The University for Industry (Ufi) is responsible for Learndirect, the largest government funded online elearning initiative in the world.

Launched in 1998 with funding from the UK Department for Education and Skills and the Learning and Skills Council, Ufi aimed to help over-16's improve their job potential through a public-private partnership that would attract external investment.

Computing revealed that in 2004, the Ufi was struggling to attract private investment, having already spent almost £1bn of public money.

And a Public Accounts Committee meeting this week, to discuss a National Audit Office (NAO) investigation and report into Ufi, found the organization had generated just £12m in commercial income by July 2005. Ufi potentially offers value for money but it doesn’t do it profitably yet, an NAO representative told the meeting.

Ufi chief executive Sarah Jones told MPs that most of the organization’s £12m of commercial income has been generated from two public sector accounts with the Connexions service (£6m) and NHSU (£1.1m).

‘We’ve had a lot of interaction with businesses. We are reaching companies but we’re not generating enough revenue,’ said Jones.

Just 37 per cent of employers are aware of Learndirect’s services for businesses, according to the NAO report.

Jones said that Ufi aimed to increase private sector-generated revenue from just £1m a year to £40m by 2010, but MPs said the three-year target was too tight.

Committee chairman Edward Leigh said: ‘Ufi is spending a lot of money but not generating as much as expected because the organization is too complex.’

Ufi has so far spent £930m on elearning, and plans suggest it will spend a further £200m-plus by academic year-end 2006. By July 2005 about 1.7 million people had taken four million elearning courses via Learndirect. To find out more about the elearning and tax payer debacle, visit http://www.ufi.com/