| Exmination of Witnesses (Questions
WEDNESDAY 6 FEBRUARY 2002
320. You had no contact with the Treasury.
(Mr Hall) No, quangos tend not to have direct
contact with the Treasury. The Treasury are sometimes at the meetings,
and that is as close as we get to them.
(Mr Stark) As far as the Learning and Skills
Council was concerned, the scheme was implemented nationally in
September 2000. The LSC was not created at that point. From the
moment that the scheme was running and we were up and running,
we were also monitoring evidence of at least inconsistent behaviour.
I personally collected some leaflets from a booth in Victoria
Street that I thought was offering very strange provision, and
I took it round to colleagues . . .
321. We are getting into murky territory again.
322. We did talk about widening the scope earlier!
Mr Hall, when you advised officials from the Department for Education
and Skills about your concerns from the lessons that you had learned
about abuse made in previous schemes, were you talking about poor
quality, i.e., the scams that you referred to, or were you talking
about fraud, or both?
(Mr Hall) Our main concern at that timeand
our experience with ILAs has confirmed the worry and the need
to take some decisive actionis that there seemed to be a
group of people having a profound understanding of funding, whether
it be the ESF first of all, or then franchising, then ILAsand
I fear that next it will be e-learning, where people will spot
the opportunity very quickly for very quick and substantial earnings.
I think we have got to take that very seriously. Perhaps it is
more in the domain of the PAC, but my recommendation to the Department
is that we need a kind of Interpol crossing funding frontiers.
I think each new body that takes responsibility for one of these
areas of activity is surprised by the rapidity of it. We have
got to bring together the best people from the different regulatory
agencies, including the Qualifications and Curriculum Authority,
and drive this out. Too many excellent providers, as you have
heard this morning, whether private providers or colleges or others
who are trying to do their best, are besmirched by what has happened
first to the FE sector, and even before thatsome of the
ESF schemes caused great problems for a college in Wales, which
you are aware of, and one of our colleges in Hampshire; and now
ILAs. I think we have to create a greater capacity for driving
323. You are concerned about bothfraud and scams.
(Mr Hall) It is
324. Yes or
(Mr Hall) Well, if I say "yes", I am answering
a wrong question. The police could not bring a prosecution in
the Welsh case; they did not feel they could find evidence to
prove fraud. It is not a term that I would want to bandy around.
I think I have explained it carefully. There are people who exploit
opportunities and make a lot of money very quickly, and it is
exploiting loopholes in the eligibility framework, and it is generally
being very quick on their feet. I do not think they are the people
everybody wants to help us widen participation.
325. We are talking about entrepreneurs, are
we not, of a certain type?
(Mr Hall) I have heard on the street that "Ferrari
Nick" is supposed to be one of the leading people. If somebody
can get an epithet like that, and be known at that level, that
is when you have to take concerted action. I think the Department
is considering something very similar.
(Mr Ingleson) Does being critical of that private
sector entrepreneurial activity brand us all as "wreckers",
326. What discussions are currently taking place
between the LSC and the DfES in terms of the success of the ILA?
(Mr Stark) Extensive. A colleague who was working
directly with the Department is now on secondment to me and forms
part of that joint liaison group that is planning future structures.
At the moment they are only at the point of carrying out a consultation
survey, which you have been informed about. The kind of idea that
is set out in this memorandum, I hope, will be at least taken
into account in any design principles of the scheme.
327. Can we assume from that, that the LSC will
have a role in the successor of the ILA?
(Mr Stark) We are certainly expecting not just to
have a role, but under the arrangements that were planned we would
inherit the responsibility for the management of any contract,
whether it is with Capita or anybody else, in the re-launched
328. Does that concern you? There was a feeling
that the institutional framework of learning sometimes gets in
the way of doing things that are fast, light on their feet and
get to the parts that other schemes do not reach. There is a sort
of sadness, when I talk to the private providers, the people who
came in, that that element is going to be lost. You heard about
the concerns. Mr Hall, you are shortly to leave to go to the other
side of the fence, as a college deputy principal. We wish you
very well in that.
(Mr Hall) Thank you very much.
329. We are happy you remain unscathed. It is
delightful to have you here because we are having an inquiry in
parallel into FEindeed, we may get you back. Poachers who
have left game-keeping are very useful as witnesses. Do you not
feel that mark 2 is going to be absorbed by the establishment,
in a way? Is that a real worry, that some of the essential ingredients
will be lost?
(Mr Hall) There is bound to be a certain nervousness
in the colleges' sector about whether the extra providers who
are going to be welcomed in are going to be funded from the budget
which they see as theirs. If this is to be funded from new money
and if there is to be an opening-up of providers beyond the public
sector, then that is fine. Those colleges would say, "look
at the results of the inspections; look at the outcome of that;
we have nothing to fear". If it is to be a more competitive
marketplace, we will compete on quality, and that is fine, but
let us understand the ground rules. One of the fundamental points
we make to you in our documentation is that for these areas to
work, they require very clear national policy on who pays, how
much and for what. It is adult provision. What is the responsibility
of the employer, the individual and the public purse? As Michael
suggested earlier, on basic skills we would probably all sign
up and say it is 100 per cent public. We, as a society, have failed
if adults cannot read and write, so we will provide free provision.
What happens when you get to level 3? Should there be any subsidy
to a person in the workplace at level 3? Is that going to be totally
a matter of paying for it yourself, or your employer paying for
it, or using a subsidised learning account, in which case that
is a competitive provision? I think there are some fundamental
issues here. One of the difficulties of the ILA scheme was coping
with fee policy. In many cases, the reason that disadvantaged
people do not show up in your figures is because they were getting
100 per cent fee remission. Again, a coherent national policy
on fees is a pre-condition of a successful approach, I would submit.
330. Mr Hall, some people out there would say
FEFCthe previous situation with TECsthe whole apparatus
that was there before was not reaching those people who were difficult
to get into learning. In a very short and meteoric career, the
Individual Learning Account succeeded in a way in which the organisations
that you were involved in, failed.
(Mr Hall) I would need a better evidence base to reach
that conclusion. I do not know how many
331. We believe the evidence that 16 per cent
of the people that were introduced to ILAs had no previous history
(Mr Hall) Sixteen per cent of which figure, Chairman?
332. Sixteen per cent of total account holders.
(Mr Hall) Is that accounts opened or accounts actually
333. Accounts actually used.
(Mr Stark) Chairman, having looked at the evidence
given to you by York Consulting colleagues, I think they are saying
that that is no better than the proportion of the population at
large. So the ILA programme was not successfully targeted, and
if we look at research on "Bite-Size", it targeted more
effectively. This is a question about pounds for results. £270
million has been spent on ILAs. If it has only reached the average
targeting, and yet with £4 million, we can do more, there
has to be a question.
334. What are the three things you want to see
in ILA mark 2?
(Mr Hall) We want to see a quality threshold. We want
to see it integrated as part of a whole raft of proper strategy,
particularly the workforce developmentwe think all the
research evidence shows it has been most successfulthe
union schemes, the small company schemes. The two research documents
we showed you both said it was most successful in our fee discount
and our pathfinder linked to employers because it was particularly
well suited to that. Thirdly we have to have a debate and a national
policy on who pays for what, and therefore what the funding policy
is for public sector institutions.
(Mr Stark) If I can add to those points, which are
the fundamental points, something about the community; the community
of interests between employer, individual as employee and also
as a member of society, and the state. The state does not have
to be just the Learning & Skills Council; there might be other
bits of the public sector that are interested in developing learning
through such a mechanism. There is a huge possibility there. The
version ILAs that we have at the moment may be useful and replicable,
but we need to go beyond it.
335. Mr Ingleson?
(Mr Ingleson) I have nothing to add to the comments
of my colleagues, sir, and if they are still talking to me I look
forward to working with them!