ILA spend exceeds budget by millions

December 21, 2001

The £60 million overspend on discredited individual learning accounts is set to soar, the government admitted this week.

The Department for Education and Skills said that outstanding course costs could add "several million pounds" to the overspend on the two-year ILA budget, which was set at £202 million.

ILAs, once hailed as a flagship government education and training scheme, were axed suddenly on November 23 amid allegations of fraud. The DFES has said that 60 cases are involved and that police fraud officers are investigating of them.

The government had intended to close the scheme anyway on December 7 but, according to a statement by education secretary Estelle Morris on October 24, this was because it had expanded beyond its capacity. Ms Morris also said that there was growing evidence that some training providers were abusing the system. No mention was made of alleged fraud.

A DFES spokesman said this week that some 1.3 million out of 2.6 million account holders had used their accounts to buy education and training courses from further education colleges and commercial training providers. The remainder lost their right to the accounts when the scheme was axed.

But some of the 1.3 million have booked courses with providers but have not yet taken them up. The government has undertaken to meet legitimate course costs in these cases. The DFES said it did not know how much more this would run to. The Commons' public accounts committee is planning to investigate the overspend on ILAs in the new year.

* Further education colleges have lost hundreds of thousands of pounds through the axeing of ILAs, a national survey has found, writes Tony Tysome.

Sixty-three colleges surveyed by the Association of Colleges said they had lost more than £720,000 in course fees and wasted investment after the plug was pulled.

Many warned that they could be out of pocket because of the bad publicity and loss of public confidence resulting from the government's mishandling of the scheme.

Colleges surveyed said more than 28,000 potential learners had registered with them as ILA account holders when the programme was closed.

They had had to deal with complaints from students and a heavy administrative burden in sorting out queries and problems related to the ILA shut-down, the survey found.

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