The education select committees proceedings have uncovered more evidence of the extent of the abuse and mismanagement in the Individual Learning Account Scheme. MPs have been informed that a third of account holders did not even know they were signed up.

Evidence was provided by York consulting, who carried out two suveys of the scheme (March/April and July/August 2001). In the first, many account holders didn't know they were registered. In the second many who according to the system had received funding towards courses, were unaware of that. The consulting company maintains that the latter discrepancy might not have been due to fraud, but a function of training providers applying for funding for a whole learning package without account holders being clear on how the system functioned.

The lack of clarity has alarmed MPS, one of whom, Lib Dem Paul Holmes, suggested that fraud could have accounted for £65 million of the total expenditure: "The evidence we have been given today confirms that the government scheme is best summed up the words 'failure' and 'fraud'."

If the discrepancy between money claimed and the money account holders were aware of claiming was "reflected across the whole scheme it would mean £65m of taxpayers' money lost to fraud," Mr Holmes continued. "Failure because although the scheme was very popular the key group being aimed at, those with no formal qualifications or no recent qualifications, were largely missed by the scheme. Controls were so lax that money meant for IT and numeracy training ended up paying in some cases for feng shui courses."

According to the BBC, eleven people have been charged so far with defrauding the accounts, and the DfES have said that another man will be chared next week.