According to the Financial Times, the government has ruled out compensation to training companies affected by the ILA fiasco, in spite of the sympathetic attitude to them expressed by the Education and Skills Select Committee. The committee recommended that compensation be paid at least to companies hit when the scheme was shut down two weeks earlier than had been announced.

The Mail reported last week that four directors of Capita, the company which administered the scheme and which was criticised by the committee for failing to draw attention to loopholes for fraud, have shared a windfall of cash and shares worth £11 million.

The committee's report stated: "We find it hard to credit that Capita, a major player in winning contracts for work contracted out to the private sector, should not have pointed out that, without a quality threshold for providers, the ILA was a disaster waiting to happen." The section of the committee's report that looked at the failures of the public-private partnership also said: "There should not be an automatic assumption that Capita should be the provider to take forward any new ILA scheme. The Committee notes the contrast between the Department's continuing co-operation with Capita and its refusal to consider compensation for learning providers."

Capita continues to run several high-profile public sector contracts. Last year the then Department of Education and Employment also awarded Capita a £100 million contract over 7 years to develop a smart card promoting education to school leavers.

However, the company has recently failed to retain a £50 million contract with Bromley Council. The new contract, with CSL and IT services company Sx3, includes much more stringent service level agreements and penalty clauses. Capita also recently withdrew from the bidding for a £1bn contract for services for Westminster Council.