Select Committee on Education and Skills Minutes of Evidence

Memorandum from the Association of Computer Trainers (ILA 13)

  1.  The Association of Computer Trainers (ACT) has been invited to give evidence to the Education & Skills Select Committee enquiry into the Individual Learning Accounts (ILA) programme. ACT represents a broad cross section of IT learning providers and was founded by Pitman Training Group, Internet Exchange and Best Training. James O'Brien, Managing Director of Pitman Training Group, will represent ACT at the Select Committee.

  2.  ACT are also submitting this evidence on behalf of its clients—Individual Learning Account holders—who have, along with training industry employees, personally suffered from the collapse of the ILA scheme.


  3.  ACT encloses a chronological view of the introduction and subsequent abandonment of the ILA programme. This shows that the ILA scheme, whilst laudable in its aims, was fundamentally flawed in its structure and its lack of a credible regulatory framework. Predictably, the programme also unwittingly permitted a range of individuals and organisations—almost all with no prior connection to the legitimate training industry—to exploit obvious loopholes in the scheme's inadequate guidelines.

  4.  The shortcomings of the scheme, which were preventable and avoidable, have understandably attracted considerable media attention. This has severely damaged the reputation of the legitimate training industry, with many potential learners now believing that all training providers are fraudulent. This is having a severe impact on the industry and does not bode well for the future of private sector training providers that are part of the essential spectrum of choice for individual learners. (See Annex 1)

  5.  ACT agrees that action had to be taken by DfES to prevent the misuse of public funds and offered practical solutions to government that would have saved the ILA programme, whilst protecting public money. However, it does believe that the actions taken by the DfES in October/November 2001 have disadvantaged both learners and legitimate providers. Many learners are now unable to access learning due to cost barriers—the first time since 1992 that no funding is available from government towards the cost of vocational learning. Providers are threatened with downsizing and closure due to the vacuum created by the closure of the ILA programme.

  6.  The success of the scheme relied on the good efforts of learning providers: marketing ILAs; paperwork completion, submission and evidencing; on-line information transfer; delivery of training in all areas of the community; and finally the acceptance of payments from DfES made "in arrears". Reputable training organisations, some having been established for many years, worked to promote the scheme within the guidelines available and relied upon DfES to use their best efforts to remove rogue traders. They were sadly disappointed by the failure of DfES to take the appropriate action at an earlier stage.

  7.  The impact of ILAs on the training market has been both positive and negative. Positive, in that the scheme has encouraged individuals to recommence learning and has improved the awareness of access to local learning. Negative in that the DfES has, within 15 months, introduced and withdrawn a scheme in a highly respected sector that was operating professionally and successfully. The DfES has now departed the scene leaving the market in a state of great uncertainty.

  8.  Learning Providers and their clients (Individual Learning Account holders) at no time believed that the DfES would renege on their promise to accept legitimate training arranged prior to 7 December 2001 by closing the website early. As responsible and professional businesses, many providers have honoured the contracts entered into with clients to deliver subsidised training for those holding a valid Individual Learning Account, at great cost to the financial viability of their business.

  9.  ACT believes that a successor to ILA can be reintroduced swiftly by:

    —  Accreditation of learning providers and/or training materials through acceptance of the independent accreditations (including from government agencies) held by all legitimate providers.

    —  Involvement of local Learning & Skills Councils, who know the local market and who know the learning providers in the area.

    —  An adequate regulatory and compliance framework, to ensure correct controls are in place, without making the scheme unworkable.

    —  Provision of clear and unambiguous guidelines for learning providers, with version numbers for clarity and understanding.

  10.  A swift re-introduction will bring confidence back to the training market and will ensure that individuals have a choice of where and when to learn. Continued delay will erode that choice as the market contracts: ACT believes that unannounced delays in a successor to ILA will cause many learning providers, small and large in communities, towns and cities, to cease trading, thereby decreasing the opportunities available for learners to train locally.



  All ACT members were involved in "pilot" schemes of ILAs delivered through the Training & Enterprise Councils (TECs). The TECs worked with trusted and known training providers to ensure that there was a guarantee of quality.

  Ahead of the national rollout of ILAs, there was a lack of information provided on the guidance/rules of the scheme. ACT member, and other Learning Providers (LPs) attended roadshow events in the summer of 2000, but these were factual presentations rather than consultative and interactive forums.

  Due to the patience and persistence of ACT members, possibly not afforded to other LPs, we were able to get some information from the DfES policy unit to ensure that sufficient communication was passed to our members on the guidelines and planned operation of the scheme.

Summer 2000

  Trusted LPs—referred by the TECs—were invited by the ILA Centre to apply to register to deliver ILA training. A copy of the letter of invitation and initial "outline" guidelines, Learning Provider Registration Form and approval letter is attached. (See Annex 2) (Not printed)

  No full and formal guidelines (other than the "initial" guidelines issued in June 2000) were issued to LPs ahead of the national rollout.

  Capita appeared to be poorly briefed on the ILA scheme. Advice and guidance was patchy and ACT members were only confident of guidance given when the same guidance had been verbally given consistently three times, as written guidance was rare.

September 2000

  Vocational Training Relief (VTR) was withdrawn in September 2000. In order to remain competitive, LPs in both the private and public sector had to become involved in ILAs; to remain outside the scheme was not a viable alternative.

4 September 2000

  ILAs were rolled out to the public and applications for new LPs were taken by the ILA Centre in Darlington.

  For training in IT the ILA afforded 80 per cent funding with no upper limit. Pitman Training Group (PTG) asked for clarification that if the cost of a relevant training course was £20,000, the ILA would fund 80 per cent—£16,000—the answer, ludicrously, was yes.

6 September 2000

  PTG sent their internal guidelines to DfES to advise that they were following these guidelines (See Annex 3) (Not printed).

20 September 2000

  PTG wrote to the Secretary of State expressing concerns with recommendations to introduce a "cap". Subsequently the DfES introduced a cap. (See Annex 4)

20 October 2000

  The DfES introduced a cap of £200 (80 per cent of £250) as an interim measure whilst consultation on the level of the cap was reviewed.


  PWC were engaged by DfES to undertake an evaluation of the scheme and to review the level of the cap. ACT members were involved in these consultations however as far as we are aware there has never been a report on this activity, its outcomes and recommendations. ACT members also met with DfES officials and were to be invited to discuss the scheme further during early 2001. No invites were forthcoming.

  Throughout the fifteen month period of ILAs, application forms were lost, delayed, and all too often misread by OCR software (Optical Character Recognition) used to scan in applications; many had "their" funds withdrawn without authorisation; and at the end, their options for embarking on training were pulled without notice and contrary to the "official" information that had been issued.

February 2001

  Street traders started increasing in numbers in various locations around the country. Initially they were largely unnoticed but over the following few months they started to have a significant impact on the legitimate training industry and the ILA scheme.

  ACT members and other LPs notified the DfES of more than 200 individuals/companies they considered were promoting ILAs against the guidelines of the scheme. None of those reported were training companies that had been in existence prior to the introduction of ILA, ie they had been established in order to exploit the loopholes of the ILA scheme. It is not known if these reports were ever followed: we believe that the DfES Compliance Unit for ILAs consisted of 2 people and hence workloads were under pressure and it is unlikely that follow up could be made.

June 2001

  The DfES announced a re-registration of suppliers. All LPs were invited to resubmit their application by a specific date, and those that did not lost their ILA registration as LPs. It has been stated that approximately 800 LPs were de-listed; however, it is not known whether these were a result of the DfES taking action, or the providers' failure to complete the form.

  Abuse of the ILA scheme intensified with street traders in most towns and cities across the UK, blatantly flouting application procedures. ACT members urged DfES to introduce tighter LP controls to minimise damage. It is believed that the DfES could have contained the damage by introducing an accreditation process to ensure that only legitimate LPs were registered.

August 2001

  New LP registrations were frozen.

September 2001

  ILA applications could only be made via the web or by telephone call.

  The DfES prepared revised guidelines for LPs that were to be introduced on 1 November 2001. ACT members were invited to consult on these revised guidelines and were surprised and disappointed that important issues surrounding accreditation of LPs had been omitted (See Annex 5).

16 October 2001

  The BBC radio programme File on Four raised issues regarding ILA-related fraud.

18 October 2001

  The DfES met to discuss ILAs.

24 October 2001

  Estelle Morris announced that the ILA scheme was to be suspended from 7 December.

29 October 2001

  The DfES wrote (at an apparent cost >£750,000) to all ILA account holders advising them to book their learning on or before 7 December.

Week commencing 19 November 2001

  ACT members and other LPs had difficulty accessing the ILA web-site, in many cases being completely unable to register training bookings. The site appeared to have been jammed.

23 November 2001

  The DfES closed the ILA scheme without notice and two weeks ahead of the date advised to LPs and ILA account holders.

November 2001

  ACT was invited to put forward views on ILA scheme problems (see Annex 6) and meetings were held with DfES (Hugh Tollyfield) during November 2001.

24 November—7 December 2001

  LPs mitigate their losses by accepting students with valid ILA membership cards in order not to disillusion learners and to honour the written commitment from DfES to accept learners until 7 December. Costs of learning for ACT members in excess of £1M.

4 December 2001

  ACT had a meeting scheduled with John Healey, however this was cancelled at short notice. ACT were then invited to submit a proposal to John Healey and Hugh Tollyfield on an alternative short term scheme ahead of the successor to ILA, to meet the demand of individuals left without access to learning. (See Appendix 7). No response or acknowledgement to this proposal has been received.

18 December 2001

  ACT solicitors wrote to Estelle Morris requesting a response to concerns. No response or acknowledgement to this letter has been received.

  DfES wrote to LPs advising that some payments would be made w/c 18 December. To date full payments are outstanding and many smaller providers face closure due to cashflow funds being withheld by DfES.

  DfES advised LPs on 18 December that they would introduce validation checks for LPs that have not received payment. To date no instruction on validation checks has been received by LPs.

December 2001

  ACT members made first redundancies.

15 January 2002

  ACT sought advice from leading counsel and is considering applying for a judicial review.

January 2002

  County Court proceedings being issued by LPs to reclaim outstanding fees, interest and costs from DfES for non-payment.

January 2002

  ACT members have seen training centres closing and new investment withheld.

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