ILA alarm 'not loud enough'

Capita, the organisation that was awarded a £50 million government contract to administer the ill-fated individual learning account scheme, "did not shout loud enough" as potential fraud emerged, one of its directors admitted to MPs this week.

Anecdotal evidence of rogue training providers misselling or fraudulently acquiring ILAs and pocketing the cash mounted as the number of account holders rocketed to more than 2.5 million in a year - 1.5 million more than expected, members of the Commons education select committee were told.

But while Capita chiefs raised concerns in monthly meetings with Department for Education and Skills officials, they failed to blow the whistle at a high enough level to prevent the problem becoming so bad that the government had to shut down the scheme last November.

Paddy Doyle, Capita's operations director, told the committee that it was not in his company's contract to scrutinise training providers to ensure that they were bona fide organisations or to check the quality of their training.

The government dropped requirements for validation of learning providers, approved lists of courses, authenticating ILA applicants and issuing statements of account to account holders weeks before the full scheme went live in May 2000.

But Mr Doyle said Capita took its "fair share of the blame" for failing to alert the government to weaknesses in the scheme that left it open to fraudulent claims for ILA money.

He said: "We didn't shout loud enough when the issues were coming to light. We have been asked, when did we get in a cab and go to the department to raise our concerns? We didn't."

Mr Doyle also admitted that Capita "could have moved earlier" to make some of its information technology systems used to administer the scheme more robust.

The committee heard that the DFES decided to axe learning accounts prematurely when it received a CD containing details of ILA account holders that could be used for fraud.

It was possible for unvetted training providers to access account holders' details through the computer system and draw the money from their ILA without permission, Simon Pilling, a Capita executive director said.

But Mr Doyle denied that Capita had been negligent in failing to raise the alarm over such flaws in the system.

He said: "We did a hell of a lot that was right. Was it enough? No. But there is no evidence that we have been negligent in terms of our role."