Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 440-459)



  440. Was Capita aware of that? Was Capita aware of concerns from the Learning and Skills Council?
  (Ms Metcalf) I cannot comment. We did have some discussion with the Learning and Skills Council and we were aware that the scheme was changing, that the emphasis of the scheme was different as from the pilots, but I am sorry, I cannot confirm or deny.[1]

Mr Pollard

  441. Mr Doyle, you have brought in the matter of housing benefit and I know from my personal experience that the housing benefit form is 30 pages long. The ILA form is just one page. From your experience, would you suggest that you should have been saying to the Minister, "Minister, with a 30-page form for housing benefit, we have immense fraud, so with a one-page form we will have massive fraud. You are barmy if you put this scheme in"? Why were you not saying that right at the beginning of the piece?
  (Mr Doyle) I do not think we believed that was the case.

  442. From your experience, you have brought in the matter of housing benefit and we know that there is huge fraud there and that it is very difficult to get over, so the form is tightened each year to try and stop fraud. You are saying to me now that with that past experience of fraud and trying to get fraud down, you did not advise the Minister that the one-page form was absolutely open to abuse. You did say, and I will quote it back, "It is not our remit to change policy", and that seems to indicate that you actually tried to tell the Minister this, but got a dusty answer and had been told to go away, "This is the scheme. Go on and manage it".
  (Mr Doyle) As I tried to say earlier, before this contract was ever let, the Department had been working with advisers. We cannot be a part of the advice team which actually puts together a scheme and then actually bid for that work. We just would not be allowed to do that. So the Department were working with advisers in terms of building up the outline of the scheme against which contractors like us would bid. In there, there were definitions of how the scheme was going to be run. At that time, the scheme was designed to be open and non-bureaucratic. Yes, a one-page form. It was not for us at that time to be criticising whether it should be open or non-bureaucratic. Where I do believe we were at fault is that as time went on and these incidents started to come, then yes, we did not shout loud enough obviously.

  443. Okay. Moving on to complaints and customer service, we have had repeatedly people saying, and I will just quote one or two, "I called three times, got three different answers, pick the most likely one", "Turnaround time for Capita was unacceptable", "Adopt the two out of three answer—really irritating", "Customer service lines, other than to thank you, merely made a note of it", et cetera. All of that would seem to indicate that whilst you brag in your document that through Individual Learning Accounts you seamlessly connect learners with learning providers, the evidence that we have been given does not seem to bear that out.
  (Mr Doyle) I do not know what the dates are of those issues that you have got there. As I previously said, we did have problems with service levels at various times throughout the scheme. These, in the main, were around times of where the volumes were increasing rapidly and we were having problems in keeping pace with that, that is true.

  444. If you go back to what I was asking about previously, if you had assessed the scheme, you bid for it and you won the contract, could you not see that abuse would take place and, therefore, you would be in this position you are now where you are actually defending yourselves and you perhaps should have been a little more aware of this obviously a touch earlier?
  (Mr Doyle) I have been around the game for a long time now and I can promise you that had I spotted it, I would have stopped it or I would not be involved. As I say, we are here today with an awful lot of information and an awful lot of evidence in front of us which was not there 12 months or 15 months ago. We are not here to, we do not enter into contracts of this nature to end up, as pleasant as this is, to be sitting in this situation.

  Chairman: Thank you for that compliment, Mr Doyle. We do not get many compliments!

Mr Turner

  445. You run the scheme in Scotland. I believe that has just reopened. Is that correct?
  (Ms Metcalf) Yes.

  446. But you have kept in it the provision that learning providers have access to the scheme, access to the database in the way in which it was used in England apparently to pull down a lot of these numbers. Is that correct?
  (Ms Metcalf) We have, yes. I should point out that the providers in Scotland do go through an accreditation process which was not engaged in England, but of course the management information which we will have provided for in Scotland will be on a more frequent basis.

  447. Who undertakes the accreditation process in Scotland?
  (Ms Metcalf) Again forgive me, I am not sure if it is the same organisation, learndirect, or not. I am not sure of that point.

  448. But it is outwith your contract?
  (Ms Metcalf) It is outside our contract, yes.

  449. Let me go back to your submission. In paragraphs 13 and 14 you say that the requirements for validation of learning providers were removed from the scheme. That is paragraph 13 and at the bottom of paragraph 14 you say, "Other changes to the original scheme proposals included removal of requirements to authenticate applications to become account holders..." When were those requirements removed and by whom from the scheme?
  (Ms Metcalf) They were removed in May 2000, a matter of weeks before the scheme went live, and they were removed by the Department.

  450. Thank you, at last. When a contract such as this is let, clearly there is a specification drawn up by the client and his adviser, who were KPMG?
  (Mr Doyle) Yes, I believe that is correct.

  451. You then bid and you hopefully win, you win and you then discuss exactly how you are going to implement it—tell me if I am wrong—and then you write a contract and you probably start delivering the scheme before the contract is signed. Was that the case on this occasion?
  (Mr Pilling) I think we operated under a letter of intent before the contract was finalised, yes, because of the time pressures to deliver the service for the scheme.

  452. Based on your discussions built on the specification?
  (Mr Pilling) Yes.

  453. That is the letter of intent.
  (Mr Pilling) Yes, I think we very rapidly went to contract though.

  454. Would you say the contract was significantly different, the scheme as outlined by the contract was significantly different either from that contained in the letter of intent or from that contained in the specification and, if so, how?
  (Mr Pilling) I am not sure I can answer the question. I think Denyse made the point that just prior to actually doing the service live there were some changes and maybe some changes after that. In terms of developing the system, that was obviously going on prior to putting the service live and I think the understanding of the Department's needs in that area were obviously changing as well. I think this was a continual process. I do not think there was one sort of date when you say that it all changed, but I think from the date when the contract was being tendered for right through to the date when we put the service live, there were a number of changes going through the process.
  (Mr Doyle) I was just going to say that we have not done that piece of work to say where we are today, and how does that reflect back to what the contract said. We have not done that piece of work. I may well ask somebody to do that for us. It is not the nature of the way we work. We accept that a contract is a contract and it is signed and put away and then you get on with working with new partners and you are in reality and you do what is needed in reality to make things happen, so we would not naturally have done that piece of work, but it can be done.

  455. So you would expect in the course of your implementing the contract as a result of discussions with your partners, as you call them, that there would be changes made throughout the delivery of the contract?
  (Mr Doyle) Yes, and in most contracts, if not in all contracts, there is a change process to be gone through.

  456. I have one other question and that is about paragraph 19. "...account holders' details", it says here "were being offered for sale, possibly by a Capita employee". This is on 23 November, but I understand that no Capita employee has been charged with any offence. One of my constituents writes to me from Freshwater that she filled in three application forms, by which I assume she means paper application forms, and was logged on to the website by her training provider, so, in other words, she filled in four forms altogether before she succeeded in getting on to the scheme. She did not receive any response to the first three effectively. She then contacted her learning provider who contacted yourselves who told the learning provider that her funding had been taken from her account. She then received her card on 13 November, and she does not say which year, but I assume she means 2001, but the ILA centre told her that the money had been taken from her account on 6 November, in other words, before anyone apparently outside your organisation knew her account number. It was taken from her account by a company whom you named and whom she has named here. How could that company have obtained her learning account details sufficiently to draw down her funding without the involvement of a Capita employee?
  (Mr Doyle) To be honest, I am struggling to follow that. I would be very happy to take it away. I do not think you mentioned a company name.

  457. I did not, but it was mentioned in that letter and it was mentioned to her.
  (Mr Doyle) I would be happy to take that away and deal with that.


  458. I do not think you need to take time to read that now. If you would answer the Member of my Committee in detail on this case, I would be obliged. The point he is making is quite clear, is it not, that the money went out of this woman's account before she had even ever applied and that is something of a mystery?
  (Mr Doyle) We know that has happened and we know that there are instances of that happening. It is how it happened and there are actually different ways that it could have happened and that is what I cannot answer. I am not disputing the fact that it has happened.

  459. Coming back to the generality, here is a scheme that all of us applaud, it is a good scheme and it gets to people. The reason we are here is because we are pretty upset that someone has pulled the plug on it for whatever reason. There are three reasons that have been given to this Committee by you and others, firstly, fraud. What we are getting from you is that you think that at the end of the day that the fraud element is not going to be that big in this scheme. This is what I am getting from you.
  (Mr Doyle) I am not trying to be awkward, but it is important. There are two elements to this. One is the IT system and the fraud related to the IT system which at the moment, on the evidence we have, we do not believe is that great.

1   See Ev 91. Back

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