In July 2000 Capita Group PLC won a contract to operate the Individual Learning Account (ILA) scheme under which everyone aged 19 or over had a right to an ILA entitling them up to chose how they spent up £200 on training. Between its September 2000 launch and its closure on 21 November 2001 there were 2.5m accounts logged on to Capita’s computer system. The scheme was closed because there were suspicions that abuse of the scheme had become so endemic that could not be eradicated without killing the scheme itself (House of Commons, 2002).
The scheme cost £268.8m with an overspend of £69.9m. Capita received nearly 8,500 complaints by the end of October. It’s security was later described as pitiful and the vetting procedures for learning providers as ‘shocking’ in evidence to the Select Committee (ibid). The level of abuse and fraud was estimated to run into millions and by August 2002 560 learning providers were under investigation by the Department’s compliance unit and 99 had been transferred to the police (National Audit Office, 2002).