Fraud allegations surround colleges

Dozens of alleged frauds involving millions of pounds are being investigated after a series of complaints over further education colleges and providers of vocational training.

The Learning and Skills Council, the quango responsible for £7.3bn of the English education budget, said it was dealing with 33 cases of alleged fraud.

New complaints were coming in at an average of four each month. About a half involved inflated claims for funding, a quarter concerned falsified student numbers and a tenth were for breaches of financial regulations. Most of the cases involved further education and sixth form colleges.

The LSC said it would run a series of seminars for college and training managers this year to try to cut down on the problems.

Last week, Margaret Hodge, minister for further and higher education, gave a warning to colleges that failed academically or were poorly managed could be taken over by outside "hit squads" because ministers were concerned that – of the four million youngsters in further education – only half would leave with the qualification they had set out to gain.

At that time, the "hit squad" proposal was criticised by college principals.

Geoff Snell, head of the LSC's special investigations unit, said: "These alleged frauds and irregularities do involve significant amounts of money – several million pounds is at risk in the 33 cases we are investigating at the moment, although it is impossible to give any firm figure at this stage.

"We actively investigate, where sufficient information is possible, every case that is reported to us."

An LSC spokesman said the volume of fraud cases was about that expected for an organisation of its size.

The most high-profile scam to grip the training industry – which the LSC is not involved in investigating – concerned Individual Learning Accounts, the flagship scheme the Government was forced to shut last year. The scam involved claiming for training that never took place or stealing subsidies meant for account holders.

The scheme has already gone more than £70m over budget but the true extent of the losses will not be known until later in the year.