Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 59 - 79)




  59. Can I thank you very much for joining us. It is a pleasure to have you here and thank you for taking time to do this for us. Sorry to take you all at once, but we will try to give you as much attention as we possibly can and hear what you have to say. Can I ask you an opening question and that is that you have been sitting there, listening to the two most senior civil servants responsible for this programme in the Department for Education and Skills, and I do not want a long monologue on this, but what is your reaction to what we have heard this morning? Caroline?

  (Ms Lambie) I think the thing that is the most shocking is the lack of vetting procedures for learning providers and, as a legitimate training company, we just assumed that those vetting procedures would be in place. One thing I might recommend for the next system is for them to look at maybe a handling company like the British Computer Society to decide which organisation should offer qualifications. They could actually come round to look at you, your premises, what you are offering and how the system works. That seems to be one of the most logical ways of actually vetting people.

  60. So a trade association would act as a filter. Emma Solomon, can you give your reaction to what you heard this morning?
  (Ms Solomon) I think, as someone who did what the Government wanted us to do, which was to take and train people who were hard to reach and follow the rules, it is quite distressing to sit there and listen to people say, "We didn't really think very clearly about who would deliver that training, whether or not that was going to be a quality training experience", and I think your questions from the Committee really highlighted that. To spend so much money is kind of worrying, but what we also wanted to say was that ILAs in our opinion were a fantastic idea and I think we still stand by that and with the right kind of examination of people who would deliver the training in place, it would have been a great success, but I think the concern for us is that it was a numbers issue. The other thing to say is that talking about 2.5 million account holders means absolutely nothing because of that number, X per cent were people just hacking the system. What does that prove, to be honest? It seems to be common sense and our concern is not really understanding the kind of training business sufficiently and quality control and monitoring people's experiences, whether they were happy with what they got and not understanding IT systems sufficiently because anyone will tell you that a database can count, if there is one thing it can do, that is count, and to say, "We couldn't close it down, we couldn't block people", I find it worrying.

  61. We will come back to that. Roger Tuckett, what is your initial feeling?
  (Mr Tuckett) I agree with what has been said, but the main thing that strikes me is a lack of concern about the impact on learning providers. It was interesting to hear it said that one of the primary intentions of the scheme was to encourage a broader range of learning providers in and yet I lost my job at Christmas. My centre went bankrupt. I do not have a job now, I do not have a salary. There seems to be little concern or care about that. I have gained a broader perspective by helping others in the industry in campaigning in recent weeks, but I have not yet earned any money from this. There was a lot of talk about the learning-provider agreements and yet John Healey has repeatedly said that there is no contract between the learning provider and the Government and I find it very difficult to reconcile that. Once upon a time I was a lawyer and contracts and agreements were virtually the same thing. The tenet seems to be that everything will be looked at for the future on the basis of traditional civil servant timescales. For traditional college and educational establishment there is an unwritten rule that no public institution will go bankrupt, yet I know full well through my contacts with other companies in the industry that hundreds, if not thousands, of people have already lost their jobs and for every week, every month that goes on either because clear information is not given about the payment of money that is due or else clear information is not given about a successor scheme, a particular sector of the training industry has been decimated. There seems to be no consideration whatsoever, unless I have not heard it, about the connection between this group of learning providers who have been decimated and the provision of what I used to call the information society, now called the digital economy, I think, where surely the sorts of learning providers who have been savaged by this are just the sort of people whom another part of the Government ought to be nurturing in order to deliver those targets. It seems depressing that the civil servants seem more concerned about doing things in a traditional way over nine, 12, 18 months rather than setting some urgency about a sector which has been decimated in order to get them activated in order to deliver these public policy objectives.

  62. I take it we will be coming back to that. James O'Brien, you were one of the earliest whistle blowers, as I understand it, that things were going wrong. What is your view in terms both of what you have heard this morning and what you have heard so far?
  (Mr O'Brien) What I had hoped to hear this morning was information on really what would be planned to work because we deal in certainty and at the moment we are looking at uncertain times. There is no information on what is going to happen. All of the events which have taken place over the last 15 or 16 months in our view did not need to happen and they were avoidable and nothing which has been said today has really given me any indication that the future is any clearer than the past was. What I would like to say is about some information which came out and I would like to clarify and correct the point so that Members of the Committee do understand, which is that to us the biggest issue which came out is looking at the lack of quality assurance. We believe that that could have been corrected very, very easily. The Department found it within themselves to write to 2½ million account holders, yet they did not write and ask the 8,000 or so learning providers to go and make themselves known to the Learning Skills Councils, for example. It would have been very easy to do and, as Emma indicated, they could have been deleted from the database and certainly suspended from the database, so that accreditation was quite important to us. There was reference made to the Scottish system and I would like to point out that although the Scottish system, to our knowledge, is a much lengthier process, yet there is still a lack of quality assurance. They are looking to introduce that through the Scottish Quality Management System, but it was no more a difficult process and I think the Committee has actually seen evidence and sight of the application form that learning providers were required to submit, which is meaningless. The Department also mentioned that a lot of consultation took place, but a lot of it was telling rather than consulting. There was also reference made to the fact that lots of information and advice was being given to learners, yet all those learners were pointed to one advice line which was learndirect which is relatively self-promoting and a contradiction in terms as the DfES wanted to encourage new providers, we would really challenge that to one particular route, which was not particularly helpful to the learning industry at all. We also take objection, I believe, to the fact that the reference was made to the training industry and learning providers making fraudulent claims. These people that the Department will discover or know about already, they were not learning providers and I think what will come out at the end is that none of these people were in existence prior to the ILA scheme being found, so we object to them being called training providers because they are putting a slur on our industry.
  (Ms Solomon) I think on the back of that as well, which is kind of tied up, is John Healey, or everyone has said it really, basically saying, "If, as a learning provider, you participated, now it is actually your fault that you are now in a bit of mess", which for genuine training providers, who are not the people that James is referring to, is pretty hard coming on the back of the mess that has already been created.

Mr Turner

  63. Mr O'Brien, you have a lot of experience of providing training. Have you participated in schemes in the past where the bulk of the payment for training does not come from the consumer and do you see a relationship between personal cash and, shall I say, caveat emptor?
  (Mr O'Brien) Yes, we have been involved in traditionally funded programmes through the Employment Service or through the Training and Enterprise Councils where often it is disadvantaged groups or individuals who are being funded to put them through training. That training takes place. We are not a main provider in that area. There are lots of very good companies out there delivering that training as well, so yes, we have some experience of those. Where an individual is both in the employed situation and also being sponsored and funded through the government programme and has not made much of a personal contribution, we find that their ownership of that particular learning experience is limited because they have not paid for it and they have not lost anything if they do not achieve it, so we have certainly found that the more that an individual contributes to the scheme, the greater their ownership and the greater their desire actually to complete that course and complete that experience.

  64. Therefore, one would expect a higher level of quality assurance to be provided initially where the consumers were not making a significant personal financial contribution?
  (Mr O'Brien) Indeed. We were astounded that the lack of quality accreditation was so great. It did not exist and that led to much of the problems advised to DfES in terms of the whistle blowing reference, and that led to it being very apparent to all training providers, not just ourselves, that it was open to abuse from day one and indeed the scheme was abused from day one when it was in an uncapped period when you could achieve 80 per cent funding of whatever the amount was. That was capped pretty soon after the opening which led to a lull until unscrupulous organisations and individuals found a way around the new loopholes, which indeed they did.

  65. Mr Tuckett, could I ask you what information you have been able to gather to back up your suggestion that large numbers of individuals have gone bankrupt or lost their jobs and that huge amounts of money are owed by the Government to training providers? Could you put some figures around those assertions?
  (Mr Tuckett) Taking the last point first, I do not have detailed figures. I am certain the Department for Education and Skills would. I have talked to a large number of people and many of them are concerned about, "If I don't get paid within the next week, I will have to lay off staff". I would say that the majority of them typically who employ four, five, six people have laid off two or three members of staff already. I would say with the majority that has happened and it is a question of can they survive in business. Survival depends either on shifting to other areas of training, which maybe is open to some and it is not open to others. It depends on whether it is being run by an individual who can afford not to pay himself for two, three or four months. Whether the organisation goes out of business depends on quite a lot of the lease commitments and how many reserves they have, so there is no detailed survey which has been carried out. There is a lot of soft data, if you like, but the people I have talked to do suggest that 30, 40, 50 per cent of learning providers will go out of business. It is very difficult to get information on the size of the market, but I am assuming about 1,500 IT training centres employing maybe 5, 6, 8, 10,000 people and of that sector 20, 30, 50 per cent will be squeezed out and either lose their jobs or they will be forced to move into other areas of training.

Mr Pollard

  66. Mr O'Brien, you said that this was avoidable and you have made great play about that. You have not said how it could have been avoidable. There is also the question of, "We told you so", but what did you tell them? Did you actually tell the Department and have you been asked since for your views so that this situation could be avoided? You also mentioned lack of quality assurance and what we can do there, that the scheme is simple and attractive, but finally, Mr O'Brien, is it recoverable, this enthusiasm that was about? I have lots of women returners in my constituency who came along and said, "Wow! This is excellent", completely computer illiterate, for example, and suddenly the whole thing opens up to them and it is a new world, personal development, all of that. We can lose that and I am most anxious that we should get on and I think you are absolutely right about timing, so would you take us through that?
  (Mr O'Brien) In terms of why I mean it was avoidable, in our opinion putting in place some quality assurance checks that could piggy-back off systems which were in place, not to create a bureaucratic nightmare and increase the costs of running the scheme, and that is why we believe in terms of training providers that were known in the industry and known in the local environment and known in the local community through what were the TECs and are now the Learning Skills Councils, then it would have been very easy for the Department to actually accredit through that situation, so if the training provider was known, then that was stage one of the process, not without its flaws, but stage one. That would not have prevented new providers coming into the industry who could then make themselves aware to the Learning Skills Council, in this case, so that was stage one. Stage two of the accreditation process would be again to piggy-back off other bodies. Emma mentioned the British Computer Society as one and there are many others out there who do put in place and do have a system to check that the training given through an establishment, through an organisation, whether it is a training centre, distance learning, and there are lots of distance learning bodies which are very successful, there are lots of areas where the quality accreditation could have fed off those schemes again rather than actually going out there and creating a new scheme.

  67. So a slower approach and not concentrated on pure numbers, but a more qualitative approach and more gradual?
  (Mr O'Brien) Get the quality right and the numbers will follow. Quality is very important to learners because they need to feel that where they are going will actually achieve what they are aiming to do and we know through experience and with hindsight that a lot of the learners which have been through the experience actually have not had a very good experience and that is very important. We believe that through having an accredited system, it would have opened it up to a much broader section of people, and people we have mentioned in terms of returning to the work market have found that this is an ideal way to help them get back into the learning environment. It was not just that section, but that was one section which certainly found it appealing.

  68. Is it recoverable?
  (Mr O'Brien) The longer it goes on, the less likely it becomes in our opinion because the training industry is suffering. Roger has mentioned people and we have got evidence of that. We have conducted a survey which we have released now which you have sight of which says that the longer this goes on, there is a problem. It is recoverable and it is for the Government to create brand awareness of the scheme called Individual Learning Accounts. We have actually met with the Department, with Hugh Tollyfield, and actually discussed our views and concerns over the programme and in that we have also stated, "The quicker you do something, the quicker you can recover it. Don't throw the baby out with the bath water". Individual Learning Accounts is a scheme which is well known and it would be a shame to replace that and call it something else. It is recoverable if it is done quickly. I mentioned earlier the certainty required and what training providers need is that certainty to say when the new scheme is coming. If we get that certainty and if it is April, if it is June, if it is September, we can deal with certainty. What we cannot deal with is an uncertain, "We are reviewing it. We will let you know when it is coming", because by the time it has arrived, the spectrum of choice for learners to go to training providers will have diminished in their local community because training providers will have gone out of business. As Roger stated, he knows companies and we know companies. We have personal experience where some of our training centres are either having to withhold future investment or actually withdraw from the training market altogether and that is not good.

Mr Chaytor

  69. Could I ask my question to Mr Tuckett and Ms Solomon. In terms of your own companies, did your companies exist before the establishment of ILAs?
  (Ms Solomon) Yes, we started in 1997.
  (Mr Tuckett) In my case, no. I set up less than 12 months ago, really not with the idea of being a training company, but with a view to establishing a non-profit-making organisation within the community to avail it of the information society.

  70. My second point is in terms of quality assurance, whether a trade association or some other mechanism, in terms of the monitoring of quality once the activity has started and once the company has been accepted as a bona fide learning provider, what kind of monitoring do you think you ought to be subject to and would you have been involved with ILAs if the funding had been output related and not entirely input related.
  (Ms Lambie) I think one of the things which could have been done, every student that had to sign up for a course signed an enrolment statement which had their details on it, and a number and I assumed that after sort of three or four months of using the scheme, we would get a visit and someone would check those enrolment statements and maybe would do spot-checks on some of the people listed on those enrolment statements and ask them what their learning experience had been like and that was one of the definite ways they could have checked whether people had had a satisfactory experience.

  71. In terms of returns to Capita, there is no further return needed once the original enrolment was given.
  (Ms Lambie) They perhaps would check that the enrolment statement had been completed. We have got them all in the office and there is no other return to Capita in any other way at all.
  (Ms Solomon) I think there is also an issue here of re-inventing the wheel as well which ties into what James said about going through bodies which have already put their rubber stamp on training organisations and recognising people where they exist. The same sort of mechanisms can actually be relevant to the feedback of students. For example, for five years we get feedback from every single student who goes through Hairnet and we make sure we know and are perfectly satisfied that they have learnt something. It is not tied in with qualifications, but it is about quality of training and I think the DfES have got slightly tongue-tied about that. We are not saying everyone has to come out with a qualification, but they have to think they have had good value for money and they have learnt something. If you then have a raft of training providers involved with the new scheme who do their own quality control, because if they are not doing it anyway they are pretty poor training providers, and then, as Caroline says, spot check, assess that, you would have a scheme you could monitor without huge amounts of bureaucracy that would be quite straight forward.

  Chairman: Would you name who are asking questions to?

  Mr Chaytor: Yes, I did that. I put it to all three of them.


  72. That is the last time you get away with that.
  (Mr Tuckett) I think the question was would I have set this up if there was output related controls. I would be delighted with output related controls. I would be uncomfortable if those were required to be formal qualifications because the average age of our learners was about 58 to 60, some of them were into their eighties even. I think there are other means of setting and measuring those with an auditing process. There might be cash flow problems if payment for the learning was dependent on completion of all the paperwork, which would need to be looked at. Yes, the application form to become a learning provider was ridiculously short. In fact, I went on to become a UK online centre and also to become an ECDL testing centre. The latter of those involved a visit to my site looking at health and safety concerns but not one iota of that was done for ILAs. For those who have not seen the learning provider application form, it is name, address, telephone number, bank account and I promise to follow the rules.

Mr Shaw

  73. In your written evidence to us, Mr Tuckett, you talk about the replacement scheme and you say that the effective monopoly of LSC funding to colleges and their franchisees needs to be examined. Do you think that a regional or sub-regional administrative or commissioning body, such as the LSCs, would be better placed to target where the need is greatest and also to provide quality assurance, which we have heard so much about? It is very important dealing from a centralised position to ensure that. Yourself and the other providers will be aware within their areas that they operate who is providing a good quality service and who is not providing a good quality service. I also think Government will be able to make comparisons as well.
  (Mr Tuckett) The short answer is yes, yes and yes. There has been a lamentable failure, frankly, in the current arrangement, which is national. Whether or not it is the LSCs or not I get a warm feeling that the LSCs are well placed to deal with this although you do get slightly the message that LSCs do have administrative issues to deal with.

  74. Twenty five million of them.
  (Mr Tuckett) And they are an organisation in transition.

  75. May I ask the same question of Mr O'Brien.
  (Mr O'Brien) Could you repeat it, please?

  76. I want to understand for the replacement of the ILA system your perspective as to whether a system organised on a regional or sub-regional basis would be a more effective way to commission to learning providers, both large and small. Not only would they ensure a better financial checking but also the quality assurance, which we have heard so much about this morning. We had the TEC pilots as well.
  (Mr O'Brien) In all of our experience training for most people, particularly at this level where it is pitched at, is a local experience and, therefore, to control that locally or regionally is a far better, more effective way to ensure that it is reaching the target market. The answer has to be yes. The TECs were doing a number of pilots which were successful because they understood who they were dealing with and were, therefore, able to make sure that the learning providers were known but equally would not prevent new providers coming in. The answer has to be yes, locally to us would mean that the scheme will have a far better chance of success.

Mr Simmonds

  77. I would like to ask Ms Solomon and Mr O'Brien, one of the problems that has been alluded to already is that nobody checked whether the enrollment had actually taken place or not. Were there any other problems that you encountered with regard to Capita and their administrative systems?
  (Ms Solomon) The big one has got to be what happened when the deadlines were announced about the closure of the scheme because you will all know that those registrations took place on the website and not only slowed down but actually crashed and went out of action. Number one, when we were working to what we still thought was a December 7 deadline, because things that usually took two to three minutes per registration were taking 40, from Hairnet's point of view we had to employ people to actually come in for extra hours to do that, to process the numbers, so the whole system froze basically. When the deadline was then scrapped it was pandemonium, it was chaos. All of us have got claims we are still waiting to be paid for, so that is training delivered by our trainers from as long ago as October which they have not been paid for, so that was quite a nice way to spend Christmas for them, and claims that we would have got through before December 7 if they had not moved the goalposts.
  (Mr O'Brien) In terms of the processes that were involved, the checks were nil and, as somebody stated earlier, with it all being web related it was "yes, this person has started the course" and confirmation seven days later that they were in existence. There were no checks on the individual's contribution. The point I mentioned earlier was the greater contribution from the individual the more likely they are going to be committed to do that. There were no checks. The enrollment forms, which all training providers have, had a tick box and, again, in terms of the fraudulent use of that, tick the box and it says the money has been paid. That money will hopefully be recovered but a lot of it is long, long gone now. In terms of the closure of the scheme, the Capita database and the references that it had been closed down, because training providers or organisations had access to the Capita database, once you were into that system if you were given a password to get in there as a training provider you could go and tap in anybody's number and come out with the money being drawn down into your area. If you go back to the summer when the first announcements were that one million accounts had been opened but two and a half million had been registered, that meant you had a 60 per cent chance of hitting a number that nobody else was going to use. That happened on many occasions when learners went into a training provider, gave them their PIN number to access the system, the learning provider would then go on to the system and find that person's money had already disappeared. The problems that then came from that were that Capita would not allow the learning provider to try and interrogate that, the learner had to go and contact Capita themselves who would then tell them where the money had been withdrawn from. A lot of people could not be bothered to do that but those who did would then phone the companies, if they could get through to them, and find "I am very sorry, we must have mistyped the digits". That money was long gone. How many people did not bother following that up? That all goes into that scheme. Just one final point on that. It all comes back to the accreditation of the learning providers. If you had some accreditation then the only people going into the scheme and being given the passwords would have been approved. When you have got 8,000 or so people who have got access to a system it is open to abuse.


  78. Here you all are whingeing a bit about what has gone wrong but some of you did quite well out of it when it was running. Is it not the fact that some people would argue that you really wanted tighter control because you did not want competition to come into the system?
  (Mr O'Brien) No. We believe competition is good for the market because it gives people a choice and also keeps prices competitive. I will just talk about our own organisation, the Pitman Training Group, rather than the Association of Computer Trainers I am representing. In the year prior to the introduction of ILAs when there was Vocational Training Relief, which has now gone, and then in the first year of ILAs, our business grew by five per cent. So it was not ILAs which exploited the market. Obviously a lot of ILAs were sold and a lot of the people who trained with us used ILAs as a means to fund their training whereas previously they would have used Vocational Training Relief. It was not something that said we want to keep it tightly controlled so that we will benefit and nobody else will. Bring in the competition, that is fine, it is good for the market.

Valerie Davey

  79. I would like to go back to Emma and Caroline, please, to say first of all that individual constituents have written to me and have benefited from your scheme in Bristol, so thank you for that. From your experience, what advice would you give to the Government on what those outcomes should be for the individual learner, your niche market, your older person, first of all in general terms and, secondly, to avoid perhaps Government input into those generally professional semi-retired who would very much like to get back into IT who can actually afford to pay? So two aspects, general advice and perhaps targeting their resources.
  (Ms Lambie) I think in that sense the only way you could actually vet the experience of people is not to follow their qualifications but to speak to a selection of people who have gone through training and ask them what their experience has been and what the outcome has been, or to vet the companies who have a separate criteria who are providing the training for particular age groups or particular types of people and look at what the training systems are that they have got in place. Maybe to consult companies, like us, who are particularly working with that age group. We can say on a consultancy basis before the system goes into place "these are the things that we are doing, this is what the over fifties want" and learn from our experience because I think that was the problem when the DfES actually consulted training providers to ask them how it worked or what kind of people they were training.
  (Ms Solomon) I will go for the answer what would we advise the Government. I think it would be, as I said at the opening, you have a very good scheme here and one that would not have been possible to run, and I think that is part of the stupefaction of many of us sitting here that it was not actually rocket science to put some proper checks in there for training providers and learners. I very much agree with what James said about building a brand. A lot of people know about ILAs now but, unfortunately, a lot of people know about ILAs and, therefore, bad trainers and problems, etc., etc., and this makes the whole timing issue of that relaunch even more imperative. The apples are going mouldy now, they are not just bad, it is clear the barrel out and start again. There is no reason why making amendments to the existing system could not be made quickly. It is very frustrating hearing evidence from the Department for Education and Skills, people saying "we do not how long that might take". Any other business run on that footing would be in dire trouble. That is what is alarming.

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