Capita loses ILA replacement deal

Dinah GreekCapita has lost the contract to develop a replacement for the government's collapsed Individual Learning Accounts (ILA) training initiative.

The Department for Education and Skills (DfES) has decided to delay plans for a successor scheme. It will now fall under the remit of the National Skills Strategy review of funding for adult learning, due to be published in June 2003. The ILA scheme was scrapped last year after allegations of fraud, and was £74m over budget. In May, Capita and the DfES were criticised by MPs for inadequate security procedures that allowed unscrupulous training providers to access individual's training accounts.

But in July, Capita told Computing it had received assurances from the DfES that it would be involved in an ILA successor (Computing, 4 July).

The supplier says that the change of heart is due to a review of policy, not past performance.

'The original contract allows for its termination on the grounds of a change of government policy - which is what has happened. Capita has not been sacked and those suggesting that it has are simply wrong,' said a spokesman.

The announcement coincided with a report by the National Audit Office (NAO), which identified a number of key areas where the DfES and Capita had failed.

The NAO says that the DfES and Capita did not notice that 13 training providers had registered over 10,000 accounts and that 20 providers had received payments in excess of £1.5m. The full extent of the fraud may not be known for another two years.

Tim Boswell, shadow minister for Higher Education, Further Education and Lifelong Learning, said: 'This report reveals that the ILA scheme was an accident waiting to happen. If the National Skills Strategy goes for review it could be months before a replacement is agreed on.'

The DfES declined to comment.