Memorandum from Ms Vivienne Parry (ILA
I said that I would briefly outline my knowledge
of ILAs and in particular that relating to the National Distance
Learning College to you. I'm happy to give evidence to the Committee
if you would find this helpful.
Until very recently I wrote the eponymous Cash
and Parry consumer page for the News of the World.
In March 2001, Fiche and Chips, a company offering
reconditioned PCs for £300 was the subject of a number of
complaints from readers. F & C was one of several companies
belonging to the Middlesbrough based Thanx Group. Another Thanx
Group company was the National Distance Learning College, a distance
learning provider. Both F & C PCs and NDLC courses were advertised
on the same direct mail literature. Some 26 million of these leaflets
were delivered to homes by the Post Office.
One particular reader wrote to me in April 2001,
having applied for both a NDLC course in computing (with ILA funding)
and a reconditioned PC in March.
She complained, like everyone else, that her
PC hadn't been delivered. As a consequence, she'd not been able
to commence her NDLC computer course. So she'd asked for her course
to be cancelled but received a letter saying that she couldn't
cancel it without handing over her ILA details or £150 in
cash herself. Learning providers being paid NOT to deliver courses
didn't seem right to me and I investigated.
I discovered that NDLC was in fact offering
bogus courses with ILA funding, all of which were said to lead
to a City and Guilds diploma. None of them did because NDLC were
not accredited to do this. At the time when I first wrote about
this (early May), in excess of 30,000 students on ILA funded courses
with NDLC believed that they would get a C & G diploma at
the end of their studies. Not a single one has done so.
In addition to this substantial educational
fraud, there was also evidence of accounting fraud. For instance,
all 400 employees of the Thanx Group were each given a payment
of £10 in order to part with their ILA number. There were
also a number of cases of ILA details being demanded, despite
the course not being delivered. I was also aware that those people
who had invited an NDLC salesman into their homes, signed up for
a course but cancelled within the seven day cooling off period
still had their ILA accounts plundered.
NDLC courses were then being recommended by
I took all of this to the DfES in late April,
via their press office and sent details of the accounting fraud
to their offices in Sheffield. I published a major feature on
this in early May and forced the DfES to remove NDLC from the
I subsequently discovered that NDLC had claimed
the full 20 per cent ILA of £200 on every single one of its
courses by claiming that they all contained "elements of
CLAIT"Computer Literacy and Information Technology.
This was a lie and in reality only a couple of courses did so.
Students were also being sent unlicensed Microsoft software.
NDLC continued to tell students that they would
receive City and Guilds diplomas, despite information from Trading
Standards and C & G to the contrary. Their courses were not
fully written and so many students were deliberately stalled when
they reached the end of the material the NDLC had managed to write.
The course tutors were in fact people taken off the long term
unemployment register (for which NDLC received substantial government
support). Less than 2 per cent of the tutors were qualified in
any way. The DfES were aware of all of this, but astonishingly
still did not manage to uncover any fraud within this company.
NDLC went into receivership on 23 November,
after a sustained period of asset stripping to a phoenix company.
Over 58,000 students who paid for their courses in full will get
neither a completed course nor their money back. An investigation
by Trading Standards was indicative of a major fraud and the Fraud
Squad are now investigating the whole of the Thanx Group. Of particular
concern was that the receiver was deliberately delaying in one
NDLC location, in order that a transfer of £77,000 could
be banked from the DfES on that very morning, even though none
of the students who had paid for these courses could ever or would
ever receive them. I believe that, at the very least, this represents
an offence under Section 213 or 214 of the Insolvency Act.
Some £7.5 million has gone to the NDLC.
Not a single student either finished their course or got any sort
of qualification despite the fact that this problem was flagged
up so early. Suspension of the NDLC would have been the appropriate
reaction. Instead it was allowed to go on defrauding students.
These are the basic facts. There is much else
besides including the role of the awarding bodies, the lack of
accountability within the DfES etc etc.
Ms Vivienne Parry