Select Committee on Education and Skills Minutes of Evidence


Examination of Witness (Questions 380-388)

JOHN HEALEY

WEDNESDAY 28 NOVEMBER 2001

  380. Indicating serious flaws in the design and the operation of the scheme. So what steps were being considered to deal with the issues brought out by these 10,000 complaints.
  (John Healey) No, the 10,000 complaints, if I may be clear, were not necessarily indicating flaws in the design of the scheme. These were simply the sorts of customer complaints.

  381. It is a high number of complaints, is it not?
  (John Healey) Just over a quarter related to activity that suggested non-compliance with the rules of the scheme and therefore grounds for closer examination and investigation because there could have been misuse.

  382. But there were 7,500 complaints. That is a very large number.
  (John Healey) 2.5 million punters. I would suggest to you that that is really a rather small proportion of what is a very large programme. Had we had no evidence of misuse, had we not had a problem with this small minority of ILA providers that were mis-selling ILAs, misrepresenting the Department, frankly offering bogus training propositions to individual account providers, we would not have withdrawn anybody's support, we would not have withdrawn the scheme. If we had been dealing with the issue of overspending the original budget allocations, that is something we would have dealt with as a discussion within the DfES about where we should locate any priorities for additional spending, and I probably would have been through the Chancellor's door to argue for support to continue what would have been a very successful scheme as it was, but one in very different circumstances without the flaws and abuse that unfortunately crept into it.

  383. Quite apart from the overspend—and the overspend is significant, 2.5 million against 1.1 million ILAs predicted, and an amount that has been paid out in discounts that is impossible to calculate at the moment—quite apart from that, do you not accept that there were flaws in the original design of the scheme that led to so much of the budget being allocated to people who would already have been prepared to buy that training? This is what I am interested in getting at, which is the flaws in the original design of the scheme. Do you think there were flaws, or were you content with the original scheme? Could I make a supplementary before you answer the first question, in order to clarify this? We hold you accountable, and we do not envy you, having come into this post at this time, to be held accountable, but I am curious as to where the responsibility lies. We do not hold you responsible, but I think it is important, if the Committee and the Department are going to learn the lessons in designing a new scheme, that we find out who was responsible for the flaws in the original scheme and what are considered to be the flaws in the original scheme.
  (John Healey) I am concerned to assess the flaws in the scheme. I am also concerned to rethink and redesign the policy. If I may say so, I think you are returning to the territory that you were enquiring about before, which is less to do with the flaws in the scheme, the operation of the scheme, and more to do with question-marks over whether making it a universal offer was the right policy approach. I would argue that at that time to introduce something that simply was innovative and a total departure from anything that we had introduced before, that we did not know how it was going to operate, was quite a reasonable decision to take at that time. Now we are in a position to learn significant lessons both about the design of the policy for any future scheme and indeed to deal with flaws in the scheme itself and the system for delivering it.

  Chairman: Minister, we are running out of time. I promised three colleagues very brief questions.

Paul Holmes

  384. ILAs were a runaway success partly because of the training schemes investing millions of pounds in marketing and recruiting people onto these schemes. They have now lost quite a lot of that investment because of the Government's sudden decision to withdraw the whole scheme. Will there be any compensation for legitimate losses incurred as a result of the Government's decision?
  (John Healey) No, not in those terms.

Valerie Davey

  385. The good news this morning is that you have got people in the Department planning the new scheme. Are they different people from the people who planned the last one?
  (John Healey) The official who is leading the development of the policy work was not involved and did not do this job 18 months ago when the previous programme was designed. Had he been in that position, I do not think that would necessarily have disqualified him from doing the job he needs to do now. You could argue that actually he might be in a better position than anyone to do the job now.

  Chairman: It is said that the best person to invest in is someone who is in their mid-30s and has been bankrupt three times!

Valerie Davey

  386. Very quickly, you are clearly going to take advice from our own experience, from Scotland, from Wales and from Northern Ireland. Is there anywhere else in the world that has a similar scheme that we could look to to get some good ideas to restart our scheme, very literally yes or no?
  (John Healey) Very literally and very briefly, there is some similar experience in Europe. We are in fact leading a group that is trying to connect up the experience in that. We have had more experience than any other European countries in this, but they are just as interested as we are in what the sort of future of this type of policy and scheme could be.

Mr Turner

  387. Lots of government schemes are abused. You do not close the housing benefit system because it is abused. What is the proportion that you think in financial terms has been misspent, or might have been misspent, of this scheme?
  (John Healey) I cannot give you a financial answer to that, but it will be based on the proportions and perspectives that I have already explained about the breakdown of complaints that relate to misuse and breakdown of providers. We do, after all, have more than 8,500 registered providers under this scheme—the breakdown of providers about whom we have got serious concerns. Until we, frankly, have investigated any concerns and allegations and then done all sorts of financial background work on that, it is simply impossible to give you an answer on that.

Chairman

  388. Minister, this has been a very valuable session for this Committee, and I thank you for your patience. The good news is that because we have not covered most of the topics, we are looking forward to seeing you again. Thank you for your attendance.
  (John Healey) I am very much looking forward to seeing you as well.





 
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