Exclusive: Dismay as taxpayers save firms £175m on training

The Government has already chopped back the Train to Gain scheme after a Business Minister branded it a "deadweight cost" and the National Audit Office concluded it had not provided good value for money.

Supporters say it has helped more than a million people gain extra skills and boosted the performance of companies, with more than 90,000 people in Yorkshire and North Lincolnshire helped to get qualifications.

But the revelation of its full cost – at a time when the strain on the public finances is putting all public spending under intense scrutiny – will fuel criticism of a scheme which has cost taxpayers more than 1.5bn nationally over four years.

Anne McIntosh, Tory MP for Thirsk and Malton, said: "At a time of austerity and recession, I got the impression that the Train to Gain was a colossal waste of taxpayers' money. It wasn't being directed at those training requirements most needed by employers."

David Ward, Liberal Democrat MP for Bradford East and a member of the Commons Business Select Committee, said: "We're not doubting some useful training has taken place, but the question is does that need to be out of public funding when most of that is just basic skills training which employers would be involved in anyway?"

Train to Gain was set up in 2006 as a national service, funding free and subsidised adult education in the workplace so employers got a better-qualified workforce able to boost the company's performance – and ultimately help the economy.

But its performance has split opinions, with Labour defiant about its importance despite the National Audit Office reporting that "while Train to Gain has achieved undoubted benefits for employers, the NAO has concluded that over its full lifetime the programme has not provided good value for money".

The most damning charge by the NAO was that half the employers whose workers benefited would have arranged similar training without public subsidy.

Between 2006 and 2010, 175.94m has been spent in Yorkshire and the Humber paying 64 companies to provide training.

Some 91,400 people employed by 21,249 companies have received help. Spending has soared from 15.16m in 2006/07 to 79.23m last year.

But with both coalition partners critical of the scheme, its future appears bleak. Already 200m has been cut from this year's budget – which has been slashed to 757m – and diverted into apprenticeships and building projects at colleges.

Business Minister John Hayes told MPs recently: "The problem with Train to Gain is its deadweight cost – a fact that the last administration were unwilling to face up to.

"The evaluations of Train to Gain suggest that it is used to support all kinds of training that employers would have funded anyway and to accredit skills that already exist."

The Department for Business, Innovation and Skills and the Learning and Skills Council said the scheme had been largely successful, achieving a success rate of 71 per cent.

A spokesman said a consultation on a skills strategy had been launched.