Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 588 - 599)




  588. Good morning, Ms Metcalf, Mr Doyle, Mr Pilling. Thank you very much for coming back for a second round of this. I hope you realise that this Committee does try to take a positive attitude to its witnesses. We got a lot of information from you last time and in a sense we were doing a forensic job two weeks ago. A lot of the things we shall be asking this morning will be in the frame of every member of this Committee very strongly believing in the ILA principle and wanting to see an ILA Mark 2 and a very successful one as soon as possible. This is the last oral evidence session of the Committee in this inquiry. We want to get our report out and written just as soon as possible because we want it to influence that next phase. A lot of our questions will be looking forward. You are the people with a great deal of expertise and we want to learn from your experience and expertise how we make the ILA 2 one which gets that balance which the Minister kept referring to yesterday, the balance between being light of touch, being not too bureaucratic, but having quality assurance and secure in its architecture. Thank you for your attendance again and that is the spirit in which we shall be asking questions today. Mr Doyle, do you want to say anything to start off?

  (Mr Doyle) No, I do not think I do really. We are quite happy to get straight into it.

  589. Excellent. What about your colleagues? Are they happy?
  (Mr Pilling) Fine.

  590. I am conscious, Mr Pilling, that you had less chance to contribute last time than your two colleagues.
  (Mr Pilling) That is fine.

  591. I do not know whether you have seen any of the transcript of yesterday's meeting with the Minister. On the negative side he said that he thought some aspects of your performance were not up to scratch, but on the whole he was reasonably positive about the relationship with Capita. Give us some overview of where you are in terms of working with the Department to build a new ILA? What is the main thing?
  (Mr Doyle) It is still early days in terms of building on what ILA 2 will look like. It is true to say that quite a lot of time has been spent in the early weeks going back over some of the issues which occurred in the early days. We are working closely with the Department now in two areas really: one is around what we might do around technology and systems in the IT sense, in terms of how we might tighten up those sorts of areas to bring up the quality assurance as much as we can so that we get a balance between a freedom at the front end of the scheme and tightening up systems as best we can and looking for new areas where systems might be able to be tightened to help in that front-end openness. In the coming weeks and at a meeting taking place today we are looking to talk about Capita being more involved in the overall make-up of the scheme and the business plan around what any new scheme might look like along with others.
  (Ms Metcalf) The difficulty is that obviously we have not yet had a further steer from the Department about the exact shape of any ILA 2, but in our discussions with them we were clear that we would want to reinforce the controls around the provider element. To me, what is emerging is that it is likely that there should be some involvement perhaps on a local level, perhaps with the Learning and Skills Councils, perhaps moving into the public sector that pre-accreditation process might involve FEFC. So in effect there is a pre-registration process and then the quality assured providers could move towards a national database which we would hold. In a sense it would be much more of a public/private partnership in that we would bring more stakeholders in terms of how it is set up. It is also clear that we need to look and explore more carefully the point at which payment mechanisms come into play. It is clear that at the moment in the public sector payments are not always made up front and of course with the ILA it was at the point of registration on the course. It might be more appropriate to look at phasing those payments. We are certainly in discussions with the DfES about that. Also perhaps more training for some of the providers in terms of IT skills, in terms of them as providers understanding their responsibilities, understanding the need to change ID user access and put in a few more requirements around that side. Moving on in terms of the individual, again we have learned the lesson that perhaps individuals should recognise more of the value of the ILA membership. Some individuals have not considered that an ILA membership is a licence to have some money. We need to look very carefully at how we can get and instil in them the value of their ILA membership, instil in them the need to treat it as a secure number, instil in them the notion that perhaps they should provide supporting evidence in terms of their application and on the other side, to feed back more regularly how they are spending that money. Those are the sorts of mechanisms we want to bring in. I suppose also, alongside that, we would start to look more to the Department than ourselves in terms of the course eligibility. We have quite a wide definition in terms of acceptance criteria for courses and the new ILA scheme might want to target those courses more carefully and perhaps put something round them again in terms of quality assurance so that it is not just the provider which is quality assured but also the product. One of the lessons for me in this is that a number of people who were entering learning, which was very laudable, were people who had not had experience of learning and therefore with hindsight they were perhaps not the right people to make the judgement on the quality of the product. I know you had some discussion yesterday in terms of how the product could be marketed. I know reading the transcript that there was concern about the notion of door-to-door marketing. One of the things I think was very successful in ILA 1 and I hope we do not lose, was that the market became imaginative and the market did actually capture new individuals who were not previously accustomed to being involved in education. It would be very sad if that went. What we have to try to do is harness that balance in terms of imaginative marketing, but with a quality product. Perhaps the quality product is the area we need to focus on.

  592. That is all very interesting and I am glad that you picked up that at least the Chairman is not against doorstep selling of products. It seems to be a very good and honoured tradition, as long as the product is a good one. What I am worried about a bit from what Mr Doyle and Ms Metcalf said was that it all sounds a bit tentative. Yesterday when the Minister came here, he said he wanted to pay tribute to his civil servants, they are burning the midnight oil, they are toiling away, they are not only finding out what went wrong with the scheme but remodelling the new scheme, ILA 2. As far as we are concerned, the evidence we have had is that there are many hurt people out there, people whose providers have gone bankrupt, people who have lost their ILA opportunity. This Committee really thought, certainly I as Chairman thought, you would have been toiling away, Capita and the Department, burning the midnight oil, getting ILA 2, working on what went wrong, building the new structure. What you are saying is that you are having a meeting today, but it all seems a bit slow considering the urgency of the situation.
  (Ms Metcalf) I am afraid that I have to say that although we are in discussions with them, there are no dates in the diary, there is no schedule yet as far as I am aware that we are actually working to. Although we are exploring options with them, we do not have a precise timetable of dates or a delivery plan at this point.

  593. Mr Doyle, given what a pre-eminent position you have in the market and you are such a well-known company, would it not be good for your company profile if you were battering down the door at DfES and saying, "Listen guys, we know what went wrong, we know the mistakes, this is what you have to do, get this show back on the road and get it back soon"? Surely that is really in a sense your niche in the market as a private sector provider.
  (Mr Doyle) Yes and I believe we are doing that, but there is always a balance in these things. Not to dwell on the negatives, but we have said that there are things in this that we have done wrong. Not to appear too arrogant and bash the door down too quickly is the right thing to do. We have been working very closely with the Department. We have always worked very closely with the Department in terms of putting forward areas where we think we can make improvements and we can get moving. There is unfortunately a pace with these things that we have to move at. I as an individual am a very impatient guy, and my colleagues at Capita, and you do not build the company we have built without cracking on and getting on and doing things. We are keen and we do want to get on with things.

  594. May this Committee just send that message to you? Yesterday, the Minister was as hard hearted as a classic Scrooge before his conversion. When asked whether it was possible to pay any compensation to any of the providers, to any of the people who lost their training, the answer was "No, absolutely no question". It is interesting that no-one in government has said to you no money, you are not going to get any of your money because you failed to deliver on the contract to a certain standard. In a sense here are these small and medium businesses out there in the wilderness but not Capita. It just seems to me unfair that the Minister has a good cosy relationship with you, whereas the Government do not seem to care about the rest of the small people out there.
  (Mr Doyle) Some of the meetings I have been a party to over recent months with the Department would not be described as cosy. There have been some quite hard and quite difficult conversations about all sorts of issues. It is not cosy for the sake of being cosy, there has been some real heart searching, some real fundamental information gone over as to our performance and how we performed on this and where we stand and all the rest of it. I believe what the Minister was expressing yesterday was the outcome of some of that soul searching in that as evidence was coming to the fore and more real evidence around as to what went wrong, as to what our role in this was, how we behaved, the things we have got wrong, the things we have got right, a balanced view was coming forward yesterday that we may not be the complete ogre in this and that we may have a lot to offer going forward. That is not to say there have not been some very difficult conversations between ourselves and the Department over recent months.

  595. I do still come back to the sense of urgency. I and this Committee would have thought that whoever plans this Mark 2 would be well on with it. With the Minister telling us to get our report in fast and we galvanising ourselves to do that, why on earth can the Department and yourselves not get together and get Mark 2 ready for launch?
  (Mr Doyle) We have the message loud and clear, I assure you. We are eager. We would love to be a part of ILA 2. We believe we have lots of good ideas we can put forward. We are eager. There will be nothing better for all of us than to get ILA 2 on the road again. That would do all of us a great deal of good. Unfortunately there is a pace at which these things have to move. I suppose one of the concerns I share with Denyse is that what we must not do because of the things that went wrong in ILA 1 is become ultra cautious in ILA 2. Human nature is likely to do that. We have to go through those early machinations of people swinging completely to one side in terms of being very protective in terms of what ILA 2 might look like because of the issues. You immediately jump. If this is what happens when it goes wrong there is absolutely no way on this earth that ILA 2 can be allowed go wrong so you move right to one side of the pendulum and get ever so protective, ever so tight on the scheme, You almost have to go that far before people start to get the confidence to come back to get somewhere in the middle where we reach the balance we are all searching for.

Mr Pollard

  596. I am very happy to hear all that. That is really positive in moving forward. I have two simple questions. We heard yesterday that mis-selling in one month was 0.33 per cent and in the subsequent month it was 0.61 per cent. There must be a point at which you say 0.33 per cent is okay, we can live with that or 0.61 per cent is okay. What would you say would be the value you would feel was bearable but beyond that you have to do something about it?
  (Mr Doyle) That is a difficult question.
  (Mr Pilling) It is not really our decision at the end of the day. They are public funds and from our perspective it is a departmental matter.

  597. You could say you want zero, but that is clearly not possible, is it? You get Jack the lad out there who will look upon it as a challenge to get through and that is where we have been. People were going around selling disks which cost 50p and charging £150.
  (Mr Pilling) The aim surely should be to have fraud zero. What we and the Department would always be trying to do is achieve that. Through a process of continual monitoring, now that we have more information about some of the issues, we would continually look to close each and every loophole down. The problem we have is how far to go and that is your concern as well and you then start making the scheme so difficult for people to use that they just walk away and the whole thing falls down. I cannot give you an exact number because at the end of the day it is how comfortable the Department feel about that money going into the wrong hands.

  598. You are suggesting that it was the rate of increase rather than the absolute value which was of more concern.
  (Mr Pilling) Absolutely.
  (Mr Doyle) If I lean on experience in other contracts, if you are working in the finance sector, you do not work in a bank or insurance company which actually says it is okay to get it wrong up to this point as they will write off the money. They never actually say that. But they do write off money because there comes a point at which it becomes more costly to do. What they want you doing all the time is concentrating on getting it down to zero. What you are doing all the time is working hard on having processes in place and you are reviewing those processes. If your statistics start to tell you that the rate of increase is starting to grow, you have a different kind of conversation and you may have a spell where you work with your customer and the customer says he wants you to get heavier about this or more difficult about this or to write some letters or to take some action. You will have an onslaught for a period of time to let everybody know that you are on the case and you bring that back down again to a point where the customer may say you can ease off a bit and move on in a certain way. It is difficult to give you a number but it is that constant working away at it. If the rate of climb starts to go up, then you take action.

  599. How much does it cost to administer each ILA account? This is about getting things in proportion, is it not? If it is worth £200 or whatever, you do not want to be spending £450 checking, administering, following up and whatever else you have to do.
  (Mr Doyle) That is a number I feel I should have, but I do not.
  (Ms Metcalf) There are two factors there: one is the actual cost of the administration and one is the value of the account, so that the value of the abuse would hit the ceiling in terms of the ILA allowance. Actually one does not look at it quite as simplistically as that.

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