ILAs require watchdog

Any revamped version of the individual learning account should be monitored by a super-regulator to prevent fraud and misuse of public funds, MPs were told this week.

The regulator should act like a "kind of Interpol", able to work across funding and sectoral frontiers to root out fraudsters such as those who have brought the ILA initiative into disrepute, members of the Commons' education select committee heard.

Geoff Hall, director of learning programmes for the Learning and Skills Council, which is designing and may manage a relaunched ILA programme, told the committee that he thought experts from several regulatory agencies, such as the Qualifications and Curriculum Authority, should be brought together to form the watchdog.

Their collective experience in dealing with fraud would help them to prevent people from exploiting loopholes in the eligibility framework, Mr Hall said.

The LSC would like to see more flexible ILAs that could be held as cash or vouchers, with more ways to invest in them from individuals, employers, families, communities, tax credits or innovative schemes such as "learning miles".

College chiefs and private training providers told the committee that the absence of quality, regulatory and budgetary controls in the scheme - shut down by the government last November amid fraud allegations - turned it into "a licence to print money".

The scheme was allowed to outstrip its budget by £62 million, despite warnings to civil servants from the LSC in May 2000 and mounting anecdotal evidence of rogue learning providers.

Sammy Betson, director of Ipswich ITeC, a private training provider that recruited 500 ILA holders, said she got no response when she tried to warn Capita, the firm managing the take-up of ILAs, of doorstep selling to people with learning disabilities.

David Gibson, chief executive of the Association of Colleges, said a survey of 105 colleges found that they had lost £2.5 million among them through the ILA shutdown.