DFEE called to account

March 14, 1997

National Vocational Qualifications are in trouble. Phil Baty reports on accusations of massive fraud.

"Incorrect payments" by the Department for Education and Employment to providers of national vocational qualifications fell from Pounds 9.4 million to Pounds 8.6 million between 1994/95 and 1995/96, according to evidence to the Public Accounts Committee.

The DFEE "drew encouragement" from this. But the committee did not. "This is still too high," it said this week in its report on payments made under the training for work and youth training programme in England.

The PAC highlighted the dangers of output-related funding: "We are concerned that output-related funding may encourage some providers to offer training which they find easiest and cheapest to deliver."

The DFEE told the committee that it does not want to "introduce systems of control that are so bureaucratic and expensive that they are disproportionate to the risk in Government-funded training programmes". It also admitted: "It is difficult to prevent individuals who wished to perpetrate irregularities from doing so."

The DFEEalso said it has taken steps to improve accountability. It has introduced new operating licences for Training and Enterprise Councils, good practice guides, a hotline for reporting complaints, an increased number of financial specialists and forensic accountants in the team, and better management systems.

But the PAC said it was "concerned" that it has taken the department since 1989, when TECs were first created, to put these arrangements in place.

Last month, in anticipation of the PAC report, the department announced plans to develop proposals for external assessment, to be carried out independently of the training providers. "The introduction of external inspection to work-based training affirms the Government's commitment to quality," asserted education and employment minister James Paice.

The TEC National Council is working on ideas for a quality council and a national inspection unit. A pilot scheme will be implemented this summer.

Even before the report's release, it prompted a response from Nick Tate, chief executive designate of the new Qualifications and Curriculum Authority, which will take over responsibility from the National Council for Vocational Qualifications in October. "QCA will have tough new statutory powers to remove public-funded qualifications and public-accredited awarding bodies from the approved list if they are not performing as required by law," he said. "This report indicates the vital need for QCA to have strong quality assurance powers to probe NVQ centres and their operations."


1994 December

South Thames Training and Enterprise Council is forced into liquidation after meeting huge unsubstantiated claims from some training providers. DFEE picks up the Pounds 8.4 million bill.

1995 August

A National Institute for Economic and Social Research report says that NVQ results cannot be trusted when payment depends on outcomes.

September Prime minister John Major pledges to "root out" bad vocational courses and impose "more rigorous testing and external marking".

1996 April

A senior manager at training provider Sight and Sound, in Greenwich, south London, is sacked after exposing false claims of hundreds of thousands of pounds for students who had not even sat NVQ exams.

Labour's training spokesman Stephen Byers tables parliamentary questions asking for a Government investigation into the allegations.


The National Council for Vocational Qualifications and South London TEC launch an investigation into Sight and Sound.


A National Audit Office report says that procedures for paying training programme providers are vulnerable to fraud, and that in 1994/95, the DFEE overpaid TECs by Pounds 9.4 million.


The Government publishes the consultation document Strengthening Self-Assessment and Introducing an External Inspection Regime in Government Funded Training.


Police seize documents from the Sight and Sound offices.

An Institute of Education report, Output Related Funding and the Quality of Education and Training, concludes that the NVQ funding system "does not include the necessary checks and balances to ensure probity and reliability".

Two training contractors from the Centrex training organisation are arrested in connection with an alleged Pounds 1 million fraud scandal.

The Public Accounts Committee hears evidence on "DFEE:financial control of payments made under the traiing for work and youth training programmes in England".

1997 February

Mr Byers tables a question in Parliament asking how much of TECs' total budget is allocated to training providers. Education minister James Paice replies: "We do not collect detailed information on TEC payments to training providers."

Mr Paice announces that he has asked the TEC National Council to develop ideas about how to run and organise external inspection for government funded training.

The TEC National Council proposes a quality council and a national inspection unit. The TECs, says Mr Paice, "will be working with officials in my department over the next four months to work up their ideas".

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