LESSONS LEARNED REVIEW OF THE DEVELOPMENT,
INTRODUCTION AND OPERATION OF INDIVIDUAL LEARNING ACCOUNTS
SPECIAL INTERNAL AUDIT REVIEW
1. This Special Review was requested by the
Secretary of State and the Permanent Secretary to identify key
lessons to learn from the development, introduction and operation
of the Individual Learning Accounts (ILA) programme. The approach
taken was to review available correspondence and documentation,
and to interview key people involved with the ILA programme to
determine their views on both the achievements and the problems
experienced in the programme.
Summary of Findings
2. It is clear from the submissions reviewed
that decisions on the overall shape and direction of the programme
were made following consultation with, and the agreement of, Ministers.
This included making it a universal programme providing discounts
on a wide range of courses to help encourage adults to take responsibility
for, and contribute to the costs of, their own learning. However,
it has not been possible to identify when and how some decisions
on the operation of the programme were arrived at (see also paragraph
4 b.). Examples of decisions that later led to problems included:
a. The establishment of a buyer beware system
where there would be no central checking of provider viability,
quality or track record.
b. To encourage the widest possible range of
providers (including small, new and innovative) rather than relying
solely on the existing provision from colleges and work based
c. To allow learning providers to retain their
own stocks of ILA application forms. This enabled them to pro-actively
market the programme directly to prospective learners, and sign
them up for their courses.
d. To allow learning providers to determine
the eligibility of most of their own learning courses for ILA
e. The introduction of an 80 per cent subsidy,
initially without a cap, in 1999.
Problems Arising in the Programme
3. Examples of problems that arose include:
a. A significant minority of learning providers
set out to take advantage of the programme by increasing course
prices, aggressive marketing techniques and mis-selling.
b. The prime focus of these suspect providers
was on maximising their income through targeting the most "profitable"
aspects of the programme (initially the £150 contribution
for the first million learners, then the 80 per cent subsidy).
c. Suspect providers also targeted distance
learning. The number of complaints received indicates that some
distance-learning providers offered poor quality learning opportunities
with little or no support.
d. These activities, allied to the overall popularity
of ILAs, led to quicker take-up of learning opportunities than
expected, which in turn led to an over-spending of the available
4. The target to achieve one million ILAs by
March 2002, meant that the ILA Team were under severe time pressure
to establish a service provider contract with Capita, to ensure
that the programme could start in September 2000. The time pressures
contributed to the problems experienced by the programme, particularly
with regard to the contracting process, and were further exacerbated
by the fact that some other key areas of ILA development and operation
did not demonstrate consistently good practice. These included:
a. No business model was developed to help identify
strengths and weaknesses in the policy options available as the
programme was developed.
b. No decision log was set up to record and
track decisions made. This, allied to inadequate knowledge management
and document filing systems within the ILA Team, has meant that
it has not been possible to identify when and how all decisions
were arrived at.
c. Although a great deal of management information
appears to have been collected by Capita, it was not provided
to the Department in a sufficiently helpful format to indicate
possible abuse of the system by providers or to provide the information
for Ministers to decide on action needed.
d. Although a risk register was in place and
being reviewed by the project board, there is insufficient evidence
of active, ongoing management of each risk by a nominated team/individual
outside the Board meetings.
e. Resourcing of some key specialist roles was
not always adequate during the development and operation of the
programme. This is particularly true of both the contract management
and financial management arrangements.
f. Departmental guidance to learning providers
did not clearly specify the requirements and expectations of the
Conclusions & Recommendations
5. The lessons identified by this review are
summarised in the attached Appendix. Some of the key lessons arising
relate to the need to enhance project, risk, contract and financial
6. To carry forward the findings from this review,
we make the following recommendations:
a. To help embed the lessons learned from this review
(see Appendix) into Departmental procedures, they should be made
available to all programme and project boards and managers in
DfES through appropriate media (good practice guidance, web-site,
b. More immediately, the lessons learned from this
review (see Appendix) and all other relevant ILA reviews currently
underway, should be built into the management arrangements for
both the development of the ILA replacement programme and the
wind down of the original ILA programme, where appropriate.
c. To ensure that all the key lessons arising from
the various ILA reviews currently underway are captured, a consolidated
report incorporating all of the lessons learned should be prepared.