Select Committee on Education and Skills Appendices to the Minutes of Evidence


Memorandum from Ms Vivienne Parry (ILA 26)

  I said that I would briefly outline my knowledge of ILAs and in particular that relating to the National Distance Learning College to you. I'm happy to give evidence to the Committee if you would find this helpful.

  Until very recently I wrote the eponymous Cash and Parry consumer page for the News of the World.

  In March 2001, Fiche and Chips, a company offering reconditioned PCs for £300 was the subject of a number of complaints from readers. F & C was one of several companies belonging to the Middlesbrough based Thanx Group. Another Thanx Group company was the National Distance Learning College, a distance learning provider. Both F & C PCs and NDLC courses were advertised on the same direct mail literature. Some 26 million of these leaflets were delivered to homes by the Post Office.

  One particular reader wrote to me in April 2001, having applied for both a NDLC course in computing (with ILA funding) and a reconditioned PC in March.

  She complained, like everyone else, that her PC hadn't been delivered. As a consequence, she'd not been able to commence her NDLC computer course. So she'd asked for her course to be cancelled but received a letter saying that she couldn't cancel it without handing over her ILA details or £150 in cash herself. Learning providers being paid NOT to deliver courses didn't seem right to me and I investigated.

  I discovered that NDLC was in fact offering bogus courses with ILA funding, all of which were said to lead to a City and Guilds diploma. None of them did because NDLC were not accredited to do this. At the time when I first wrote about this (early May), in excess of 30,000 students on ILA funded courses with NDLC believed that they would get a C & G diploma at the end of their studies. Not a single one has done so.

  In addition to this substantial educational fraud, there was also evidence of accounting fraud. For instance, all 400 employees of the Thanx Group were each given a payment of £10 in order to part with their ILA number. There were also a number of cases of ILA details being demanded, despite the course not being delivered. I was also aware that those people who had invited an NDLC salesman into their homes, signed up for a course but cancelled within the seven day cooling off period still had their ILA accounts plundered.

  NDLC courses were then being recommended by learndirect.

  I took all of this to the DfES in late April, via their press office and sent details of the accounting fraud to their offices in Sheffield. I published a major feature on this in early May and forced the DfES to remove NDLC from the learndirect database.

  I subsequently discovered that NDLC had claimed the full 20 per cent ILA of £200 on every single one of its courses by claiming that they all contained "elements of CLAIT"—Computer Literacy and Information Technology. This was a lie and in reality only a couple of courses did so. Students were also being sent unlicensed Microsoft software.

  NDLC continued to tell students that they would receive City and Guilds diplomas, despite information from Trading Standards and C & G to the contrary. Their courses were not fully written and so many students were deliberately stalled when they reached the end of the material the NDLC had managed to write. The course tutors were in fact people taken off the long term unemployment register (for which NDLC received substantial government support). Less than 2 per cent of the tutors were qualified in any way. The DfES were aware of all of this, but astonishingly still did not manage to uncover any fraud within this company.

  NDLC went into receivership on 23 November, after a sustained period of asset stripping to a phoenix company. Over 58,000 students who paid for their courses in full will get neither a completed course nor their money back. An investigation by Trading Standards was indicative of a major fraud and the Fraud Squad are now investigating the whole of the Thanx Group. Of particular concern was that the receiver was deliberately delaying in one NDLC location, in order that a transfer of £77,000 could be banked from the DfES on that very morning, even though none of the students who had paid for these courses could ever or would ever receive them. I believe that, at the very least, this represents an offence under Section 213 or 214 of the Insolvency Act.

  Some £7.5 million has gone to the NDLC. Not a single student either finished their course or got any sort of qualification despite the fact that this problem was flagged up so early. Suspension of the NDLC would have been the appropriate reaction. Instead it was allowed to go on defrauding students.

  These are the basic facts. There is much else besides including the role of the awarding bodies, the lack of accountability within the DfES etc etc.

Ms Vivienne Parry

February 2002

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