Counter-fraud measures are to be set up for the apprenticeship funding programme, the government has insisted, amid warnings from the National Audit Office that not enough care is being taken to prevent a repeat of the Individual Learning Accounts fiasco.
Worried about a repeat of the multimillion-pound fraud 15 years ago, the NAO has found that the Department for Education (DfE) still has no contingency plan if levy and funding reforms do not work out as planned.
The DfE has now defended itself against the accusations, with a spokesperson telling FE Week: “We are working closely with colleagues from across government to implement counter-fraud measures for the new funding system.”
The failure of the Individual Learning Accounts scheme – which was scrapped in 2001 after abuse by unscrupulous providers led to a reported £67m fraud – was blamed on poor planning and risk management by the government.
But a damning report from the NAO published on 6 September has raised concerns that lessons have not been learned, raising the risk of “market abuse” as it warned that the DfE had not done enough to identify how providers, employers and assessment bodies might react to the apprenticeship reforms.
“DfE now needs to expand its work on behavioural risks,” it said, “and also ensure it learns lessons from previous initiatives which have not turned out as planned, such as Individual Learning Accounts.”
The report found that although a delivery team had been set up to “consider the risks of fraud and gaming”, it is “too early to say what impact this group will have”.
The NAO also urged the government to develop contingency plans for key parts of the reforms – particularly the introduction of the levy.
As previously reported by FE Week, the government has so far been silent on the matter of contingency planning if levy systems don’t work out as planned.
The NAO found that the “DfE believes that, in general, initiatives are progressing sufficiently well that no contingency plans will need to be drawn up before October 2016”.
Mark Dawe, chief executive of Association of Employment and Learning Providers, said: “The NAO is right to highlight that further progress is needed to manage the risks involved in the reform programme, because if we don’t get the transition process right, there’s a real danger that quality of apprenticeships will be adversely affected.”
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