed. It would be closed to new applicants although those who had already applied for courses would still be able to register for them until the cut-off date.

Damian Green, the Shadow Education Secretary, said: "Yet another flagship education policy has collapsed. This must be a severe embarrassment for Estelle Morris, coming after she had to admit the failure of the Government's student loans scheme."