"Remedial action must be swift and effective," says a report from the committee into "overpayments" for training and enterprise councils.

These training agencies provide vocational skills courses and will be central to the government's New Deal re-training scheme for the unemployed.

The Commons committee criticised the training councils for failing to provide adequate checks on the quality of training provided, particularly courses leading to the employment-related National Vocational Qualifications.

In 1996-97, the committee says overpayments to training and enterprise councils for inadequate courses or those that did not take place increased to £14.6m. Since 1995 there were more than 70 cases of irregular payments, with 39 still under investigation, concerning £7.6m.

'Position has deteriorated further'

Training and enterprise councils have in the past been the subject of questions about financial mismanagement.

"Over the years, we have been promised improvement in the financial control of training and enterprise councils which have not been delivered. If anything, the position has deteriorated further," the committee's report says.

"The rate of error remains too high and cases of malpractice are increasing. The demands on training and enterprise councils will increase rapidly in the coming years as they participate in the New Deal.

"It is essential that the legacy of repeated failure in financial control is addressed."