MPs look into 'lost TEC millions'

September 20, 2002

MPs are to investigate the "lost millions" of pounds in education and training funding that the government is trying to recover from former training and enterprise councils.

At least £110 million is yet to be returned to the government by TECs, which were replaced by learning and skills councils in April last year, new figures reveal.

Further education leaders say that the money has been misspent on administration and projects outside the TECs' remit. It should be recovered and ploughed back into the post-16 sector, they say.

Parliamentary questions lodged by Liberal Democrat MP Paul Holmes, who is a member of the education select committee, have forced the government to reveal that it is struggling to recoup the money.

In answer to the questions, education minister Ivan Lewis said the Department for Education and Skills had recovered £140 million of £250 million of TEC reserves owed. Of the total, £40 million had been invested in "fixed assets transferred to a range of successor bodies or for use in the local community", he said.

Mr Lewis admitted that until 1999-2000, TECs had been allowed to transfer up to 10 per cent of their surpluses from one budget to another. Critics have argued that this allowed TECs to divert funds to local projects that had little to do with education.

The minister told the House of Commons that the return of funds had taken longer than expected "due to the complexity of issues which have had to be resolved, prior to TECs being able to appoint a liquidator or agree a clean break with the department where the TECs have decided to continue".

He said the department was working with TECs and liquidators to resolve the issues "as a matter of urgency", but had on occasion resorted to threatening to appoint receivers "where we have failed to secure the level of cooperation needed".

Mr Lewis said information on central administration costs of TECs was not available since the amounts spent and its disclosure "were a matter for individual TECs and varied between them".

Mr Holmes said the level of uncertainty and the amounts of money involved warranted an investigation by the Commons' public accounts committee.

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