A scheme aimed at boosting the skills of adults with few or no educational qualifications has failed to hit recruitment targets - even after these were cut almost in half by ministers.

Only 3,200 out of 1.3 million poorly-qualified adults in Wales were expected to have started courses paid for by individual learning accounts (ILAs) by the end of last month.

ILAs are also costing more than six times more to administer than comparable grants for other groups of learners. Despite these problems, a strategic review group including representatives of the Assembly government, JobCentre Plus, Careers Wales and ELWa, the post-16 funding agency, recommended this week that ILAs be given longer to improve.

At present, ILAs are open to adults living in Wales with level 2 qualifications (GCSE grade C equivalent) or below. People on benefits such as income support receive the full cost of courses up to pound;200 a year.

Those not on benefits, or on income-related benefits such as working tax credit, have to contribute towards course costs and receive a maximum of between pound;100 and pound;160. Computing courses are the most popular choice, accounting for around half of ILA learning.

Individual learning accounts were launched in 2000, but were shut down a year later amid fears of serious fraud and abuse of the system. The Welsh scheme was relaunched in July 2003, with a target of 10,000 approved registrations a year, 40 per cent from people on benefits.

But a report from the review group, published this week, shows that up to July 2004, only 5,294 applications were approved, and only 34 per cent of them were from the poorest groups. Of the approved applications, only 2,130 people started their courses.

In December, the Assembly government agreed to revise its targets to 5,500 approved applications and 4,200 course bookings. But despite a rise in the percentage of people who start their courses, the report estimates the number of course bookings made by the end of last month will be only 3,200.

Meanwhile, spending on marketing ILAs more than doubled, from pound;185,000 to pound;385,000, mostly on TV advertisements. Excluding this expenditure, running costs are expected to account for 16 per cent of the pound;720,000 ILA budget in 2004-05. Last year, administration costs for grants supporting poor students on further and higher education courses were only 2.6 per cent.

An external evaluation of ILAs found there was no evidence of fraud, and that the scheme “had had some success in recruiting learners from priority groups”. But the numbers of applications and learners were lower than expected - and nearly half of ILA Wales learners said they would have taken courses anyway.

“The bureaucratic complexity of guaranteeing probity and the intrinsic low demand from ILA Wales’s target groups combined to generate low levels of participation,” says the evaluation.

The review group says it is “too early to consider abandoning the programme” and has recommended changes. These include having a single maximum payment for those on different kinds of benefits; and no longer restricting applications to people with level 2 qualifications or below.

It wants to see 7,000 registrations and 4,200 course bookings in 2005-06.

A Welsh Assembly government spokesperson said: “The ILA Wales programme has so far helped more than 5,000 learners. Although this is lower than we hoped, it is still a significant contribution to lifelong learning here in Wales.

“We are introducing some changes to the scheme to make it more widely available. These include extending the scheme to those learners receiving certain benefits and increasing the amount payable to them.”