Select Committee on Education and Skills Third Special Report


Sub-Appendix B

LESSONS LEARNED REVIEW OF THE DEVELOPMENT, INTRODUCTION AND OPERATION OF INDIVIDUAL LEARNING ACCOUNTS

SPECIAL INTERNAL AUDIT REVIEW

Introduction

1.   This Special Review was requested by the Secretary of State and the Permanent Secretary to identify key lessons to learn from the development, introduction and operation of the Individual Learning Accounts (ILA) programme. The approach taken was to review available correspondence and documentation, and to interview key people involved with the ILA programme to determine their views on both the achievements and the problems experienced in the programme.

Summary of Findings

Policy Development

2.   It is clear from the submissions reviewed that decisions on the overall shape and direction of the programme were made following consultation with, and the agreement of, Ministers. This included making it a universal programme providing discounts on a wide range of courses to help encourage adults to take responsibility for, and contribute to the costs of, their own learning. However, it has not been possible to identify when and how some decisions on the operation of the programme were arrived at (see also paragraph 4 b.). Examples of decisions that later led to problems included:

a.   The establishment of a buyer beware system where there would be no central checking of provider viability, quality or track record.

b.   To encourage the widest possible range of providers (including small, new and innovative) rather than relying solely on the existing provision from colleges and work based learning providers.

c.   To allow learning providers to retain their own stocks of ILA application forms. This enabled them to pro-actively market the programme directly to prospective learners, and sign them up for their courses.

d.   To allow learning providers to determine the eligibility of most of their own learning courses for ILA incentive payments.

e.   The introduction of an 80 per cent subsidy, initially without a cap, in 1999.

Problems Arising in the Programme

3.   Examples of problems that arose include:

a.   A significant minority of learning providers set out to take advantage of the programme by increasing course prices, aggressive marketing techniques and mis-selling.

b.   The prime focus of these suspect providers was on maximising their income through targeting the most "profitable" aspects of the programme (initially the £150 contribution for the first million learners, then the 80 per cent subsidy).

c.   Suspect providers also targeted distance learning. The number of complaints received indicates that some distance-learning providers offered poor quality learning opportunities with little or no support.

d.  These activities, allied to the overall popularity of ILAs, led to quicker take-up of learning opportunities than expected, which in turn led to an over-spending of the available budget.

Operational Weaknesses

4.   The target to achieve one million ILAs by March 2002, meant that the ILA Team were under severe time pressure to establish a service provider contract with Capita, to ensure that the programme could start in September 2000. The time pressures contributed to the problems experienced by the programme, particularly with regard to the contracting process, and were further exacerbated by the fact that some other key areas of ILA development and operation did not demonstrate consistently good practice. These included:

a.   No business model was developed to help identify strengths and weaknesses in the policy options available as the programme was developed.

b.   No decision log was set up to record and track decisions made. This, allied to inadequate knowledge management and document filing systems within the ILA Team, has meant that it has not been possible to identify when and how all decisions were arrived at.

c.   Although a great deal of management information appears to have been   collected by Capita, it was not provided to the Department in a sufficiently helpful format to indicate possible abuse of the system by providers or to provide the information for Ministers to decide on action needed.

d.   Although a risk register was in place and being reviewed by the project board, there is insufficient evidence of active, ongoing management of each risk by a nominated team/individual outside the Board meetings.

e.   Resourcing of some key specialist roles was not always adequate during the development and operation of the programme. This is particularly true of both the contract management and financial management arrangements.

f.   Departmental guidance to learning providers did not clearly specify the requirements and expectations of the programme.

Conclusions & Recommendations

5.   The lessons identified by this review are summarised in the attached Appendix. Some of the key lessons arising relate to the need to enhance project, risk, contract and financial management arrangements.

6.   To carry forward the findings from this review, we make the following recommendations:

a. To help embed the lessons learned from this review (see Appendix) into Departmental procedures, they should be made available to all programme and project boards and managers in DfES through appropriate media (good practice guidance, web-site, etc.).

b. More immediately, the lessons learned from this review (see Appendix) and all other relevant ILA reviews currently underway, should be built into the management arrangements for both the development of the ILA replacement programme and the wind down of the original ILA programme, where appropriate.

c. To ensure that all the key lessons arising from the various ILA reviews currently underway are captured, a consolidated report incorporating all of the lessons learned should be prepared.


 
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Prepared 26 June 2002