Government urged to ditch Capita after ILA failure

MPs have urged the government to abandon Capita in the development of new individual learning accounts after the company's "appalling failures" in delivering the first scheme.

Capita won a £50 million contract to run the ill-fated programme, which collapsed last year amid mounting allegations of fraud among learning providers and concern over costs that went £93 million over budget.

A report on an inquiry by the education and skills select committee criticised Capita, which boasts in its annual reports of experience in handling government projects requiring tight anti-fraud measures, for failing to point out that a lack of safeguards in the ILA system made it "a disaster waiting to happen".

In a House of Commons debate last week, MPs condemned old ILAs as "a cowboy's charter for the unscrupulous to plunder taxpayers' money", and demanded that Capita be excluded from a successor scheme expected to be announced later this year.

Andrew Turner, Conservative MP for the Isle of Wight, said that in its response to the select committee's report, the government said that "a successor scheme will be a major test for Capita".

He added: "That suggests that it has already been decided that those who failed last time will get a second chance, which the private providers that have gone bankrupt will not get."

Barry Sheerman, who chairs the committee, said the contract between the government and Capita "did not spell out the balance of risk and responsibility".