ILA scheme grew too fast to afford

The government has admitted that the individual learning account programme, shut down without warning last month, had "expanded beyond its capacity".

The programme, launched in September last year, offered adults £150 towards the cost of training on an approved course. Ministers withdrew it amid fears of a growing number of training providers mis-selling ILAs and potential fraud cases.

It also emerged that the programme recruited more than 2.5 million learners in a short space of time and was costing too much to run.

Estelle Morris, the education secretary, told the House of Commons that by October the number of complaints about training providers involved in the scheme had risen to more than 8,000, or 3.5 per cent of the total number of ILA accounts opened.

More than a quarter of the complaints were about providers who had not complied with the rules of the scheme. So far, only four providers and 30 individuals have been charged with potential fraud by the police.

But the government also faced the problem that the number of account holders had risen by a million in just three months.

"That far exceeded our expectations about the amount of subsidy that the government would pay and the number of account holders," Ms Morris said.

Her comments were echoed in the House of Lords this week, when school standards minister Baroness Ashton of Upholland said: "The ILA programme has exceeded all expectations and has expanded beyond its capacity."

A spokeswoman for the Association of Colleges said it appeared the government was attempting to save money to cover the cost of its other education commitments, including education maintenance allowances and the possibility of more support for higher education students.