Examination of Witnesses (Questions 120
WEDNESDAY 30 JANUARY 2002
120. Does that indicate that the ILAs were failing
to hit the target group?
(Mr Rodger) There was a universal element to these
accounts. We were evaluating that in relation to a policy perspective,
which had a universal dimension as well, so we were not surprised
to see the results that we saw. The amount of targeting that went
on in terms of marketing was not significant. It is also quite
clear that a supplier lead approach was being used to market the
initiative and they will market at the point of least resistance
in many cases. It was not surprising to see the results that we
saw. That is one of the conclusions and recommendations that we
drew, that if they wanted to get further into the new learner
target group they would have to adopt a different approach to
marketing and promoting the initiative.
Paul Holmes: Last week we heard from two Department
for Education and Skills officials who drew up the scheme. One
reason why it was so loosely based in terms of providers and so
on was that they wanted to go beyond the normal providers; they
wanted to go to people they did not normally reach. That is one
reason why there were so few checks against fraud and abuse. You
are saying, from your findings, that they have not reached the
target audience because it was so loosely marketed.
121. I am not sure that John Rodger did say
(Mr Rodger) There was a universal approach, plus some
target groups. In terms of market groups we identified the 18
to 30 year olds, and non-teaching professionals. They clearly
did not make many inroads and clearly did not make massive inroads
into the non-learners group. It is quite clear from the way in
which the programme was promoted and structured that they were
not going to do that. It is not surprising that they had such
a low new learner figure on that basis.
122. From the studies that you carried out,
could you draw any conclusions as to whether there were other
more effective ways? For example, if you gave tax relief on vocational
education, would that be a better method than ILAs or are there
better ways than this failed experiment?
(Mr Rodger) It is quite clear that in many respects
the ILAs captured the imagination. The take-up has been substantive
and the feedback has been positive; people like them. The little
chunks of learning have been very good. Clearly, what has not
been very effective is reaching the non-learner group. If you
want to take this forward, rather than trying to design very heavy
quality assurance measures, which may go against bringing in lots
of new providersthat is one of the issuesperhaps
you would want to piggy-back this on the back of existing target
initiatives. You may want to try linking the ILAs into education
maintenance allowance; you may want to link it into, as we have
done, an initiative from the TUCthe Union Learning Fundand
link it into targeted initiatives rather than leaving it as a
stand-alone activity for the targeted elements. If you still want
a universal dimension to it, that is another issue.
123. Did your research suggest how learners
chose which provider to use?
(Miss Owens) We did not ask the specific question
of how they decided. We asked them whether they had required guidance
and who provided the guidance. We did not tease out those issues.
124. Should that question have been asked?
(Miss Owens) With hindsight, that could be something
for any future evaluation.
125. That may have led us into the worry that
transpired at the end.
(Miss Owens) What became clear from the findings that
came out of the research and out of the discussions with the providers,
was that they were tending to tell people who turned up at their
door who were interested in learning, "By the way, you may
want to apply for this account".
126. Last week I asked James O'Brien from the
Association of Computer Trainers whether the situation was recoverable
and he said that it was providing that we got on with it quickly.
Is that your view?
(Mr Rodger) I do not think that we can comment on
that. We do not know the extent of the issue. We do not know the
extent of the fraud or the extent of the dissatisfaction in terms
of account holders from, say, November or October. In terms of
the basis of the information that we have collected, we did not
identify any issues from the account holders' perception that
they were dissatisfied. Whether that was something that happened
from late summer onwards we do not know. Our second survey was
picking up people who had opened their accounts between May and
July. Whether that was something that happened in late summer,
in which case we would not have picked it up, we do not know.
We have no knowledge of the extent of the problem which has now
Mr Baron: What kind of balance needs to be struck
in providing the successor to ILAs, when it comes to trying to
reach those who most require an initiative like the ILAs? It is
a terrible expression but there is the deadweight factor in any
universal approach. I believe that John Healey has suggested that
in this case the deadweight factor is something like 40 per cent.
What change will be required to ensure that we reach those who
need this initiative against the balance that has to be brought
into the equation as regards the deadweight factor itself?
127. Before John answers I should say that reading
the papers I felt that we should exclude the word "deadweight".
It is a pity that when we are trying to change the culture of
learning in our society that the people who have received training
are seen as deadweight. But we have the terminology, John, so
you can use it.
(Mr Rodger) To talk of deadweight you have to be clear
about who is the target group. In terms of this initiative and
because of the large universal element there is a focus issue.
To answer your question, you have to be clear on what target groups
you want to bring in. Is it people with skills issues? Is it returners
to learning? You have to target them specifically. You would want
to ensure that there was an incentive to suppliers to pick up
these groups. Suppliers are very close in many cases to this target
market. What has been clear from a number of TEC initiatives in
the past is that suppliers have to be sufficiently incentivised
to pick up the target groups. There has to be some incentive such
that they will be rewarded only when they pick up certain target
128. Perhaps I can press you on that. What incentives
do you think should be explored and how would the providers target
those particular groups?
(Mr Rodger) It may be that you would fund accounts
only for particular social categories or those with certain qualification
levels. You may decide that you want to focus on unemployed people,
people who have been on particular Government initiatives, those
coming off New Deal, or various others initiatives and you could
target those people and encourage the suppliers to pick them up
using quotas. However, you have to get the balance between targeting
and universality. There appears to be a tension, at the moment,
between the Government policy and targeting, equity and universality.
There are those who suggest that means-testing is one way of doing
that. Do you think that is a good idea?
(Mr Rodger) Personally, I do not think that means-testing
is the way to go down this particular route. I think you could
reach these groups, as I mentioned earlier, through existing initiatives
where one is clear on the characteristics of the group and looking
at it as part of a progression that would mean that you could
avoid going down the means-testing route.
129. In view of the Chairman's comment I want
to say that when I first used the term "deadweight"
I said that I did not like it. But we have it so I shall use it.
In order to get value for money for the taxpayers, and in order
to reach those you want to reach, when it comes to incentives,
what recommendations do you think that the Government could initiate
in order to ensure that we are dealing with those groups that
need this help?
(Mr Rodger) Despite the operation of universality,
you can remove aspects of universality and give priority availability
for certain definable groups, such as people coming off particular
initiatives, in particular catchment areas, in aspects of deprivation
or whatever. You link it to the initiatives and those would be
the main people who would qualify. That is the way in which you
would get maximum provision for new learners.
130. Would that work practically?
(Mr Rodger) I think so.
(Miss Owens) It would be interesting to see the outcomes
from the two pilots that the department put in place last year.
One was "small firms ILAs" through which they were involving
owner-managers of firms with up to 50 people. If the owner managers
encouraged 50 per cent of their staff to open ILAs there was a
free learning needs analysis. Another one was a community ILA
that was being piloted in Liverpool, Sheffield and, I think, London,
whereby there was funding to pay for people from the community
to have guidance and expertise so that they could market and give
guidance to people in their community. It will be interesting
to see what happens.
131. When will we get those results?
(Miss Owens) We were not involved in the initiation
or the evaluation of those. It was some information that was passed
to us to insert into the introduction to the report.
132. I am interested in the deadweight issue.
Is it not the case that the nearer you get to universality the
smaller the proportion of your expenditure is deadweight? Is that
(Mr Rodger) No, it is the other way around.
133. Perhaps I can advance that. You are more
likely to grab the deadweights first because they are more likely
to be active, to be interested, and to have a reason to reduce
their own expenditure.
(Mr Rodger) Yes.
134. Are you sure you were right in your earlier
(Mr Rodger) Yes.
(Miss Owens) The evidence from the two surveys when
we asked the question, "Could you have paid for your course
without the ILA?", was that the proportion who said that
they could have paid for it increased. Whether they would have
paid for the courses without the ILAs is another issue.
Chairman: It is not a question of whether they
would have paid for it, but whether they would have done the course.
The question is never asked whether people would have done the
course. Surely, the scheme was to tease people into participation.
To a degree it is irrelevant whether they would have paid.
135. That is a point I had not thought of. I
am worried about the deadweight argument. Clearly, the cost of
targeting can be very great. If you target small firms perhaps
that is less expensive. Judging by the effectiveness of the DfES's
marketing, if you targeted people on very low incomes you would
have high marketing costs and the learning provider would be less
likely to be effective at marketing unless you gave him greatly
enhanced incentives. Then you would have to check eligibility,
which would cost more. On balance, do you think that universality
is as unwise a course as some people may be suggesting?
(Mr Rodger) Despite how much emphasis you want to
place on targeting, I do not think that it is primarily a cost
issue. If you try to target these particular groups on a universal
basis through global marketing it would be very expensive and
difficult. If you piggy-back it on to existing initiatives, when
you are clear who the groups are, it is part of the progression,
and then the costs are not significant to take it through. However,
when you have this universal element you will always have to live
with a significant proportionthat will always be around
the 40 or 50 per centwho might have done it anyway. It
is an approximate measure; you cannot prove it. It is an approximation
of what you expect to happen.
136. On the point of delay in publication of
the report, you answered as far as the DfES is concerned that
that is not unusual. What about your other clients?
(Mr Rodger) Again, it is not unusual. It takes time
for the final document that we give to the department to be cleared
with Ministers. It then has to be published and circulated. There
is a whole programme of reports being published through departments.
137. I was thinking of non-government clients.
(Mr Rodger) In many cases non-government clients do
not publish reports.
138. On the question of fraud and abuse, I want
to refer to your second survey where Capita gave you 1500 account
holders who have used their accounts, but when you phoned them
up 27 per cent of them said that they had not used them. Did you
go into that? Were they people who had used their accounts, but
did not realise because the training provider had organised everything,
or were there some people who had never used their accounts and
that was pure fraud on someone's part?
(Miss Owens) We rang 300 of the sample so we did not
go through the whole 1500. Of the 82 who said that they had not
used their account, 41 per cent were waiting for their courses
to start. Some were still considering what they wanted to do and
a small number said that they were not sure what courses were
available. In the interviews these 82 people were clear that they
had not yet used their ILA; they had not pulled down any funding.
139. If that were true across the whole range,
that could indicate a quarter of ILA money, about £65 million,
or a quarter of the whole thing.
(Miss Owens) Yes. But we did not pick it up in the
first survey, that was in the second survey; it was some of the
people who had were registered as having used their accounts on
or after 1 May.