Skills agencies sit on pounds 232m surplus

TRAINING and Enterprise Councils, the Government-backed skills agencies, are sitting on a cash mountain of pounds 232m, it was disclosed yesterday.

The National Audit Office revealed the surplus in a report on the accounts of the Department of Employment, which funds the TECs. Last year, they received pounds 1.83bn, of which the largest programmes, Youth Training and Employment Training, obtained pounds 1.25bn.

In addition, the NAO also identified an estimated pounds 16.1m which it said had been paid to the TECs incorrectly. Of that figure, pounds 14.9m went on training programmes and pounds 1.2m went directly to trainees.

Under their contracts with the Government, the TECs are allowed to generate a profit but the size of the total is much greater than previously thought. It can be used to generate future training schemes or pay for extra costs.

The NAO said the surplus had arisen because TECs were keeping their own expenses down or were receiving a higher than expected amount from employers for their services.

The NAO findings will add weight to claims that the TECs are not doing enough to reach small businesses. Earlier this year, a survey found that only 10 per cent of company owner-managers had used their local TEC.

A Department of Employment spokeswoman said the surplus 'will go back into the work the TECs are doing.

'All their money must be spent on defined areas and must be used to further their business objectives. For example, it can be used to help small firms in their area.'

She said the incorrect payments were only an estimate. Nevertheless, 'we are still keen to do as much work as possible to prevent errors arising. We are doing a lot of work in that area'.