TECs 'hoarding' cash as losses reach pounds 15.5m

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The Independent Online
Twenty-six Training and Enterprise Councils, the flagship bodies at the heart of the Government's employment training programme, made total losses of pounds 15.5m last year, according to new figures.

Only seven TECs lost pounds 4.4m in 1992/93 and in 1991/92, only one ran up a deficit.

While the losses have spiralled, so have the councils' financial reserves, leading to claims by the Labour Party that they are hoarding cash rather than spending it on job training.

The losses will heighten fears of another collapse like that of South Thames TEC earlier this year. South Thames lost pounds 1.3m and owed pounds 8.5m to the former Department of Employment alone when it went under. Other big losers in 1993/94 were Devon and Cornwall, which lost pounds 1.95m, Suffolk, pounds 1.45m, Walsall, pounds 1.04m, and Tyneside, pounds 990,000.

The remaining 50 TECs all made a profit but the overall total was well down from previous years. In 1991/92, TECs recorded an overall surplus of pounds 104.4m, in 1992/93, they made pounds 56.7m and last year pounds 20m.

While their profits have slumped by 82 per cent during the past three years, their reserves have soared by more than half, from pounds 150.4m to pounds 227.7m.

The figures were obtained in parliamentary answers from James Paice, the employment minister, by Alan Milburn Labour MP for Darlington. "TECs have taken to hoarding public cash in an effort to combat the effects of government funding cuts," said Mr Milburn.