Select Committee on Education and Skills Minutes of Evidence

Exmination of Witnesses (Questions 320-335)



  320. You had no contact with the Treasury.
  (Mr Hall) No, quangos tend not to have direct contact with the Treasury. The Treasury are sometimes at the meetings, and that is as close as we get to them.
  (Mr Stark) As far as the Learning and Skills Council was concerned, the scheme was implemented nationally in September 2000. The LSC was not created at that point. From the moment that the scheme was running and we were up and running, we were also monitoring evidence of at least inconsistent behaviour. I personally collected some leaflets from a booth in Victoria Street that I thought was offering very strange provision, and I took it round to colleagues . . .

  321. We are getting into murky territory again.

Mr Shaw

  322. We did talk about widening the scope earlier! Mr Hall, when you advised officials from the Department for Education and Skills about your concerns from the lessons that you had learned about abuse made in previous schemes, were you talking about poor quality, i.e., the scams that you referred to, or were you talking about fraud, or both?
  (Mr Hall) Our main concern at that time—and our experience with ILAs has confirmed the worry and the need to take some decisive action—is that there seemed to be a group of people having a profound understanding of funding, whether it be the ESF first of all, or then franchising, then ILAs—and I fear that next it will be e-learning, where people will spot the opportunity very quickly for very quick and substantial earnings. I think we have got to take that very seriously. Perhaps it is more in the domain of the PAC, but my recommendation to the Department is that we need a kind of Interpol crossing funding frontiers. I think each new body that takes responsibility for one of these areas of activity is surprised by the rapidity of it. We have got to bring together the best people from the different regulatory agencies, including the Qualifications and Curriculum Authority, and drive this out. Too many excellent providers, as you have heard this morning, whether private providers or colleges or others who are trying to do their best, are besmirched by what has happened first to the FE sector, and even before that—some of the ESF schemes caused great problems for a college in Wales, which you are aware of, and one of our colleges in Hampshire; and now ILAs. I think we have to create a greater capacity for driving that out.

323. You are concerned about both—fraud and scams.
  (Mr Hall) It is—

  324. Yes or—
  (Mr Hall) Well, if I say "yes", I am answering a wrong question. The police could not bring a prosecution in the Welsh case; they did not feel they could find evidence to prove fraud. It is not a term that I would want to bandy around. I think I have explained it carefully. There are people who exploit opportunities and make a lot of money very quickly, and it is exploiting loopholes in the eligibility framework, and it is generally being very quick on their feet. I do not think they are the people everybody wants to help us widen participation.


  325. We are talking about entrepreneurs, are we not, of a certain type?
  (Mr Hall) I have heard on the street that "Ferrari Nick" is supposed to be one of the leading people. If somebody can get an epithet like that, and be known at that level, that is when you have to take concerted action. I think the Department is considering something very similar.
  (Mr Ingleson) Does being critical of that private sector entrepreneurial activity brand us all as "wreckers", Chairman?

Mr Ennis

  326. What discussions are currently taking place between the LSC and the DfES in terms of the success of the ILA?
  (Mr Stark) Extensive. A colleague who was working directly with the Department is now on secondment to me and forms part of that joint liaison group that is planning future structures. At the moment they are only at the point of carrying out a consultation survey, which you have been informed about. The kind of idea that is set out in this memorandum, I hope, will be at least taken into account in any design principles of the scheme.

  327. Can we assume from that, that the LSC will have a role in the successor of the ILA?
  (Mr Stark) We are certainly expecting not just to have a role, but under the arrangements that were planned we would inherit the responsibility for the management of any contract, whether it is with Capita or anybody else, in the re-launched scheme.


  328. Does that concern you? There was a feeling that the institutional framework of learning sometimes gets in the way of doing things that are fast, light on their feet and get to the parts that other schemes do not reach. There is a sort of sadness, when I talk to the private providers, the people who came in, that that element is going to be lost. You heard about the concerns. Mr Hall, you are shortly to leave to go to the other side of the fence, as a college deputy principal. We wish you very well in that.
  (Mr Hall) Thank you very much.

  329. We are happy you remain unscathed. It is delightful to have you here because we are having an inquiry in parallel into FE—indeed, we may get you back. Poachers who have left game-keeping are very useful as witnesses. Do you not feel that mark 2 is going to be absorbed by the establishment, in a way? Is that a real worry, that some of the essential ingredients will be lost?
  (Mr Hall) There is bound to be a certain nervousness in the colleges' sector about whether the extra providers who are going to be welcomed in are going to be funded from the budget which they see as theirs. If this is to be funded from new money and if there is to be an opening-up of providers beyond the public sector, then that is fine. Those colleges would say, "look at the results of the inspections; look at the outcome of that; we have nothing to fear". If it is to be a more competitive marketplace, we will compete on quality, and that is fine, but let us understand the ground rules. One of the fundamental points we make to you in our documentation is that for these areas to work, they require very clear national policy on who pays, how much and for what. It is adult provision. What is the responsibility of the employer, the individual and the public purse? As Michael suggested earlier, on basic skills we would probably all sign up and say it is 100 per cent public. We, as a society, have failed if adults cannot read and write, so we will provide free provision. What happens when you get to level 3? Should there be any subsidy to a person in the workplace at level 3? Is that going to be totally a matter of paying for it yourself, or your employer paying for it, or using a subsidised learning account, in which case that is a competitive provision? I think there are some fundamental issues here. One of the difficulties of the ILA scheme was coping with fee policy. In many cases, the reason that disadvantaged people do not show up in your figures is because they were getting 100 per cent fee remission. Again, a coherent national policy on fees is a pre-condition of a successful approach, I would submit.

  330. Mr Hall, some people out there would say FEFC—the previous situation with TECs—the whole apparatus that was there before was not reaching those people who were difficult to get into learning. In a very short and meteoric career, the Individual Learning Account succeeded in a way in which the organisations that you were involved in, failed.
  (Mr Hall) I would need a better evidence base to reach that conclusion. I do not know how many—

  331. We believe the evidence that 16 per cent of the people that were introduced to ILAs had no previous history—
  (Mr Hall) Sixteen per cent of which figure, Chairman?

  332. Sixteen per cent of total account holders.
  (Mr Hall) Is that accounts opened or accounts actually used?

  333. Accounts actually used.
  (Mr Stark) Chairman, having looked at the evidence given to you by York Consulting colleagues, I think they are saying that that is no better than the proportion of the population at large. So the ILA programme was not successfully targeted, and if we look at research on "Bite-Size", it targeted more effectively. This is a question about pounds for results. £270 million has been spent on ILAs. If it has only reached the average targeting, and yet with £4 million, we can do more, there has to be a question.

  334. What are the three things you want to see in ILA mark 2?
  (Mr Hall) We want to see a quality threshold. We want to see it integrated as part of a whole raft of proper strategy, particularly the workforce development—we think all the research evidence shows it has been most successful—the union schemes, the small company schemes. The two research documents we showed you both said it was most successful in our fee discount and our pathfinder linked to employers because it was particularly well suited to that. Thirdly we have to have a debate and a national policy on who pays for what, and therefore what the funding policy is for public sector institutions.
  (Mr Stark) If I can add to those points, which are the fundamental points, something about the community; the community of interests between employer, individual as employee and also as a member of society, and the state. The state does not have to be just the Learning & Skills Council; there might be other bits of the public sector that are interested in developing learning through such a mechanism. There is a huge possibility there. The version ILAs that we have at the moment may be useful and replicable, but we need to go beyond it.

  335. Mr Ingleson?
  (Mr Ingleson) I have nothing to add to the comments of my colleagues, sir, and if they are still talking to me I look forward to working with them!

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