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 clientsIndividual Learning Account holderswho
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 organisationsalmost
all with no prior connection to the legitimate training industryto
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
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 barriersthe 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
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
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
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.
Trusted LPsreferred by the TECswere
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
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£16,000the
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)
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.
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
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.
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.
New LP registrations were frozen.
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
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 November7 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
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
ACT members made first redundancies.
15 January 2002
ACT sought advice from leading counsel and is
considering applying for a judicial review.
County Court proceedings being issued by LPs
to reclaim outstanding fees, interest and costs from DfES for
ACT members have seen training centres closing
and new investment withheld.