Select Committee on Education and Skills Minutes of Evidence


Exmination of Witnesses (Questions 280-299)

MR GEOFF HALL AND MR MICHAEL STARK

WEDNESDAY 6 FEBRUARY 2002

  280. On the approved lists there might be concerns from the small training providers that they do not know the people involved in the LSCs and TECs—"they all seem to be the same people—different meetings, same faces; we are not part of that outfit within the local community and we are going to be squeezed out; whereas the existing system at least provides a level playing-field for us". We have seen quite a large growth in the number of new providers coming on-stream, and then the learner has far more choice rather than there being just a local institution such as yourselves.
  (Mr Hall) Can I come back on that because I think the area of quality assurance falls rather more within my remit and at a high level of policy. The direction that states that all providers should satisfy these threshold requirements is built in to the remit of the Learning and Skills Council. You say that lots of new providers have been brought in, but how do we know whether those providers are any good?

Chairman

  281. Because the consumer has had training and enjoyed the training, and the scheme got through to people that were not previously reached.
  (Mr Hall) I am not sure that the statistics back up all of those assertions, Chairman.

Mr Shaw

  282. We do not know at this moment, do we? We have not got any way of testing that, so the Chairman might be right or you might be right. That is the problem.
  (Mr Hall) Absolutely, and if I am doling out public funds, I think I need to know.

  283. What about the range of courses on offer in terms of the discount; if we are seeking to bring in more potential learners from groups that otherwise have not had any qualifications, do you think the answer is to widen the availability of the type of courses on offer? Again, that might squeeze out some of these poor trainers. Is IT training easy? Is it rich pickings?
  (Mr Hall) In having five or six questions, I will keep to the ones I can answer! In very broad policy terms, which I think this Committee will be interested in, we are at a very interesting moment of time. Parliament has removed Schedule 2. That was a very useful template for what we could and could not fund as far as the Further Education Funding Council was concerned, and therefore there are certain types of provision such as Feng Shui and so on, which did not fall within Schedule 2 and we would not fund. It is a big challenge for the Learning and Skills Council to decide how it will fund provision that previously was not incorporated in Schedule 2. What priority should it give to that? While there are strong arguments to say that kind of provision is a good first rung back into learning, on the other hand we also have a corporate plan to deliver targets for improving participation 16-19, for raising attainment levels at levels 2 and 3 for young people and adults, and there is a big policy issue about how much of your limited funding you devote to that kind of provision. It is a similar issue with workforce development. Perhaps I should bring Michael in now because that is the territory where we think it should be expanded.

Chairman

  284. It would be useful to hear from Mr Stark at some time.
  (Mr Stark) It would be useful to bring together the issues that are funded through ILAs, and those which are funded through all the other provision for further education. We have a budget of about £2 billion, which goes to supporting further education for adults. That travels either through colleges or through other training providers. Part of what it funds is precisely the sort of activity that we are also promoting through ILAs. I draw attention to the "Bite-Size" programme that ran last year, which was extremely successful. It will run again this year. We put about £4 million into that, and that will bring in 70,000 learners at about £55 per head. That is a very cost-effective way of drawing on the infrastructure which you, the tax-payers, are already funding through the system; and it carries with it all of the quality assurance and all of the inspection regime, and it also offers the opportunity to draw in new providers because they can work with colleges and deliver things in local settings, which can be extremely effective. I think that we should regard this as a totality, not as a separate little programme that grew into a very large one, but as a community with interests between the providers, the learners and their employers. That is where we will take the direction of the Learning and Skills Council planning and strategy.

Chairman

  285. Was not the whole point of ILAs in their original design to empower the individual, and in a sense to keep them separate from your bureaucracy? I do not use that in a negative way, but a very simple system that empowers the individual to go out and choose the kind of learning that they want to get and to trust the consumer? It seems to me that as soon as we start saying that everything has to be quality assurance, we are in danger, if we do ILA mark 2, of losing the effervescence, what was good about the ILA. In a sense, what is worrying me about Geoff Hall's view is that he seems to want to get his quality assurance on it, and perhaps he and your organisation will kill the fun out of the scheme, the fizz.
  (Mr Hall) I hope not. There are two types of quality assurance, are there not? There is whether the providers themselves are up to snuff, whether they can deliver genuine training, rather than handing out a videotape and a book and making a quick killing. The second aspect of quality assurance is whether they are delivering qualifications. Again, Parliament has legislated and said that there should be a rigorous framework in qualifications, and that Section 97 approval is required.

  286. Not for ILAs.
  (Mr Hall) But how are you so sure that the consumer knows what product they are getting?

  287. ILAs were not intended merely to deliver qualifications; they were to get people back in to the learning process.
  (Mr Hall) There is Michael's "Bite-Size", which we fully support, but you were saying that ILA's led to qualifications. I do not think that that is necessarily the case. We do not know that that is happening. We do not know how many have progressed into qualifications, do we?

  288. Does it matter?
  (Mr Hall) Well, I think it matters in as much as my Council has adopted a corporate plan that has clear targets devoted to the achievement of qualifications, and I think they are the Government's and Ministers' priorities as well.

  289. John Healey, the Minister, came before this Committee and what he seemed passionately to believe in is that attracting people back in to learning might start the process to the qualification, but in a sense what I am seeing is a real difference between the LSC kind of philosophy and the original concept philosophy of ILA schemes. What we are worried about in this Committee is that if you, as the LSC, take it over, you might drive out the very essential ingredient that was so stimulating.
  (Mr Hall) One of the difficulties about the ILA scheme is being quite sure which of the number of objectives that it carried were predominant. I was involved in the policy discussions in 1997 to 2000 and one of the key things about ILAs was the account, as one of the previous witnesses emphasised. The idea was to try and lodge in our culture the same attitude towards a learning account as most of us would have towards a pension and mortgage. It was specifically not targeted at those most disadvantaged. The argument was that fee remission schemes and other projects, including European-funded schemes, were the best way to bring them back into learning. You asked some of these questions yourself, Chairman, to earlier witnesses: was this not in essence a middle-class scheme because the middle class taking to this, changing the culture, would pull through the rest? Michael outlined to you the scheme for working with companies. We have heard how excellent the trade union schemes were, and there is great excitement in small and medium enterprises about company learning account schemes. There is tremendous effervescence around those sorts of schemes that can be embedded and sustained over a period of time, to deliver high-quality learning. That seems to me to be a very worthy set of objectives.

Chairman

  290. I hear what you say, but what I am trying to get out of you, as a witness, is what you think about the ILAs. I am getting a very distinct feeling. We have had a lot of witnesses here who have said, "there were a lot of problems with it, but it was a really good scheme". We have heard that said this morning. What I am getting from you is that you did not like the scheme; you thought there were some fundamental problems with it. I get the very strong feeling that you have a very negative view of the ILA both in its conception and the way it turned out.
  (Mr Hall) No, I think that is absolutely untrue. We were enthusiasts for it; we ran two precursor schemes that we passed the evaluations to you on—the Pathfinder Scheme and the Fee Discount Scheme. As Michael will tell you, some of the very exciting ideas that we think we have for how an ILA mark 2 can be embedded, linked in to other initiatives, can make it very successful. I think certainly from some of the experiences we had in the further education sector, particularly with the demand-led element, which the Principal of Preston College alluded to and Mr Chaytor asked questions of earlier witnesses on, did make us cautious and circumspect about some aspects of the way this particular scheme was implemented, but just as with franchising, although there were many unfortunate episodes, we brought in 700,000 learners. If the scheme had continued, if the demand-led element had not been withdrawn, it would have gone over a million. Many of those were new learners. There is a difference between being excited by a concept and wanting to see it work over a long period of time—if ILAs are to work, they are such a big idea that they have to work over ten or twenty years, have they not? They have got to work so that you open them for your grandchildren to pay for fees in 2020; they cannot just be a small-scale initiative.

  Chairman: I think the Committee would agree with you on that.

Mr Baron

  292. Is there a compromise here, in the sense that what we do not want to do, as the Chairman said, is to take the fizz out of ILAs? We want to make them universally available and we want that popularity to be there, but at the same time a number of individuals have come before the Committee who have expressed concern about the quality assurance and quality control. Some providers have commented about the courses they are offering, and that has led us into all kinds of avenues for fraud. Is there a compromise involving the LSCs more with regard to regulating the providers rather than looking at the other end of the spectrum and the nature of the courses, in other words making sure the providers are kosher and producing the courses and making sure that there is an element of local input to ensure quality control, and leave it there? In that way, your bureaucracy does not suffocate the whole initiative and drive behind the ILAs.
  (Mr Hall) In the long term we do think that for adult provision this offers a very promising way forward, so I agree with what you say about the minimum control necessary to safeguard public money.
  (Mr Stark) Chairman, it partly depends on the universality of the offering and the degree of subsidy. Those two things are not connected. You can have a universal offer but you do not have to have a universal subsidy. If there is a very high element of subsidy, you need a larger measure of quality control and a certain degree of bureaucracy that will go with that. Our vision is that everybody should have a Learning Account but not that money should be pumped into it by the public purse. My brother has an ILA. He does not need it, frankly. To have the £150 that goes with that is not important to him. He would have taken out the account anyway if he had had a sense that it was a dynamic process, something which fitted in with his wider affairs, something that he could hand on to his children or which his employer could contribute to. It is a different thing to talk about the subsidy and to talk about the mechanism.

  293. Universality is the key thing with regard to availability, but you are saying that that is one thing, as we all agree, and on the other hand funding does not have to be universal. You can target funding. Do you think you would have a role to play in that, going forward? One of the things we are trying to get at here is that there is a lack of control, which is why we have hit the buffers. There are accusations about fraud and various other concerns, including lack of control generally. How do you put a structure on to this without killing the fizz?
  (Mr Stark) The Learning and Skills Council already does have a significant role in targeting funding. That is how our funding mechanisms are directed. They are prejudiced in favour of particular providers, particular learners. They are intended to support progression. They heavily favour those at the bottom end of the learning scale. Basic skills provision is entirely free. Opportunities like "Bite-Size" courses are provided free at the point of delivery. This is the business that we are in as an organisation. It would be foolish to take us completely outside it, but equally I take the point that in doing something different here, with a bit of a fizz to it, it does not have to be strangled by existing regulations. There is a process that we could go through over time that would end up with a better result for everybody. Just to go on, there is something here about the collectivity of people, rather than their individuality, that is worth addressing. If we look at some of those experiments run under the TECs: the Birmingham Learning Exchange is an example of the effect of pooling eight or twelve learning accounts of £150. There were the Shirley Street Traders, an example of people who ran their own course. Another group of people ran a childcare course. That would not have been possible with individual amounts of £150, but was possible collectively. That is a point we have missed in ILA Mark 1. By going down that separate route, from Capita to the individual, and then a provider somewhere along the way, you lose that ability to bring things together for a group.

  294. In trying to learn lessons for the future for ILA mark 2 what are the key lessons from your point of view?
  (Mr Hall) I think you have specified most of them. We think that you must have sufficient control to have public confidence when money has been put out. We think it has got to be sustainable from the outset, so if you have a very successful scheme, as somebody remarked this morning, you cannot have an uncapped budget because you will run into the same difficulties. You have to take that broader view. Some of the things Michael has talked about, particularly if they can be linked in with other initiatives that are about, for example the small company learning accounts, are very promising indeed. The trade union learning accounts work very well. Building on the successes—obviously, because a crisis has been reached, it is harder to make the measured evaluation that you would expect in these circumstances. I think we probably have to accept local variation too. I wonder whether it is possible to design a one-size, fits-all national scheme. We still have one or two. The TEC projects were particularly successful, including working with banks. It was very difficult for the Department to persuade the banks nationally to take on the scheme. Perhaps the risk was too great, but I think that is worth re-visiting. Another of our ideas that we have mentioned, which I think is particularly exciting, is the concept of learning miles. We have seen how successful air miles have been over time. People did not expect that to last. You can top up your account or trade it in, and that is another avenue that we could explore.

Valerie Davey

  295. We are quite encouraged by some of the things you have said, and I certainly think the tenor of the evidence we have had gives you a role as the gate-keeper, in terms of mentoring providers. You have mentioned some good local initiatives. Who will monitor those national providers? How will that fit in?
  (Mr Hall) One of the things we are required to establish, because it was seen as such an obvious gap, is a national contracting service. We have done that, and that is beginning to operate and is re-kindling interest in some of our leading companies that perhaps have not been engaged in work-based learning in recent years. That would be the obvious unit to look after national providers.

  296. We have now got the other national body, the Capita ILA Forum. How has that worked, in your experience? I know that you get direct funding. Have they been efficient?
  (Mr Hall) We do not deal directly with Capita. Once they took over as a service provider, they dealt with colleges. Because of the success of the scheme in autumn 2000, a situation arose where, if you had not pre-registered and you turned up at college to enrol, you could not access the scheme. That was a bit inflexible and ministers persuaded Capita to be more flexible about that. I have missed a really important part of the answer I should have given on how we see some of these schemes working, and that is the Sector Skills Councils. The work on sector skills pilots are using the ILA type of approach.
  (Mr Stark) Absolutely. In most of the work that we are doing, we are focusing not just on business as a general proposition, or employees as a category, but on people's relationship within a sector, because then you can get various supply chain pressures for improved performance, for raising training standards, and at this point you would usually come across a funding difficulty. A small sum of £100 or £150 might stand in the way of the lifelong learning which would update somebody in the care field, or in a gas occupation. If we could use ILAs on a sectoral basis within groups of companies, we could probably advance both our employability and our individual lifelong learning ambitions quite successfully.

  297. Mr Stark, are you saying you really have no link with Capita as the LSC?
  (Mr Stark) Individually, I have not ever needed to phone Capita about any case. The point I would make about Capita is a rather broader one. The nature of their role is a back room exercise, essentially forming a liaison between an individual and a training provider. This cuts out the aspect of ILAs which I think is so powerful, which is the opportunity to get contributions from different parties. The Capita contract does not allow of contributions from an employer, from a granny, from anybody else. So it does not build in the sense that we all, I think, had at the beginning of this, an Individual Learning Account, because it is not really an account, it is a mechanism.

  298. So it is a robotic body, and by other accounts not particularly efficient and certainly not looking at the quality control or the—
  (Mr Stark) That is not what their contract asks them to do. I am not blaming them for that at all because it was not their role.
  (Mr Hall) I think there may have been a link group of providers, and the FEFC might have acted in that role, and so there was some contact through a liaison group.

Paul Holmes

  299. Mr Stark you have talked about the "Bite-Size" programme, which was successful and cost-effective. We heard earlier from other witnesses that the ILA scheme was so loosely organised by contrast to that, for example, that it was just a licence to print money—£265 million and still rising. Would you agree with that assessment?
  (Mr Stark) I would prefer to comment on the bits I do know about. I do not know where the bad bits of the ILAs are, and by definition the LSC has not been involved in that.


 
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