Select Committee on Education and Skills Minutes of Evidence

Further supplementary memorandum from Mr John Healey MP, Parliamentary Under Secretary of State for Adult Skills (DfES 16)


  In my letter of 7 December I undertook to provide you and members of the Committee with key update information on ILAs. I am writing later today to all MPs to confirm details of our arrangements to process payments to learning providers and to explain the way we are developing plans for a successor ILA-style scheme. I have enclosed a copy of the letter (Annex) and I hope you and your Committee find the content helpful.

  My other purpose in writing however is to cover two further points raised in the Select Committee on 28 November: the overspend on the programme; and our continuing investigations into certain learning providers.

  I promised to inform the Committee about the projected overspend on Individual Learning Accounts, as soon as I was able to do so. I explained in my letter of 30 November that the overspend on budget up to 23 November was around £58.8 million but that the final overspend will depend on a number of factors, in particular the full extent of claims outstanding and bookings for learning confirmed by 23 November, and the extent to which some claims will be validated after investigation and analysis by officials. Officials have been working on the analysis as a matter of priority and it is now clear that we will not be able to establish the final end-year overspend figure until the New Year. I will of course write to you again just as soon as I have that information to hand.

  The police investigations and those of our own Special Investigations Unit are continuing, both in respect of cases arising from complaints and concerns prior to 23 November and from the specific events that led to the suspension of the programme on 23 November. Departmental officials are working closely with all the police forces involved and have a further meeting this week with the West Midlands Police who are providing a co-ordinating role across all investigations.

  I hope you and your colleagues on the Select Committee find this information useful. Please let me know if you require any further details

18 December 2001


  On 27 November I wrote to inform you that on Friday 23 November the Department for Education and Skills called in police to investigate serious new allegations of fraud and theft involving Individual Learning Accounts (ILAs). There was a very significant threat to public money and we therefore closed down the ILA system with immediate effect at 6.30 pm on the 23 November. Since I wrote, I have answered many PQs, one Commons debate and questions from the Select Committee. Many Members have understandably expressed concern about the position of both learning providers awaiting payment and learners who would like to see an ILA-style scheme re-introduced.

  Alongside a significant concentration on pursuing the necessary investigations, officials have also been working hard on both issues as a priority. I am therefore now in a position to update you and I hope this information will be helpful in replying to constituents who may contact you about ILAs.

  First, on payments to providers. Officials have been working hard to put in place a system that allows us to validate outstanding claims for payment to learning providers. We will issue payment this week of claims submitted up to 21 November from almost 1,400 learning providers. However, there are a smaller number of claims from around 140 providers, though in some cases for significant amounts, on which we need to carry out further checks before payments can be cleared. Officials will be writing this week to all providers whose claims were outstanding up to 21 November to explain the general arrangements for taking forward the processing of existing and future claims.

  We are also continuing to work on validating claims made between 21 and 23 November and on learning booked on the ILA system up to its closure on 23 November. Once we are satisfied that eligible learning has taken place in accordance with the rules of the programme, we will be able to arrange payments to all providers who are not currently subject to investigation provided that this status does not change following the analysis of recent complaints received.

  Second, on the development of a successor programme in England (colleagues in Scotland, Wales and Northern Ireland are making their own decisions). It has been widely recognised in the House and elsewhere that there has been a lot which is important and innovative about ILAs and there can be no doubt that ILAs have encouraged many adults back into learning.

  I very much welcome the interest and strong support Members, learning providers and others have shown in the development of a new scheme. We will draw lessons from the first ILA programme and ensure that plans for a future ILA-style successor scheme take the best from this and remedy its shortcomings. I cannot yet give you a firm date for its introduction, but in January and February we will conduct a systematic consultation with providers, learners and other stakeholders to take the views that many have already offered to give us.

  We will therefore actively involve learning providers in the development work for a successor programme and DfES officials have already met representatives from a number of providers.

  I hope that this is helpful and I will continue to keep you informed of major developments.

  Best wishes

John Healey

Minister for Adult Skills

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