Select Committee on Education and Skills Minutes of Evidence


Examination of Witnesses (Questions 120 - 139)

WEDNESDAY 30 JANUARY 2002

MISS JANE OWENS AND MR JOHN RODGER

  120. Does that indicate that the ILAs were failing to hit the target group?
  (Mr Rodger) There was a universal element to these accounts. We were evaluating that in relation to a policy perspective, which had a universal dimension as well, so we were not surprised to see the results that we saw. The amount of targeting that went on in terms of marketing was not significant. It is also quite clear that a supplier lead approach was being used to market the initiative and they will market at the point of least resistance in many cases. It was not surprising to see the results that we saw. That is one of the conclusions and recommendations that we drew, that if they wanted to get further into the new learner target group they would have to adopt a different approach to marketing and promoting the initiative.

  Paul Holmes: Last week we heard from two Department for Education and Skills officials who drew up the scheme. One reason why it was so loosely based in terms of providers and so on was that they wanted to go beyond the normal providers; they wanted to go to people they did not normally reach. That is one reason why there were so few checks against fraud and abuse. You are saying, from your findings, that they have not reached the target audience because it was so loosely marketed.

Chairman

  121. I am not sure that John Rodger did say that.
  (Mr Rodger) There was a universal approach, plus some target groups. In terms of market groups we identified the 18 to 30 year olds, and non-teaching professionals. They clearly did not make many inroads and clearly did not make massive inroads into the non-learners group. It is quite clear from the way in which the programme was promoted and structured that they were not going to do that. It is not surprising that they had such a low new learner figure on that basis.

Paul Holmes

  122. From the studies that you carried out, could you draw any conclusions as to whether there were other more effective ways? For example, if you gave tax relief on vocational education, would that be a better method than ILAs or are there better ways than this failed experiment?
  (Mr Rodger) It is quite clear that in many respects the ILAs captured the imagination. The take-up has been substantive and the feedback has been positive; people like them. The little chunks of learning have been very good. Clearly, what has not been very effective is reaching the non-learner group. If you want to take this forward, rather than trying to design very heavy quality assurance measures, which may go against bringing in lots of new providers—that is one of the issues—perhaps you would want to piggy-back this on the back of existing target initiatives. You may want to try linking the ILAs into education maintenance allowance; you may want to link it into, as we have done, an initiative from the TUC—the Union Learning Fund—and link it into targeted initiatives rather than leaving it as a stand-alone activity for the targeted elements. If you still want a universal dimension to it, that is another issue.

Mr Pollard

  123. Did your research suggest how learners chose which provider to use?
  (Miss Owens) We did not ask the specific question of how they decided. We asked them whether they had required guidance and who provided the guidance. We did not tease out those issues.

  124. Should that question have been asked?
  (Miss Owens) With hindsight, that could be something for any future evaluation.

  125. That may have led us into the worry that transpired at the end.
  (Miss Owens) What became clear from the findings that came out of the research and out of the discussions with the providers, was that they were tending to tell people who turned up at their door who were interested in learning, "By the way, you may want to apply for this account".

  126. Last week I asked James O'Brien from the Association of Computer Trainers whether the situation was recoverable and he said that it was providing that we got on with it quickly. Is that your view?
  (Mr Rodger) I do not think that we can comment on that. We do not know the extent of the issue. We do not know the extent of the fraud or the extent of the dissatisfaction in terms of account holders from, say, November or October. In terms of the basis of the information that we have collected, we did not identify any issues from the account holders' perception that they were dissatisfied. Whether that was something that happened from late summer onwards we do not know. Our second survey was picking up people who had opened their accounts between May and July. Whether that was something that happened in late summer, in which case we would not have picked it up, we do not know. We have no knowledge of the extent of the problem which has now emerged.

  Mr Baron: What kind of balance needs to be struck in providing the successor to ILAs, when it comes to trying to reach those who most require an initiative like the ILAs? It is a terrible expression but there is the deadweight factor in any universal approach. I believe that John Healey has suggested that in this case the deadweight factor is something like 40 per cent. What change will be required to ensure that we reach those who need this initiative against the balance that has to be brought into the equation as regards the deadweight factor itself?

Chairman

  127. Before John answers I should say that reading the papers I felt that we should exclude the word "deadweight". It is a pity that when we are trying to change the culture of learning in our society that the people who have received training are seen as deadweight. But we have the terminology, John, so you can use it.
  (Mr Rodger) To talk of deadweight you have to be clear about who is the target group. In terms of this initiative and because of the large universal element there is a focus issue. To answer your question, you have to be clear on what target groups you want to bring in. Is it people with skills issues? Is it returners to learning? You have to target them specifically. You would want to ensure that there was an incentive to suppliers to pick up these groups. Suppliers are very close in many cases to this target market. What has been clear from a number of TEC initiatives in the past is that suppliers have to be sufficiently incentivised to pick up the target groups. There has to be some incentive such that they will be rewarded only when they pick up certain target groups.

Mr Baron

  128. Perhaps I can press you on that. What incentives do you think should be explored and how would the providers target those particular groups?
  (Mr Rodger) It may be that you would fund accounts only for particular social categories or those with certain qualification levels. You may decide that you want to focus on unemployed people, people who have been on particular Government initiatives, those coming off New Deal, or various others initiatives and you could target those people and encourage the suppliers to pick them up using quotas. However, you have to get the balance between targeting and universality. There appears to be a tension, at the moment, between the Government policy and targeting, equity and universality. There are those who suggest that means-testing is one way of doing that. Do you think that is a good idea?
  (Mr Rodger) Personally, I do not think that means-testing is the way to go down this particular route. I think you could reach these groups, as I mentioned earlier, through existing initiatives where one is clear on the characteristics of the group and looking at it as part of a progression that would mean that you could avoid going down the means-testing route.

  129. In view of the Chairman's comment I want to say that when I first used the term "deadweight" I said that I did not like it. But we have it so I shall use it. In order to get value for money for the taxpayers, and in order to reach those you want to reach, when it comes to incentives, what recommendations do you think that the Government could initiate in order to ensure that we are dealing with those groups that need this help?
  (Mr Rodger) Despite the operation of universality, you can remove aspects of universality and give priority availability for certain definable groups, such as people coming off particular initiatives, in particular catchment areas, in aspects of deprivation or whatever. You link it to the initiatives and those would be the main people who would qualify. That is the way in which you would get maximum provision for new learners.

  130. Would that work practically?
  (Mr Rodger) I think so.
  (Miss Owens) It would be interesting to see the outcomes from the two pilots that the department put in place last year. One was "small firms ILAs" through which they were involving owner-managers of firms with up to 50 people. If the owner managers encouraged 50 per cent of their staff to open ILAs there was a free learning needs analysis. Another one was a community ILA that was being piloted in Liverpool, Sheffield and, I think, London, whereby there was funding to pay for people from the community to have guidance and expertise so that they could market and give guidance to people in their community. It will be interesting to see what happens.

  131. When will we get those results?
  (Miss Owens) We were not involved in the initiation or the evaluation of those. It was some information that was passed to us to insert into the introduction to the report.

Mr Turner

  132. I am interested in the deadweight issue. Is it not the case that the nearer you get to universality the smaller the proportion of your expenditure is deadweight? Is that correct?
  (Mr Rodger) No, it is the other way around.

  133. Perhaps I can advance that. You are more likely to grab the deadweights first because they are more likely to be active, to be interested, and to have a reason to reduce their own expenditure.
  (Mr Rodger) Yes.

  134. Are you sure you were right in your earlier answer?
  (Mr Rodger) Yes.
  (Miss Owens) The evidence from the two surveys when we asked the question, "Could you have paid for your course without the ILA?", was that the proportion who said that they could have paid for it increased. Whether they would have paid for the courses without the ILAs is another issue.

  Chairman: It is not a question of whether they would have paid for it, but whether they would have done the course. The question is never asked whether people would have done the course. Surely, the scheme was to tease people into participation. To a degree it is irrelevant whether they would have paid.

Mr Turner

  135. That is a point I had not thought of. I am worried about the deadweight argument. Clearly, the cost of targeting can be very great. If you target small firms perhaps that is less expensive. Judging by the effectiveness of the DfES's marketing, if you targeted people on very low incomes you would have high marketing costs and the learning provider would be less likely to be effective at marketing unless you gave him greatly enhanced incentives. Then you would have to check eligibility, which would cost more. On balance, do you think that universality is as unwise a course as some people may be suggesting?
  (Mr Rodger) Despite how much emphasis you want to place on targeting, I do not think that it is primarily a cost issue. If you try to target these particular groups on a universal basis through global marketing it would be very expensive and difficult. If you piggy-back it on to existing initiatives, when you are clear who the groups are, it is part of the progression, and then the costs are not significant to take it through. However, when you have this universal element you will always have to live with a significant proportion—that will always be around the 40 or 50 per cent—who might have done it anyway. It is an approximate measure; you cannot prove it. It is an approximation of what you expect to happen.

  136. On the point of delay in publication of the report, you answered as far as the DfES is concerned that that is not unusual. What about your other clients?
  (Mr Rodger) Again, it is not unusual. It takes time for the final document that we give to the department to be cleared with Ministers. It then has to be published and circulated. There is a whole programme of reports being published through departments.

  137. I was thinking of non-government clients.
  (Mr Rodger) In many cases non-government clients do not publish reports.

Paul Holmes

  138. On the question of fraud and abuse, I want to refer to your second survey where Capita gave you 1500 account holders who have used their accounts, but when you phoned them up 27 per cent of them said that they had not used them. Did you go into that? Were they people who had used their accounts, but did not realise because the training provider had organised everything, or were there some people who had never used their accounts and that was pure fraud on someone's part?
  (Miss Owens) We rang 300 of the sample so we did not go through the whole 1500. Of the 82 who said that they had not used their account, 41 per cent were waiting for their courses to start. Some were still considering what they wanted to do and a small number said that they were not sure what courses were available. In the interviews these 82 people were clear that they had not yet used their ILA; they had not pulled down any funding.

  139. If that were true across the whole range, that could indicate a quarter of ILA money, about £65 million, or a quarter of the whole thing.
  (Miss Owens) Yes. But we did not pick it up in the first survey, that was in the second survey; it was some of the people who had were registered as having used their accounts on or after 1 May.


 
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