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Politics: Training fraud cost taxpayer pounds 5m

Minister will today carpet employers leaders for presiding over one of the biggest alleged frauds involving taxpayers' money to surface since Labour came to power.

Representatives from 28 employer-led Training and Enterprise Councils will be held to account for allowing pounds 5m to be paid for allegedly bogus qualifications.

Today's meeting in Whitehall comes at a time of mounting government disquiet over the seeming inability of TECs to exercise sufficient control over the pounds 1.25bn of state funds they disperse. TECs were created by the last government and charged with responsibility for providing training for the unemployed and developing local economies.

The TEC leaders have been called in today by Dr Kim Howells, minister of education and employment, after the Qualifications and Curriculum Authority decided to withdraw 1,600 National Vocational Qualifications. The certificates were awarded by the Road Transport Industry Training Board, formerly state- controlled, but now a private company. Some of the A-level equivalent certificates for vehicle maintenance were awarded to people who apparently do not exist. Others were issued with the qualification without the requisite level of achievement. Dr Howells will order the TECs to pay the pounds 5m back to the Exchequer.

The award of the certificates is being investigated by police and follows another investigation into Employment Link, a training agency which performed pounds 1m worth of work for the Central Training and Enterprise Council in the Midlands. Dr Howells has threatened to wind up the organisation and merge it with neighbouring TECs.

The government is known to be investigating other cases of alleged fraud by companies contracted to TECs in England, Wales and Scotland.

Last month Michael Bichard, Permanent Secretary at the Department for Education and Employment, told TEC chairman of his "deep concern about errors and irregular payments". He said: "I wish to do everything possible to reverse what appears to be a fall in standards of financial control."

Chris Humphries, chief executive of the TEC National Council, is anxious to dismiss any suggestion of fraud on the part of TEC directors or officers directly employed by them. Mr Humphries is expected to attend today's meeting and will point out that cases under investigation involve less than half a per cent of the 500,000 trainerss that TECs work with each year.

Mr Humphries will argue that most of the fraud allegations that involve cases which are more than three years old and have come to light as a result of more stringent financial controls imposed by the TECs themselves.