Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 84-99)




  84. Today I welcome Mr Bryan Sanderson and Mr John Harwood to our deliberations. This is something of an historic occasion because the Learning and Skills Council, being a relatively new body, has not been before this Committee before. Just as OFSTED is responsible to Parliament through this Committee, the Learning and Skills Council is responsible to Parliament through this Select Committee on Education and Skills. We take that responsibility very seriously. You are the largest quango in the United Kingdom, I understand, with a £6 billion budget—

  (Mr Sanderson) A non-departmental public body, Chairman!

  85. I still call it a quango! So you are absolutely pivotal in any Government's policy to deliver the skills that this country needs. I will ask you, Mr Sanderson and Mr Harwood, if you would like to say a couple of words introducing yourselves or saying anything you would like to open up the session?
  (Mr Sanderson) Thank you. We are very pleased to be here. I think whatever else comes out of this, you should be under no illusion there is a terrific commitment to deliver this task with the members of the Council and with the executive, we really have a bunch of very committed people. As a prelude, I would like to say two things. One, this is about long-term culture change and it is not to be taken lightly nor is it likely to be delivered quickly. We have a terrific agenda, very broad, and very far-reaching, and it is not going to be delivered quickly. Secondly, before the executive started, they did have to do it from a standing start. I have likened it to a very big goods train with a steam engine up-front, and it was a standing start because we could not bring people into the executive until day one because they were already doing very similar work with the FEFC or the TECs or whatever, so it was all brought over on the day. That has made the start-up much more difficult than it might otherwise have been, particularly as they brought with them 14 different systems which had to be integrated.
  (Mr Harwood) I have nothing to add thank you, Chairman.

  86. We will see what we can squeeze out of you later. There has been some press speculation since the LSC was set up that it has not had quite the hard profile that people expected from the LSC, more of a fuzzy profile rather than a hard profile, and people are wondering whether Sanderson and Harwood are really a household name yet. I wonder if you could tell the Committee, is that because you have really been getting the structure right or getting these 14 different organisations to work as one? When is it that the LSC is going to start having a rather sharper profile amongst the public who need to know that there is this organisation which is the largest quango, as I still keep calling it?
  (Mr Sanderson) My answer to that would be that we looked very hard at how we wanted to present ourselves. To put it in business-speak, should the Learning and Skills Council be a Shell or a Unilever. To explain that, if you buy a Shell product—perhaps I should have said BP—you usually know from which company you are buying it, the logo is there up front, and that is the interface with the end consumer. In the case of Unilever they make Flora margarine or a soap powder or whatever and what you are aware of is the brand on the package you are purchasing. I am polarising the debate but that is the essence of it. I think we are convinced the Learning and Skills Council needs to raise its profile, because of some of the staffing issues we have mentioned, but I think really it has to be a Unilever because the brand recognition with the consumers, with the students, and with the providers is already there through the FE colleges and through the schools. I do not think it is for us to try and really usurp that, we have to be the force behind it.
  (Mr Harwood) I would rather like to support that and say I think the real issues are the profile of life-long learning and the profile of learning opportunities in colleges and other institutions rather than necessarily the personal profile of the Learning and Skills Council. It is very important we are accessible and available but I think that is rather different from saying our success is to be a well-known organisation. There is a huge challenge we all face and that challenge is going to be faced up to and overcome by the very hard work for a long period by a very large number of people, most of whom will not be working inside the Learning and Skills Council.

  87. Have you got the right quality of people on board in terms of your staff? They come from all sorts of different organisations, as you have said. I know that Mr Sanderson has been in really a rather more aggressive business in terms of his background, does there not come a time when you have to take pretty dramatic action and get rid of some of the chaff and bring in some of the wheat and start putting an imprint on the organisation? Have you really just carried over a lot of mediocre people from organisations which really are not going to make this new organisation work well?
  (Mr Sanderson) I will let John answer on the basics but I would say my impression is, and it is largely impressionistic of course coming from the outside, is that a good number of the people are (a) able and (b) very highly motivated, not least, and this is important, in the local Learning and Skills Councils because a lot of the delivery will come locally, and I hope we will come to that later. I am not at all alarmed by the quality. With two or three specific exceptions, it is difficult in the public sector sometimes to get the very highest quality people into the marketing and some of the more out-going parts of the organisation, because the private sector does pay rather better for those sort of areas, and we have had some recruitment problems, and John has had some more basic problems in the more affluent parts of England. They are not bad though.

  88. You have had problems just in the more affluent parts of the south of England?
  (Mr Harwood) We have certainly had some recruitment difficulties in the southern part of the country, yes. When you look at the basic transfer which took place, the transition from the Training and Enterprise Councils and the FEFC in April of this year, what happened was that we had a situation emerging where there were more jobs than people in the southern half of the country, very broadly—obviously some exceptions in some cases—but in the northern part of the country there were more people than there were jobs. So there is an imbalance of posts and people across the country. Therefore we have had some recruitment difficulties in the southern part of the country. That, however, is different, it seems to me, from the question you are asking, which is about the quality of people. I am very satisfied with the quality of the people who are working in the Learning and Skills Council. There is I think an issue about the skills they bring and the need for us to make sure we equip them with the skills they need to do the job. For example, if you look at our two main sources of supply (and the reason we have that is simply because of the TUPE system under which the posts transferred) the vast bulk of people at the local level we will have inherited from the Training and Enterprise Councils, and the majority of people in the national office we have inherited from the Further Education Funding Council. Within that, of course, we need to make sure that staff from both organisations at national and local level are able to understand and cope with the whole range of our new remit which, as the Committee will know, covers further education, sixth forms, adult and community learning and work-based learning. That means that in some parts of the country we do need to make sure we move people around, we acquire new people with the appropriate skills, and we enable the relevant people inside the organisation to have the full range of skills they need to be able to discharge their duties. So that is a process we have under way at the moment and we will be running for the next couple of years.

  89. Thank you for that. You will be seeing us regularly. In a year's time you will be back and we will do a performance review on you, what do you hope to achieve in a year?
  (Mr Harwood) The first thing we need to recognise, or the Committee needs to recognise, is we are in the process of transition. We have acquired the funding responsibilities from 1 April this year for work-based learning, for the further education funding system and for adult and community learning. At 1 April next year we will acquire the funding responsibilities for sixth form funding, and at the moment a lot of time and effort is being expended to make sure that is a smooth and effective transfer, because unlike the transfer of adult and community learning which took place in April, where there was some turbulence across the country but that was relatively small amounts of money, it is absolutely vital that the £1.3 billion-worth of sixth form funding and the 400,000 students there are in school sixth forms up and down the country, actually do not have any turbulence or ripples in that transfer. So in a year's time the most important thing we need to be able to report to you is that that process has happened without disruption, without turbulence in the process. Thereafter, there are a range of activities where we need to report to you our progress. You will know from our remit letter the wide range of responsibilities we have and you will know from our Corporate Plan the targets that we have in place, so next year we need to add and flesh out some of those targets we have reserved for next year, and we also need to be able to report to you (and will do) on the progress we are making in the milestones towards achieving those key targets we set out in our Corporate Plan.
  (Mr Sanderson) I hope by then we can report on a culture change programme, because at the moment we have started, as John said, with an FEFC culture, and they were a very effective national, narrow remit organisation—in the head office basically, I am exaggerating to make the point—and with a TEC culture which was very independent dominating the local Learning and Skills Councils. We need to put all this together, extract what we want and blend it and come up with a Learning and Skills Council culture which is not there at present, so we need to come back to that.

  90. I will turn the questioning over to my colleagues but just ask one more thing. One of the criticisms made of the LSC already is the scale and size of the bureaucracy. The former Secretary of State said he was going to save £50 million by moving to the LSC organisation, and people are arguing that not only have we not saved £50 million, it has cost in the region of £45 million more, so there is £100 million adrift somewhere. Is that something you would like to address?
  (Mr Sanderson) I think we can give you a specific answer to that.
  (Mr Harwood) I am not going to defend bureaucracy this afternoon but turning to the issue of whether there has been a growth of bureaucracy or not, I would like to start with some figures. You, Chairman, specifically asked about cash. In 1999-2000 the estimated cost of the functions we have inherited was around £275 million-plus, that is the TECs, the Further Education Funding Council, DfES and Government Offices. If you then up-rate that to get a real terms figure for the year 2001-02, it is £289 million, that is our calculation. That is actually slightly lower than the calculation which was given in an answer to a Parliamentary Question by Malcolm Wicks last year[1] but we will stick to the £289, £290 million. That is £100 million more than the £188 million which is our current base line administration budget for this year, so to say the present system is costing £50 million a year more than the previous system is a calculation which I find it impossible to understand. If you look at staffing, it is difficult to be precise about this because with the previous bodies one has to make certain calculations about the proportion of staff time spent on different activities, but the FEFC employed just over 500 staff and we reckon about 350 of those were on activities we have inherited. The TECs employed 10,600 staff or more, some of whom were involved in Business Links and CCTEs, but if you then compare that 11,000-plus staffing level with the fewer than 5,000 staff the Learning and Skills Council employs, you will see there has been a very significant reduction of staff employed in this particular area. I can go on, if you like, Chairman.

  Chairman: Let us hold that for a minute because we can come back to it. I know Paul Holmes would like to ask something about democratic accountability.

Paul Holmes

  91. I have heard from the two colleges which serve my constituency, Chesterfield in Derbyshire, and we have heard in the evidence in this room not many days ago, a lot of disquiet from colleges that on the Learning and Skills Councils in various areas they are very under-represented. Could you comment on that and could you clarify for me who appointed the people to the 47 local LSCs?
  (Mr Harwood) Answering the last question first, the answer is the Secretary of State for Education and Employment at that stage. The legal position is that in future the members of the local Learning and Skills Councils will be appointed by the national Learning and Skills Council itself, with the exception of the chair who is appointed by the Secretary of State following the observations, comments and advice of the Learning and Skills Council. The chairman may wish to add some greater flavour to the stark legal reality I have been able to give you.
  (Mr Sanderson) I was very involved with this from May, and these were publicly advertised so if people do not apply we cannot appoint them. Just looking at where we got to, there was a little deficiency, I would say, in the area you were describing, particularly school representation which is a bit low, but the fact is, perhaps particularly because it was a bit remote at the time, the number of applications was rather low. What we did do, and it was mainly Tessa Blackstone and myself—this was before John's appointment—was to put in two, three and four year contracts with a view to being able to respond to change, because it would never be perfect, so there was an initial period of two years and then after that a constantly revolving turnstile to try and adjust the position as time went on.

  92. So do you envisage going out of your way to address that imbalance?
  (Mr Sanderson) Yes. We have tried very hard to be socially inclusive, but you know how difficult that is, and you never please everybody. If you look at the 47 local Learning and Skills Councils you can see there has been a determined effort to try and make them as representative as possible of the communities in which they serve.


  93. Are there any other deficiencies or gaps? You are happy with the quality and number of employers?
  (Mr Sanderson) Yes, but then I would be, would I not, because I have a lot to do with it.

  94. You are happy with the number of employers you have?
  (Mr Sanderson) I am happy with the number. There is a statutory requirement for 40 per cent with business experience, is what it says. I think a disproportionate percentage of them are people who are representatives of businesses rather than live line-managing businessmen. The reason for that, I have to say, is easy to understand, because in all honesty going to somebody and asking them to take on a national council membership or even to be active in a local one is equivalent to saying, "Would you please do at least two non-executive directorships in terms of time"? It is rather hard to get release for that from a big business, let alone an SME.

  95. Should these people not be paid? If they were on a local health authority, they would get paid, why do they not get paid on this?
  (Mr Sanderson) I would think some remuneration would be appropriate, yes. I have that on the agenda.

Ms Munn

  96. I want to move on to the issue of bureaucracy which faces small community organisations, and I am feeding back information from my own constituency and the city I represent which is Sheffield. There is a real concern that the bureaucracy that is in place is very difficult for the smaller type community organisation to negotiate. There is a real worry that funding is not getting through to them, and that particularly the organisations who have been providing training at a local level are going to fold.
  (Mr Harwood) We share the concern that there are quite high burdens on particularly small organisations, of which voluntary organisations are a key component I think. The challenge is to be able to reconcile the need for accountability, because there are large sums of public money flowing through the system, and understanding what is being achieved with that public money with the burdens placed on organisations in trying to undertake their work. That is why we have made some small progress in being able to help on those things and we hope to be able to take that forward in further years. In terms of the actual current position, there are of course two different situations for those who are currently receiving grant or funding streams at the moment and those who are applying and wish to become a provider for the Learning and Skills Councils, and in the first year we have tried to minimise the numbers who are joining the system simply to ensure a smooth transfer from the system and the structures we have at the moment. We have recently devised an appropriate process for new providers to be able to be tested and assessed and to become approved providers for the Council. In doing that I know in many parts of the country my colleagues are concerned to make sure that is as smooth a process as they can, particularly for those organisations which are quite small and do not have large administrative overheads.

  97. I would like to follow up a bit more on that because when we look at the targets the Learning and Skills Council has for raising achievements of adults, it is very clear it has to, "Plan and fund new and approved provision for adult, community and family learning by maximising the effective use of Neighbourhood Learning Centres." I remain very concerned for not just people in the transition but in the long-term because if the bureaucracy is not minimised these groups will not be able to provide. We have spent a lot of time in this Committee talking about access, and we will come on to that later, and ensuring people who have missed out on education or those living in disadvantaged areas can actually get on the ladder of learning again for the first time. These areas are extremely important. It just is not happening in Sheffield.
  (Mr Harwood) We share that concern. I want to emphasise that we have inherited a range of systems from the past and many of them bring with them ways of working which we need to change in the future, and one of our key objectives as you will know over the next two or three years is to bring together funding streams into a common funding formula which brings a level playing field. One of the other complaints made is not just about the bureaucracy but about what happens after you have penetrated the bureaucracy in terms of the value of the support you actually get for different types of organisations. One of our big challenges is to make sure we can create a fair and level playing field between different types of funding streams and organisations. Within that, we need to make sure that we minimise the levels of bureaucracy and we enable people to devote and concentrate their main activities on their learning, because that is what they are there for, but at the same time there are important obligations to account for huge amounts of public money and to understand what is being achieved with that public money. We have to try and find a way of balancing those two.
  (Mr Sanderson) The problem really is sometimes these voluntary organisations are on such a tight cash flow they cannot wait for adjustments and I think we are very sensitive that is happening sometimes.

  98. Looking at the common funding streams—and obviously you have your nice little diagrams here about how that happens—I would be seeking some reassurance that although common funding in itself makes sense if the common process is applied to it, the amount of resources you have for that in a larger institution as opposed to a small institution are different, and while what you are aiming for may well be desirable the means of getting there might not necessarily need to be the same for all institutions.
  (Mr Sanderson) You are right but there is always this dilemma. You have to make the law for the bulk, and hard cases do quite genuinely make bad rules sometimes. We are addressing that but we do need a process where there is a hardship committee, whatever you call it, where people can appeal and say, "This is not for us."

  Ms Munn: That is helpful. Thank you.

Mr Turner

  99. Perhaps my constituency is a hard case. How do you intend to deal with the funding of sixth forms, especially in the light of the fact if you reduce funding too much it will make waves right throughout the education arrangements of a local authority?
  (Mr Harwood) At the moment we are not proposing to reduce existing levels.

1   HC Deb 29 November 2000, Vol 357 col 653W. Back

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