Head of the National Audit Office Sir John Bourn today reported to Parliament that fraudulent and other irregular payments made under the Individual Learning Accounts (ILA) scheme had been estimated as likely to total some £97 million. As a result he has qualified his audit opinion on the Department for Education and Skill’s Resource Account 2001-02. The Department is unable at this stage to estimate how much of the total sum it will be able to recover.
According to the report by the NAO, the cost of fraud and serious irregularities, based on estimates and extrapolations by the Department, may be up to £67 million. In addition, the Department estimates that it has made irregular payments of some £30 million. This is where good quality learning was delivered but where payments did not fully meet the scheme rules: for example, where the learning provider did not seek the full personal contribution from the learner.
The Department will not know the precise extent of the fraudulent activity until its investigations are complete, and this could take up to two years.
In October of this year, the NAO published its report into the Individual Learning Accounts scheme, which was aimed at widening participation in learning and helping to overcome financial barriers faced by learners, particularly among those who lack skills and qualifications. In line with police advice, the Department had closed the scheme with immediate effect in November 2001, following evidence of significant potential fraud and abuse.