Individual Learning Account

The Individual Learning Accounts scheme was announced in the 1997 Labour Party manifesto to support adult education with a system of tax incentives from employers, as well as a cash contribution of £150 to each of a million individuals. The system was biased towards the uptake of IT skills, following the emergence of the internet.

The scheme was announced by the Chancellor of the Exchequer, Gordon Brown, in the 1999 budget and launched in 2000 in the form of financial reimburses to educational course providers for the cost of the ILA incentives.

By the time the scheme was abandoned in October 2001 there were 8,500 acredited providers nationwide. The Department for Education and Skills was investigating 279 providers on the basis of substantial evidence of miss-selling, and police had arrested 30 people. Prosecutions based on this fraud were still taking place in 2008.

Capita was contractor which implemented the payment scheme. Following its investigation, the Parliamentary Committee of Public Accounts reported that the total expenditure on the scheme exceeded £290million (£37million paid towards Capita) with fraud and abuse amounting to £97 million.

The fraudulent activity was either in the form of obtaining learning account numbers from individuals or buying them from corrupt providers and simply cashing the credit, knowing that there was virtually no chance of detection of the fact that no education had been delivered.

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