Select Committee on Education and Skills Third Report


1.Presented with a manifesto commitment, and a single target of one million users, insufficient attention was given both to the reasons for the previous rejection of an ILA scheme and to ensuring that quantity was balanced by quality. While the development of targets for the achievement of policy objectives is to be commended, such targets should be based on outcomes not tied to specific delivery mechanisms (paragraph 11).
The TEC Pilots
2.The implications of opening up the scheme to new providers not known to TECs was not thought through either in terms of the quality of learning on offer or the risk of fraud. As a significant change to the pilot scheme, this should have merited greater consideration (paragraph 15).
Saving to Learn
3.Once the savings concept had been replaced by a straightforward offer of a Government-subsidised discount, the name "Individual Learning Account" ceased to be a strictly accurate description of the scheme (paragraph 20).
The National Framework
4.We regard the failure of the Department for Education and Skills to learn from the mistakes made in the past by its predecessors and other Government Departments to be one of the most disturbing aspects of the ILA experience (paragraph 22).
The 80 per cent discount and the end of vocational tax relief
5.The introduction of the 80 per cent discount was a crucial step in widening the attractiveness of the ILA to unscrupulous operators. ... There was no check on the provider to give good value for money, and no incentive for the customer to complain (paragraph 29).
The delivery model
6.We welcome the entry of new and innovative providers into the market for delivering lifelong learning. It should have been possible to design a scheme to encourage new providers that was not wide open to fraud or abuse by unscrupulous people posing as learning providers, but the lack of quality assurance made it almost inevitable that it would be abused (paragraph 33).
7.The failure of the DfES to learn from past experiences, such as franchising and demand-led funding, is a matter of concern (paragraph 35).
Public/Private Partnership
8.The change control process clearly did not work (paragraph 37).
9.Despite the out-sourcing of service delivery, the risks in effect always remained with the Department. Surprisingly, the potential expertise of Capita in designing systems to be fraud-resistant was neither called upon, nor offered (paragraph 38).
10.There is nothing in the evidence we have received to suggest that Ministers sought advice from other Government Departments, or even heeded warnings from within their own Department, on how to protect such a scheme from unscrupulous opportunists (paragraph 39).
11.Capita's ILA Centre gave any provider who joined the system unlimited access to individuals' accounts (paragraph 42).
12.An unscrupulous provider could trawl the database and submit claims for having trained any individual on the system whose account had not already been spent (paragraph 43).
13.We recommend that in future the non-confidential clauses of any such major Service Provider Agreement should be laid before Parliament at least three weeks before coming into effect, in order to allow interested parties and this Select Committee to assess the practicality of the proposed delivery model (paragraph 47).
The Individual Contribution
14.We recommend that in the successor scheme to the ILA providers should be required to make clear to learners that the learners have a choice about how, when and with whom they use their ILA (paragraph 51).
15.Until remedial measures were taken in the summer of 2001, Capita's ILA Centre could not prevent unscrupulous providers creating accounts for individuals whom they had not trained, or who did not even exist (paragraph 53).
Accreditation of providers - learndirect
16.It seems surprising to this Committee that Capita was not able to make a speedy assessment of the suitability of the learndirect database to provide assurance on the quality of providers and to advise the Department accordingly (paragraph 55).
17.The unavailability of a list of accredited training providers undermined a key part of the ILA structure. ... The DfES confused quality assurance with registration. It is this confusion which lies at the heart of the ILA debacle. Without a quality threshold or any systematic audit, there was nothing to stop unscrupulous opportunists signing up as providers on the ILA database (paragraph 56).
The £200 cap
18.The Department apparently failed to heed the warning, given three months before the national roll-out of the ILA scheme, from its own experts on the Further Education Funding Council, of the risk to public funding if rigorous quality arrangements were not put in place (paragraph 61).
The emerging concerns - 'deadweight'
19.We recommend that any successor scheme to the ILA should be focussed on adults whose highest level of qualification is at level 2 or below and that particular efforts should be made to promote the scheme through employers, trade unions, community groups, approved training providers, schools and colleges (paragraph 73).
The emerging concerns - over-spending
20.Without access to the detailed notes of confidential discussions between Treasury and DFES officials, we cannot know how large a part the desire to rein in over-spending played in the demise of the ILA. This is not a satisfactory position and we have requested the Secretary of State to provide us with the relevant papers (paragraph 80).
The increasing number of complaints
21.Both types of complaint mechanism, for the provider and for the learner, failed badly in the ILA scheme and any successor scheme will have to perform much better in recognising, handling, remedying and learning from complaints (paragraph 87).
Misuse, abuse and fraud
22.We find it hard to credit that Capita, a major player in winning contracts for work contracted out to the private sector, should not have pointed out that, without a quality threshold for providers, the ILA was a disaster waiting to happen. The culpability of Capita was matched by that of the Department, in particular for not demanding more robust anti­fraud mechanisms in their specification (paragraph 97).
23.It is a matter of concern that, while Ministers were clear that misuse and abuse had taken place, alongside fraud, they were unable to provide either an exhaustive list or a working definition of misuse and abuse. The Department needs to be clear about which activities are unacceptable (paragraph 101).
Remedial measures
24.We recommend that the successes of trusted intermediaries, such as trade union learning representatives, should be taken fully into account in designing an ILA successor scheme (paragraph 106).
Compensation for learning providers
25.We recommend that the Department should at least re-imburse those bona fide learning providers who can demonstrate that they have been financially disadvantaged by the accelerated date of closure of the scheme (paragraph 127).
26.We recommend that the report on system security from Cap Gemini Ernst & Young should be placed in the House of Commons Library as soon as it is available (paragraph 138).
27.We recommend that the results of the review of the development and management of Individual Learning Accounts by the DfES's Head of Internal Audit should be placed in the House of Commons Library as soon as it is available (paragraph 139).
28.We recommend that the National Audit Office should take a close interest in the ILA failure, but we expect its analysis to take a balanced approach as far as risk-taking is concerned (paragraph 142).
29.The Department should have undertaken a full risk assessment of the ILA scheme, which should have been aimed not at designing all risk out of the programme, but rather at understanding the level of risk which was being accepted in return for a recognised benefit such as ease of access (paragraph 143).
Partnership with private sector
30.There should not be an automatic assumption that Capita should be the provider to take forward any new ILA scheme. The Committee notes the contrast between the Department's continuing co-operation with Capita and its refusal to consider compensation for learning providers (paragraph 151).
31.By retaining even the smallest details of policy design within the Department, an opportunity was missed to transfer the risks to the private sector by transferring fuller responsibility for the management of the scheme to the private sector (paragraph 153).
32.It is not clear who was responsible for delivering the specific outcomes of the ILA project. There does appear to have been some confusion of responsibilities (paragraph 154).
33.We do not under-estimate the difficulty of getting right the balance between policy and delivery, but we question whether the DfES could have been bolder and given Capita a wider brief to deliver the desired outcomes of the ILA project (paragraph155).
Brand name
34.We recommend that the value of the ILA brand name should be market tested by an independent professional firm with relevant expertise in this field before the successor scheme is announced (paragraph 156).
Quality Assurance
35.Quality assurance is the one indispensable feature that needs to be built in from the start if the new version of the ILA is to succeed. Prior accreditation of providers would be essential; post-payment audit checks should be carefully targeted, based on a risk profile of providers and their claims. Prior accreditation should be designed to ensure that any obstacles to new providers and innovation are minimized (paragraph 159).
An appropriate accreditation body
36.We would expect the Learning and Skills Council to take the lead in prior accreditation, with a fast-track registration process for providers with a proven track record of delivering quality training. ... National providers, and providers of on-line or distance learning, will almost certainly need to be registered at a national level (paragraph 164).
37.We recommend (a) that the educational and social objectives of any successor scheme should be defined before determining a delivery mechanism and financial support criteria which advance those objectives and (b) that those objectives should be closely integrated with other aspects of policy towards lifelong learning (paragraph 170).
Payment in stages
38.We expect that the new ILA system will include some kind of staged payment system, perhaps combined with early notification to the individual of how their ILA has been spent (paragraph 172).
Advice and guidance
39.We recommend that provision should be made to pay for advice and guidance where this can be demonstrated to advance the objectives of the scheme in terms of reaching the target audience (paragraph 173).
Group learning
40.We see the possibility of some form of pooling in the successor to ILAs as a promising area for future development (paragraph 174).
Timing and consultation
41.We are not satisfied that the Government understood, at a sufficiently early stage, the effect of the sudden closure of the scheme on providers. Many of the smaller and more innovative providers may be unwilling to risk entry into a second ILA scheme without a contractual arrangement with the Department (paragraph 179).
42.The new form of ILA should be a permanent and successful part of the lifelong learning strategy (paragraph 180).
43.We support Ministers in their determination to learn the lessons from the collapse of the first version of ILAs and to bring forward as soon as practicable a more robust version which is capable of expanding adult learning, to the benefit of each learner and the nation as a whole (paragraph 182).

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