Select Committee on Education and Skills Minutes of Evidence


Examination of Witnesses (Questions 120-139)

MR BRYAN SANDERSON AND MR JOHN HARWOOD

MONDAY 12 NOVEMBER 2001

  120. We will be seeing you next year.
  (Mr Harwood) There are a number of issues here and audit gets mixed up with inspection which gets mixed up with other activities. Let us deal first of all with audit, both financial audit and data audit. There is a very large amount of money which is flowing into individual institutions, the average we are talking about is about £9 million for a college—every college gets more than £4 or £5 million, some of them get very significant amounts of public money—and it seems to me perfectly proper that money should be audited, that the public authority should know where it is going. Indeed, I am accountable, as you know, to the Public Accounts Committee for how that money is actually being spent. Now it may be that the process for doing that is not as simple and as efficient as it needs to be, and certainly one of my concerns is that all sorts of bodies—you, for example, the Public Accounts Committee, the Government, the Department itself—need to have data, we need to have data, you expect us to have data. In one of your early reports you expressed the hope there would be more data about sixth forms, for example, which you felt there was insufficient data on.

Mr Shaw

  121. We inherited that!
  (Mr Harwood) All of us want to see more data but we want to see it being collected in a more efficient and less obstructive way. Certainly that is what I think we ought to do. I think you cannot have a situation where we have 21st century data requirements which are collected by 19th century data means. One of the activities which we have already put in place and which we are working on with colleagues in the Association of Colleges is to try and find a way of investing in systems which allow data to be collected more efficiently. At the moment, colleges have to make their own arrangements, some of them are very expensive, if you are a small college then the overhead cost of a new computer system is quite considerable. These are early days but we hope to be able to rationalise that in a few years and have a more efficient and consistent way of collecting data.

  122. You talk about the process which leads to all this auditing, is that because we have so much bidding rather than core funding?
  (Mr Harwood) This answer is like a stone rolling down, acquiring more and more bits and pieces I need to comment on. That is certainly one feature of it, that there are a lot of different pots of money, quite often small pots of money, which require the same sort of auditing burden as large pots of money. One of my ambitions, if you want me to flag something up for next year, is that we can begin to reduce the number of different pots. We have discussed this inside the Council and we have already set out to aim for a system where the Learning and Skills Council pays a fair price for the service which is being rendered, and you do not have that then complicated by off-programme funds which individual institutions need in order to subsidise their main core activity. There is a big opportunity there for different routes through which money flows and where there are not too many of those routes. All of that was on the whole issue of auditing and, of course, your question mixed together audit and a range of other activities of which the next biggest one was inspection, which is of course different from audit. You will need to ask Mike Tomlinson more detailed questions about this, it is not my area of responsibility, but if you look at the underlying philosophy and way of operating of the FEFC's inspectorates inspection regime, it has been quite significantly changed through to the OFSTED inspection regime. The FEFC inspection regime had a significant proportion of self-assessment, for example, the OFSTED inspection involves much more observation about what is happening in particular parts of the college, curriculum areas of the college. There is an issue there which I think you may want to ask Mike Tomlinson about.

  123. Do you have a personal view?
  (Mr Harwood) I do not have a personal view. You exhorted me earlier, or the Chairman did, not to have personal views—
  (Mr Sanderson) I do not have a career to look after!

  Chairman: We were suggesting your personal views were of great interest to us.

Mr Shaw

  124. Is it something you will be discussing with Mike Tomlinson in terms of the effectiveness of colleges to be able to meet all the objectives by 2004? Yes, the inspection process has to be rigorous but you do not want it, surely, to hamstring colleges which they are saying is happening at the moment? That will be something you will be discussing?
  (Mr Harwood) You can put that down as my personal opinion.

Chairman

  125. Mr Sanderson, surely you have a personal view on that? If a college is doing well, if it is motoring, if it is doing its job and delivering, surely, to use your business experience, you would want a lighter touch inspection on that than where you have problems?
  (Mr Sanderson) Two things I will say. Firstly, just that, if they are doing well and they have a proven track record, there should be a much lighter touch, and that would be quite standard practice in business, as you rightly say. The other thing which appears to me to be missing is a concept of scale quite often. Many of these processes and systems are designed with some entity in mind, which normally is a significant one, because that is what people think of, a large college or whatever, and then the same set of processes with a plethora of questions is applied to a very small institution where the scale of the outcome is one-tenth or even one-hundredth of what was envisaged when the thing was created. We need some sort of "small is beautiful" concept around as well, which says that items below a certain amount only get asked three questions instead of 30.

Ms Munn

  126. In my experience, one of the reasons you tend to get lots of different inspection regimes is because they have come from all sorts of different areas or are looking at different aspects. Surely we should now be in a position where we have the Learning and Skills Council which is supposed to have this over-view of life-long learning, the targets, the aims, and inspection should follow from those targets. So I would want to see rationalisation and co-ordination inspections to make sure they are in line with what has been clearly set out. In addition, I do not want to see more data but meaningful data, and we have to be a bit clearer about saying, "Why are you asking that question?" In my previous occupation I have been on the receiving end of all sorts of things and you get asked to produce things which do not mean what people are getting at in the first place. Although, as you say, inspection is not your bit, I would put in a big plea for you to be exerting the influence you have in terms of setting out what learning is about.
  (Mr Harwood) We will happily respond in due course to that invitation. Can I respond on a particular point? The trouble with data and having less but meaningful data is that quite often the meaning only comes when you have more rather than less of it, and it is one of those unfortunate situations that nowadays more and more information is needed in order to understand what is happening more effectively. I make that point not to defend any particular piece of information but simply to stress that somehow to think we can run very complex expensive public institutions without understanding what is happening in them is probably a false hope.

Chairman

  127. Yes, but Mr Harwood, when people heard that Bryan Sanderson, a former senior person with BP Amoco, had been appointed chairman of the LSC, there were bonfires in gardens that night, people said, "Look the FEFC is full of bureaucratic problems, here is coming this champion from the private sector and he will take a scythe and cut through all the bureaucracy." I went to two FE settings in my constituency in Huddersfield only on Friday and they say the bureaucracy has got worse. If you thought FEFC was bad, this is really seriously bad. So when can we expect more bonfires because we have actually burnt some of the bureaucracy?
  (Mr Sanderson) I certainly took part in some bonfires in BP. The circumstances in the public sector—and in a hundred years I shall write a book on this—are very, very different from the private sector. There are more levers to pull. First of all, John has already gone into some of the complications of TUPE. We have TUPE in the private sector as well of course but the way it is applied, in my experience, is considerably less rigid than in the public sector. Secondly, BP is rather richer than the Learning and Skills Council and it can throw money at problems. If you are a long time in BP and you get asked to leave, you probably get something like two years' salary in your hand and pension rights retained and so on, and of course with the BP label round your neck if you want another job you can usually very easily get one, the circumstances are different. Putting it on a more positive side, there are some things that one would want to do. One of the big pluses for me coming into this, as well as the social inclusivity, the staff and the sensitivity of which that is handled, is also the work life balance which is very, very different. There are rewards but there are trade-offs all over the place. There are limitations to how far you can come in with the scythe, even if I thought it was appropriate, which I do not. I do take the point that one should always be looking at the number of staff. It does seem to me, maybe this is just personal prejudice, there is a triangle that has too big a base. There are a lot of people at the clerical end of the spectrum, which you would not find in the private sector these days very much. I think, of course, there is scope for improvement, there always is.

Mr Chaytor

  128. Just pursuing the question of the OFSTED inspections specifically, the conclusions that are drawn from the inspections are clearly a matter for the LSC—without wishing to revisit the interviews on the Today programme and all of the correspondence that ensued from that—I was interested in the comments that were made following the inspections of five colleges. I was also interested that in your evidence to the Committee you said that between 1st April this year and 22nd October there was 116 inspections in total, of which 111 were of private training colleges. I did not hear any comment about the quality of those private training colleges. I would like to know if you are still concerned or is the quality issue a matter entirely for the colleges? Do you feel the first five inspections of colleges were representative and what about the other 106 of private training, were there no issues that concerned you there or did you choose not to —?

  Chairman: Which question would you like answered first?

  Mr Chaytor: It is Mr Harwood's choice.

Chairman

  129. I keep trying to get him to answer one question at a time, but I do not always succeed.
  (Mr Harwood) I am grateful for you not succeeding, Chairman, it makes it easier to the answer the question. Can I, first of all, correct a misunderstanding, I have not made any public comment on the first five OFSTED reports, let alone comments on the reports from the ALI. My comments on the Today programme, severely edited as they were, derived from the aggregate FEFC inspections over the past four years to 2001. I will talk about that, if you want, in a minute. The position of the five OFSTED inspections which have been published so far, there are some more which will be published very shortly, are that five colleges were inspected and of those in terms of leadership and management two colleges were given grade three and three colleges were given grade four. In terms of the curriculum areas, 60 curriculum areas were inspected, one was given grade one, 12 were given grade two, 33 were given grade three and 14 were given grade four. The curriculum areas fared significantly better than the leadership and management. I think a clear point to make is that one should not draw any conclusions from the five inspections. There will be, hopefully, nine or ten by the next couple of months and that will begin to give a clearer picture, but that will still be an extremely small sample. I would be very reluctant to make any conclusions from that small sample. The 111 inspections that the ALI have carried out in terms of leadership and management 12 per cent of those are in grade two, 34 per cent in grade three, 41 per cent in grade four and 13 per cent of grade five. In terms of the occupational areas that they are covering, two per cent were in grade one, 24 per cent were in grade two, 38 per cent in grade three, 28 per cent in grade four and eight per cent in grade 5. To come back to an issue which was raised earlier on, that is one of the reasons why I have been particularly anxious to extend the availability of the Standards Fund and the ability of the Learning and Skills Council to intervene to support private and voluntary providers rather than just simply inspecting them and leaving them to somehow cope on their own. That is a particular area which applies to small voluntary organisations, where that opportunity that we now have to be able support those organisations is a change from the past.

  130. Following on from that, you mentioned there are now further reports of inspections from colleges, have you seen the results of those? Do they fall in line with the first five?
  (Mr Harwood) I have not seen in writing the results so I cannot really comment on that but they do have to go through a moderation process inside OFSTED, so until they are published by OFSTED I would be extremely reluctant to make any comment on them. As one would expect, I suspect, what would happen is that they will change that initial impression. They are like election results coming in on election night, the first five results do not necessarily tell you what the outcome of the general election will be.

Mr Turner

  131. The last one certainly did not! The figures about administration, I have two questions on this, which you quoted earlier suggested that somehow there was a difference between £188 million, which is allocated now, £144 million for local LSCs and the £75 million expended by your predecessor organisations. The figure that we had from the Association of Colleges was, I think, £140 or £150 million for two of those organisations, that is the FEFC and the 72 TECs. Are you saying that £130 million was expended by the DfEE, the Government Offices and the National Advisory Council for Education and Training Targets?
  (Mr Harwood) No.

  132. Where does that £134 million come from?
  (Mr Harwood) I have not seen the calculations which lay behind it, but I think that what has happened is there has probably been a misunderstanding about the amount of expenditure by TECs.

  133. What would you calculate to be the expenditure by TECs?
  (Mr Harwood) I have not got the expenditure in front of me but you can see with the total staffing complement is something between 10,000 and 11,000 people, then clearly the amount of expenditure they were undertaking was higher than the amount you are quoting.

  134. Thank you. The second question is on the issue of the means by which you decide how much will be allocated on the funding of a particular student in a particular college, is that something that you expect to be done nationally or at the "local" (for which read subregional) Learning and Skills Councils or would it be something that can be varied more locally than that?
  (Mr Harwood) At the moment the answer must be it was a national funding formula. At some point in the future the Council may decide it wishes to introduce a level of flexibility to vary that national funding formula up or down by a certain percentage amount. That is a decision which has yet to be taken, there has been no decision that that will be the process.

  135. The national funding formula is the FEFC's national funding formula. We are now clearly talking about schools as well. Schools clearly vary a great deal from urban situations to rural, by when do you expect to be able to introduce that degree of flexibility?
  (Mr Harwood) I have not agreed that that level of flexibility will be introduced, first of all. All I am saying is that may be an approach which the Council will adopt, but it is a decision which has yet to be taken by the Council.

  136. If you were to meet the Government's target of no reduction in the funding for sixth forms which do not reduce in size clearly there has to be a level of flexibility on top of the formula?
  (Mr Harwood) You were asking a question about the Learning and Skills Council funding formula and whether that would differ on local variation from the national rates. The answer is there will be a national rate, the issue of whether there will be a local variability from that is a decision that has not yet been taken, let alone implemented. You then talk about the transition arrangements between the present situation and the future situation, where there is a common LSC funding formula which allows the guarantee to be maintained. Clearly one of the by-products of having a real term guarantee in place is that sixth form students in some schools in some parts of the country will be funded at a unit price different from another part of the country. That is the consequence of maintaining that real term guarantee. How long that continues will depend on how long the real term guarantee continues.

  137. The guarantee, as you know, is indefinite?
  (Mr Harwood) Insofar as no end date has been placed on that, yes.

  Chairman: I want to move on to widening participation.

Valerie Davey

  138. The widening participation debate has largely centred on getting more young people under 30 into higher education and clearly FE is seen as a very important element within that. I am delighted to see that your first objective talks about extending participation, I am not sure that is the certain terminology, so the objective you have of raising it by five per cent, is that good enough in four years? I recognise we are at the top end, but can you also define the structured learning which this talks about? Are you talking about 80 per cent by 2004 in structured learning? In the context of 16 to 18 year olds what does that mean?
  (Mr Harwood) It means that either in school or college or sixth form college or some institution like that or in a work based provider then a level or a way of learning which is appropriate and structured to lead to certain outcomes. It is not simply a question of a loose training regime which may be uninspected and of unknown quality.

  139. Are you confident the 75 per cent we are claiming in that situation now is sound?
  (Mr Harwood) As far as one can be when dealing with this sort of data, yes. There are obviously issues to do with the validity of data we have inherited from the past. One gets back to the issue of data collection, and so on. When we are able to secure one of the main by-products of the Learning and Skills Council, which is an individual learner record, where we know what is happening to individual young people and adults we will be in a better position to give more precise, more accurate data about the level of participation. At the moment there are estimates and adjustments which have to be made in order to produce the data, this means that in some parts of the country they may be accurate to within two or three percentage points. It is obviously very difficult for the public policy issue.


 
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