Tec fails with liabilities of £5m

South Thames yesterday became the first Training and Enterprise Council to go into receivership amid signs that the whole system for delivering the Government's £2bn programme for the unemployed is under increasing strain.

The London TEC, covering the boroughs of Lambeth, Southwark, Lewisham and Greenwich, called for receivership under the weight of £5m worth of liabilities.

Ministers last night insisted that all the other 73 employer-led TECs in England - they are new-style quangos with private company status - are financially sound. Neverthelss their ability to deliver training for the unemployed will be severely undermined by fresh cuts announced last month.

According to one government source, financial controls at South Thames TEC, which covered an area with some of the highest unemployment rates in the country, were particularly lax. " It was so bad nobody knew where they stood".

James Paice, the employment minister responsible for TECs, said there was no question of fraud. ``It was simple bad managment. They were entirely overstretched.'' One senior source in the TEC movement argued that senior officials at South Thames had emphasised the needs of the people in their area rather than the necessity for financial control.

The organisation had been the subject of three concurrent investigations into its financial managment system. South Thames had found itself unable to supply sufficient financial information to the Government and in October, ministers issued a breach of contract notice. It is understood that less than half of the £5m debt involves taxpayers' money, the rest is owed to contractors.

Mr Paice said the Government had issued a letter legally guaranteeing continued training for the 7,000 students presently on courses and payment for the colleges and other training providers. Harriet Harman, shadow employment secretary, whose Peckham constituency is covered by the TEC, said it was the Government's duty to "pick up the peices".

She said: "The TEC may be a private company, but it is still a public responsibility." She said it would be a great blow to training in south London. It demonstrated the fundamental flaw in "pretending" that Government functions were being hived off to independent private companies when in fact the Govenrment was forced to step in to bail them out. "Their ideology is catching up with them," she said.

Morale among peole looking for training, people on training courses and people providing training is already low and has been made worse by Government cuts in the training budget. Instead of a limited guarantee , Ms Harman called for a pledge that all training courses and contracts would be honoured and that the issue should be referred to the Public Accounts Committee. Ministers should also publish a report into the operation of the organisation by Grant Thornton which has now been appointed as receivers.

The Government should also make clear whether it would now change the financial control systems for all TECs in the wake of the problems at South Thames.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Business Analyst - 12 Month FTC - Entry Level

£23000 - £27000 per annum: Recruitment Genius: A Business Analyst is required ...

Recruitment Genius: Chefs - All Levels

£16000 - £23000 per annum: Recruitment Genius: To succeed, you will need to ha...

Recruitment Genius: Maintenance Engineer

£8 per hour: Recruitment Genius: This is an opportunity to join an award winni...

Recruitment Genius: Telesales Executive & Customer Service - Call Centre Jobs!

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy