Examination of Witness(Questions 80-99)
MR IVAN
LEWIS, MP
MONDAY 25 NOVEMBER 2002
80. Oh, right.
(Mr Lewis) Why could that not be possible?
81. I did say is it one thing or the other.
(Mr Lewis) There could quite legitimately be a combination
of those options.
82. So I could learn escapology and plumbing
in Kent?
(Mr Lewis) If you really wanted to, Mr Shaw, yes.
Chairman
83. Can I just press you. Have we got any more
ICT tutors in Her Majesty's prisons as a result of the ILA experience?
In other words, it has been a long time since this all broke out,
all this fraud, but has anyone been charged, convicted and sent
to prison?
(Mr Lewis) One person has been convicted. Ten people
have been cautioned. The police are investigating another 100
cases.
84. This is all costing the criminal justice
system an enormous amount of money, surely.
(Mr Lewis) Can I say to you, Chairman, that one of
the things this Committee, I think legitimately, asked serious
questions about was was the ILA I scheme closed down for financial
reasons or was it closed down because of genuine concern about
fraud. I think the National Audit Office in its catalogue of justifiable
criticism said that the department was right to close this scheme
down when it did. I believe it was right to do that, I believe
it is right, in the best possible way it can, to pursue those
situations where money was spent in an irregular way, some of
it fraudulent, some of it less than fraud but it was irregular.
To some extent we are dependent on the criminal justice system
to deal with fraud and criminal activity and it is not an easy
situation to deal with. Was it worth it? I think that the National
Audit Office's report demonstrated that we did close it down for
the right reasons and we did do it at the right time.
85. Would it have been closed down earlier?
We understand that the Treasury was leaning on you to keep it
going, is that right?
(Mr Lewis) I have no knowledge of that.
86. You have no knowledge of the Treasury—
(Mr Lewis) I was not the Minister responsible at the
time. That is not a cop out, I was not part of those discussions.
87. Is that not one of the frustrations, that
the people that we all represent feel that here was a scheme,
a good scheme that went wrong for all sorts of reasons and a great
deal of public money was lost but actually on the ministerial
side no-one ever was called to account, no-one resigned, no-one
put his hand up and said, "It was my fault, I designed it
wrong". Four or five ministers were involved and not one
minister was tracked down in terms of ministerial responsibility,
which we are supposed to have in the British constitution. On
the other hand, it seems that nobody really has been, or is going
to be, punished for the fraud. On both sides the punter out there
can feel pretty cheesed off, can he not, with the British system?
(Mr Lewis) There are a number of both police and departmental
investigations that are still ongoing and, therefore, I do not
want to pre-empt those but I will answer the question quite directly.
The only ounce of credit that the Department deserves in this
situation is we have held our hands up, we have admitted collective
responsibility. The Permanent Secretary used the word "ashamed",
and I do not think many permanent secretaries over many years
have ever used a word such as that, although maybe it should have
been used on more occasions thinking back historically. We are
not into hanging and flogging, we are into accountability and
transparency. We have admitted that we made serious mistakes collectively.
88. Minister, you are missing my point. I think
it was a very brave statement by the Permanent Secretary. He is
the Head of your Civil Service in your Department. Not one minister
said, "It was my fault". Not one minister said, "I
have a share in the blame of this being misconceived and getting
it wrong".
(Mr Lewis) We take collective responsibility in the
Department for things that go well and things that go badly.
89. There are many examples of ministers resigning
when they get things wrong but it has not happened here, has it?
(Mr Lewis) That is a matter for the Select Committee.
No minister, as I understand it, has resigned because of Individual
Learning Accounts, no.
90. Could I just shift sideways on that and
ask you in terms of Capita, did you do a good deal? We know in
the Committee about 50 million plus was going to be spent, how
much money did you get back out of that 50 million?
(Mr Lewis) Chairman, we have not concluded our negotiations
with Capita at the moment at the time of this meeting taking place.
What I will commit to doing is as soon as those negotiations have
been concluded to inform you accurately as much as I can of the
figures involved.
91. Are we likely to get money back?
(Mr Lewis) Those negotiations are ongoing and I would
rather wait until they are concluded.
92. Let us continue on ILAs for a moment in
terms of the past. It was important for this Committee to make
sure that we conducted our investigation first and consequently
there has been quite a good trawling over of what went wrong in
terms of the parliamentary angle in a number of committees. Can
I just ask you in terms of what our Committee pointed to very
early on was it seemed to be a problem with a PPP, a public-private
sector partnership, and I have always personally as a politician
believed in PFIs and PPPs in principle as long as they are good
ones. You can have good ones and you can have bad ones. What our
Committee pointed out was that it centred upon what was in the
contract, who was responsible for what. If you are going to move
to an ILA mark II at any stage, whether regional or national,
what guarantee have we got that the people in the Department have
the savvy to make sure that the contract is right and everyone
understands who is responsible for what bit of it?
(Mr Lewis) It is part of the answer to the question
I expect you to give to me when we announce the successor scheme.
We have to be able to satisfy yourselves and many others that
we do have the savvy if we end up in a public-private sector partnership
scenario, although there is no way of knowing that at this stage,
if we do end up in that situation that we do not repeat the mistakes
of the past. I agree entirely with the Chairman when he suggests
there is a skill issue in terms of the relationship between the
public and private sector when it comes to contracts. There is
a clarity of roles and responsibilities issue, there is the skills
of the people concerned, there are the accountability issues.
I agree with that and I agree entirely with him. The policy of
having public-private sector partnerships as a matter of principle
is often a very good thing to deliver our objectives, but getting
the design and the relationship right, not half way through or
a quarter of the way through but from day one is absolutely essential.
The lessons from ILA I are not just about the DfES and Capita
in this particular set of circumstances. I hope the lessons can
be learned and transferred across Government in terms of the public-private
sector relationship.
93. Across Government? Is the Government doing
anything about having a greater expertise and understanding of
the nature of contracts? Is that happening across government departments
or are you still going to rely on getting in the random consultancy?
You had a well-known established consultancy that came in and
advised you. That did not seem to work and your in-house expertise
was insufficient. It is alright for you to say we are doing something
about it. What structurally have you done about it to make sure
that you have got those sort of skills in the future when you
did not have them in the past?
(Mr Lewis) Can I give you several examples of that.
First of all, we are building into department central guidance
on procurement and project management the lessons we have learned
from this. We are giving seminars in terms of lessons to learn
with all the senior staff within Department and with other government
departments and also heads of internal audit and principal finance
officers in the different departments. We have written to all
DfES staff in terms of the Permanent Secretary has written to
them. We have also produced an annex to the Treasury's annual
fraud report as part of the dissemination across Government. There
are a lot of things that we have done, but I think this is an
issue that the Government a) is determined to get right in future
and b) recognises that it needs to learn the lessons from this
situation in terms of future public-private sector partnership
relationships.
Mr Pollard: Will there be a pilot scheme or
will it be a full-blown national scheme when it is started? That
is the first bit. The second bit is about providers. TIT Co, Trotter's
Independent Trading, could be a provider. Are we sure that the
training will be provided?
Jonathan Shaw
94. Chandelier removal!
(Mr Lewis) I will probably get a letter from Trotter's
in the morning! The answer to your question is that of course
we have got to have as part of protecting public money in terms
of the new scheme a better arrangement in terms of licensing providers.
No question about it. We have got to get the balance between existing
organisations with track records of delivering in this area but
also it would be good to get new high-quality providers into the
market-place. There have got to be safeguards in place to ensure
that those providers meet certain standards, otherwise we should
not be contracting them, we should not be spending public money
on people who are not up to those minimum standards. One of the
challenges is to identify what those minimum standards ought to
be. On the question of will it be a full-blown scheme or will
it be a pilot, I am not being evasive but the intention is for
a comprehensive statement on what the ILA II scheme will look
like. That might involve both a national scheme and we might,
in some of the areas I have referred to today, talk about piloting
on particular issues. We have talked about regional and we have
talked about sectors so it might be a combination of the two.
95. This Success for All strategy which
was published in November 2002 has got a series of milestones
in it. From what you have told us next June will be an important
milestone for the Department. Is that right in terms of the National
Skills Strategy.
(Mr Lewis) I expect so.
96. You expect so? You will have to unless you
want the Chairman back locking you in cupboards.
(Mr Lewis) It is for the Committee to decide whether
it will be an important milestone, but it will be published in
June of this year.
Jonathan Shaw: The reason I am saying this,
Chairman, is that there is a whole series of important milestones
listed on pages 48 and 49 and there is no entry for June 2003
where I would expect to see National Skills Strategy. Is that
a fair point?
Chairman
97. Is it a Freudian slip?
(Mr Lewis) I think I have gone on the record so many
times in advance in this Committee saying this will be published
in June of next year, the fact it is not in this document is an
omission—
Jonathan Shaw
98. It is an omission. We can pencil it in ourselves?
(Mr Lewis) Apparently it is mentioned in the text
even though it is not mentioned in the purple milestone bits.
So it is an omission in the milestones.
99. Just to wind up, Minister, and we are very
grateful that you have given us this amount of time, in terms
of one of the slight feelings of unease we have, and Jonathan
has come back to it in terms of this not been down as a milestone,
we are seriously concerned. I recently met and spoke on the Conference
of University Vocational Awards Scheme and what seemed to come
out of their conference was this inability of the Government to
seamlessly see this vocational strand coming right through the
early years. I certainly do not want to see young people leaving
school at 14, I share your view on that, but seamlessly going
through those vocational opportunities with parity of esteem coming
through, crucially keeping people in the education system 16-18
and then into higher education because there is a lot of vocational
education in higher education already, and it will expand especially
when we know that 40% of higher education is driven locally by
the FE sector. What concerns us is the delay. This is why we are
uncertain about your June date. Only this morning we pick up the
newspapers to find that the 14-19 paper—and the Green Paper
has been out for a long time—is yet again delayed. Do you
not think that is a very damaging announcement? Could you tell
us why the 14-19 White Paper has been delayed?
(Mr Lewis) In view of the national debate which has
quite rightly ensued about A-levels following what happened in
the summer and in view of the fact that Tomlinson II is still
to report. It is very, very important that the 14-19 vision reflects
Tomlinson's recommendations and again, we would be rightly accused
of incoherence if we published our 14-19 response to that consultation,
because it is a vision and not just a response to consultation,
how 14-19 is going to look over the next ten years and building
blocks along the way, we felt it was appropriate to wait for Tomlinson's
report on A-levels so that in January we can come with a credible
vision that makes sense. In a sense, on the one hand we are accused
of rushing decisions and incoherence and on the other we are accused
of delay. What do people want on HE and 14-19? They want us to
get it right. What is the time delay involved? Is it a year, two
years, ten years? It is a few months. The same with the Individual
Learning Accounts successor scheme, I think it is worth taking
those few months to ensure that when we make those announcements
when we have considered the policies properly, you can see a sensible
cohesion and coherence to the policies. You said we needed life-long
learning coherence from the early years all the way through to
old age, and I think that is what we are seeking to achieve, putting
in place the building blocks to give us that coherence.
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