Exmination of Witnesses (Questions 220-239)|
WEDNESDAY 6 FEBRUARY 2002
220. I will, do not worry.
(Mr Gibson) I think you know there are fish in there!
221. I think we have got some good common sense
(Mr Ingleson) I think the worst feature of this, as
far as I am concerned in the position which I now hold, has been
the dent in the enthusiasm and the addition of the few grams of
cynicism to most of my staff involved in this area of work. They
operate under a set of rules and regulations which are almost
at strangulation proportions. They have worked with a funding
scheme which hammers students who do not complete their course
of study and they have seen the Government throw money at private
providers, in the widest senseand that is not meant to
be pejorative to colleagues in the private sector with whom we
work closely but to people who are in the business for making
profit. That is the hardest part of this, and that is the hardest
bit that is going to be present, I think, in any settlement scheme
that runs in this way: Why should we do this? The risk factor
is too high for usnot at the individual student level but
in terms of impact on our overall finances.
(Mr Gibson) From the survey, Chairman, four or five
points which I think are directly a response. Complaints: Dealing
with a considerable number of complaints from disenchanted students
who were unaware of closure or who have lost an entitlement to
public support as a result. Increased administrative burden. Adverse
publicity for providers as well as from the ILA programme and
the Governmenta lot of students associate it with the college,
in other words, adverse publicity for providers. Loss of campaign
to promote life-long learning. I think from the colleges' point
of view there were certainly concerns which were much more deeply
222. That is exactly the sort of answer I was
looking for, in the sense that the implication from the colleges'
point of view is that it has been a complete disaster obviously.
Would there be some way of trying to claw back some credibility
from the Government by getting adequate compensation. What do
you think of the Government's approach that there is a difference
between an agreement and a contract when it comes to compensation?
(Mr Ingleson) My experiences with the franchising
arrangements are that when push comes to shove there is a very
clear difference between a contract and an agreement. In the ILA
case I do not believe that there was a contract.
223. Can I take you back to the original point
Mr Ingleson made at the beginning. Bearing in mind both of you
are very experienced individuals in this area, it is your conclusion,
is it, that basically the Government overreached itself, in the
sense that these ILAs became too popular, the budget ran away
with itself and the Government is using the fig leaf of fraud
in order to hide its embarrassment?
(Mr Ingleson) I am not quite sure you could ascribe
those words to me, Chairman.
224. No, I ascribe them. Would you or would
you not agree with them?
(Mr Ingleson) I think in the context of the figures
that I have seen, there clearly was an issue about the volume
of spending. I fail to see why anybody should be surprised about
that. The scheme was set out in such a way that it was a licence
to print money really. The issues about single point of contact
. . . I was intrigued by some of the language to which the Committee
has been exposed about this topic, which, as far as I am aware,
does not constitute in any sense illegality.
225. Could you repeat that, Mr Ingleson?
(Mr Ingleson) Yes. I was struck by some of the words
the Committee has seen: "misused", "mis-selling",
"inappropriate"issues around quality. To the
best of my knowledge, none of those apply to anything which is
illegal. They may be unsatisfactory and they may mean that students
and learners have had bad quality experiences, but they are within
the strict letter of the scheme. Students only had to attend once
for the ILA to be paid in full. That is part of the issue for
us, when we get hammered for the financial arrangements if people
drop out before they complete and they have to get to the end
of our programmes for us to generate our full funding, There is
a difference in principle there from the same department which
is, I find, quite staggering.
226. A question for Mr Gibson first about the
AoC survey. 105 colleges responded to your survey, which is less
than 25 per cent of your membership.
(Mr Gibson) Yes.
227. We assume, therefore, that for the other
75 per cent this was not really an issue and they did not suffer
significant losses as a result of this.
(Mr Gibson) No. No, is the simple answer. This was
by 22 January and therefore had only gone out towards Christmas,
so I think there would be others, through you, Chairman, which
had not had the chance to answer by then.
228. In terms of the typical loss per college
on the basis of that survey, it comes out at about £25,000
per college (£2.5 million and 105 colleges).
(Mr Gibson) As I know your academic background, I
will fully accept that! I have not worked it out, though.
229. I think the figure of £25,000 holds
(Mr Gibson) OK.
230. Mr Ingleson, how is it that Preston College
is declaring a loss of a quarter of a million? Accepting that
your budget is larger than the average college budget, is there
not a strange discrepancy between the average £25,000 reported
by the AoC colleges involved in the survey and your figure of
a quarter of a million?
(Mr Ingleson) I cannot speak with authority about
what colleagues in other institutions have done with this. Preston
was part of the original 12 pilots, the local TEC was one of the
original pathfinder operations, so we have been involved with
this since 1998. I was not there then; I speak second-hand this
morning. The group of staff that was particularly concerned with
an outreach activity, and worked with trade unions in particular,
was quite clear this represented a significant opportunity to
hit the students that they were being asked to work with, so we
were very pro-active in our approach to that. I think that is
the difference, that if we had simply said, "We will take
this as a thesis and we will simply be receptive if somebody walks
through the door and says, "I've got a bit of paper that
says I am entitled to an allowance, what do I do with it?'"
then you have a very different approach. I referred earlier to
the way in which, for instance, we briefed trade union learning
representatives in an attempt to spread the word on this and I
think we have seen the benefit of that.
231. I can understand how your college could
have been more pro-active at an earlier stage and therefore taken
advantage of it to a greater extent, but is it not the case that
the figure of £250,000 is built on the assumption that the
ILAs provided a contribution of £150 per person?
(Mr Ingleson) It is a bit less than that. On average
for us, when you do the 80/20 per cent split, it is about £100
232. So you are not assuming that the original
£150 which was available in the pilot scheme would continue?
(Mr Ingleson) The way we have done this . . . Is it
OK to go into the detail, Chairman?
233. Certainly. We have concurrent inquiry into
further education, so this is all good grist to the mill.
(Mr Ingleson) The decision we took was that we would
seek to honour the arrangement that we had advertised, so we standardised
our prices mid year, changed the fee levels. Let us take an example
like the computer driving licence course. We set the fee for that
at £138. That allowed us to say to people, "We will
then discount your fee in exactly the same way that the 80 per
cent discount would have done and you pay us your £25."
So we honoured that particular situation.
234. The quarter of a million is anticipated
fee income for the following financial year.
(Mr Ingleson) Yes. And the basis for that calculation
is that last year we enrolled just over 4,000 people on accounts
that were subsidised by ILAs. We had at the time of the closure
of the programme enrolled this academic year just slightly over
1,500 students. That is where we get the £2,600 shortfall
at £100 a head, which gives us our £260,000.
235. You mentioned the previous example of the
withdrawal of funding for Demand-Led Elements but that was not
quite the same, was it? because in that case there was not a bureaucracy
or a bureaucratic structure that applied to the student numbers,
there were no pin numbers, there were no accounts and so on. In
terms of the outcome of the future, do you think there is any
value in the concept of an Individual Learning Account as opposed
to simply the provision of fee remission? What extra value does
the concept of the account give?
(Mr Ingleson) My understanding of the principle is
that it places the discretion of choice in the hands of the individual
in a way which may be running it through the providers, it might
not. In practice, I would say that this is actually not a demand-led
scheme at all. It has been a provider-led scheme and it is only
through the promotion of it that we have attracted many of the
individuals that we have. The examples I have given on the bottom
of the sheet, which are quite detailed, are, I hope, something
that colleagues in the LSC will take seriously, and, indeed, within
the Department, but there are opportunities here to replace parts
of the very complex funding machinery rather than adding on yet
another bit which has its own rules, different audit trails and
different sets of paperwork. The simplicity of thatnot
that I would necessarily support wholeheartedly some of the examples
that I have givenwould greatly outweigh I think, in terms
of the numbers that would be reached by the funding, the benefits
that we have had through the operation of the Individual Learning
Account in its first form.
236. I was intrigued by one of the answers you
gave earlier about the reason for the Government shutting it down
was purely overspend in your view and nothing to do with fraud.
In answer to one of the previous questions, you said why you think
that is. That is in contradiction to some of the comments that
we have received from other witnesses who clearly feltindeed
one of them actually warned the Governmentthat the system
was open to fraud. In your experience, did you feel the same,
that there was the potential for fraudulent abuse? If so, did
you warn the Government?
(Mr Ingleson) We took no action to warn any other
external agency. We had experiences of what we regarded as shoddy
practice; we had no direct experience of anything that I would
237. That shoddy practice was on whose behalf?
Presumably not your own.
(Mr Ingleson) No, we had examples of staff who had
received a knock on the door, somebody said, "Sign this piece
of paper and I'll give you a CD and this book." You sign
to say you have received the materials for this distance learning
course, tick "ILA paid in full," and never seen again.
238. Was that something that occurred on a regular
(Mr Ingleson) There was sufficient anecdotal evidence
to suggest there was a lot of that practice going on, yes.
239. If the ILA had a failing, it was that it
did not actually reach the target or roots that it was supposed
to reach. I wondered how many out of those 4,000 people that the
Preston College got involved, were actually individuals with no
qualifications at all? I think nationally the statistic is 16
per cent. Were you above that or below?
(Mr Ingleson) I cannot answer that in detail. In the
time I had to get here, I was not able to provide information
in that level of detail.