Examination of Witness (Questions 400-419)
8 NOVEMBER 2004
DR KIM
HOWELLS MP
Q400 Mr Turner: I am sure you are quite
right about that, but our job is to try and identify what rationality
exists and, among other things, who is responsible. It seems to
me that this is a relatively large sum of money that got from
spending review bid to ministerial announcement in February 2000.
We are not quite clear what the date is.
Dr Howells: I have got here, "15
February Secretary of State announces venture".
Q401 Mr Turner: 36 days into the New
Year we have got a decision. That must be a world record for the
Department for Education and Skills.
Dr Howells: If they had been any
slower you would probably have criticised them.
Q402 Mr Turner: I will draw up a list.
The question I was going to ask was, when did the department receive
the spending review bid in 1999?
Dr Howells: I do not know; I will
have to find out for you. I have got something here which might
interest you. It says, in wonderful handwriting, "The idea
came from discussions between HEFCE and senior officials based
on emerging research, not least the report The Business of
Borderless Education, funded jointly between HEFCE and UUK",
and it says in brackets "CVCP then".
Q403 Mr Turner: The Committee of Vice
Chancellors and Principals, yes.
Dr Howells: And the bid came at
the end of 1999, November or December.
Q404 Mr Turner: So a bid in November
and £60 million in February. I wish I could achieve such
success when I ask for money from someone. What concerns me is
that this decision appears to have been made on the hoof without
sufficient information. When the money was granted to HEFCE was
it a particular line in a budget hypothecated for this purpose
and, if so, what were the conditions of grant?
Dr Howells: I do not know if it
is a particular line in the budget. I can certainly try and find
out for the committee.
Mr Turner: That would be very helpful.
Q405 Chairman: Can I just say to the
civil servants that we prefer notes to conversations.
Dr Howells: Sorry; it was my fault,
Mr Chairman. I leaned back.
Q406 Mr Turner: Had the department worked
out at the time it gave the money what were the criteria for success
that it was going to measure this against?
Dr Howells: I would have thought
that when the Secretary of State made his announcement he probably
believed that it was going to be a great success and that Britain
would steal a lead on the rest of the world. If you were to ask
me would the Secretary of State have had a very specific set of
numbers in mind about how many students and so on, I doubt if
he would have. This would have been a concept which, as we know
from your deliberations, resulted in a great many risks being
taken and I think there would probably have been a great many
unknowns but there was a good deal of confidence around whether
the delivery of education in this way had a big future and, from
my sense of this committee, we still believe that this has a big
future.
Q407 Mr Turner: For many years, Minister,
well informed people were convinced that the earth was flat. That
does not answer the question. Could you find out please whether
there were—and you say you doubt it—any set criteria
for success, and could you tell me how the HEFCE grant letter
referred to this project in terms of its place in their priorities
and the strength of government support for it?
Dr Howells: Yes, I will certainly
try to find those instructions if they exist. I can tell you,
Mr Turner, that the announcement in November 2000 was that the
£62 million was to be spent between 2001 and 2004 and that
it was indeed a specific line in the budget with outline conditions.
Q408 Mr Turner: Good, and you will let
us know what the outline conditions were?
Dr Howells: I will indeed.
Q409 Chairman: How much of that £62
million do you think was actually spent?
Dr Howells: From the transcript
from this committee I think at least £50 million, and I am
told there is a £12 million residue there which is now being
used to look at the possibilities of developing other forms of
eLearning in conjunction with some specific projects.
Q410 Chairman: Minister, other colleagues
want to come in, but what Andrew was trying to probe is something
that early on, when we talked to HEFCE, came out of that discussion.
HEFCE more or less said, "Look: it was not us. It is not
the sort of thing we do. We have never done this before"
and so all the forensic evidence points to the government or a
minister saying, "This is a good idea. Do it even if you
have to do a totally different thing you have never done before".
Therefore, in a sense I am pushing back the question you pushed
at Jonathan. You said, "Give us an example that the department
has done that sort of thing before". You give me an example,
Minister, where HEFCE has ever done anything like this before.
Dr Howells: I do not think HEFCE
ever did anything like this before, but I may be wrong. I will
certainly try to find out if HEFCE did that.
Q411 Chairman: That was the evidence
they gave us, "We have never done it before", so it
did look as though the fingerprints of the Secretary of State
or someone in government at ministerial level was pushing HEFCE
to do something they were quite uncomfortable with. That came
out of the evidence.
Dr Howells: Yes, that is the sense
I got from reading the evidence to this committee as well, I must
say.
Q412 Valerie Davey: What HEFCE did have,
however, was education experience and it seems to us and from
your comments earlier that that element, the market research element,
into the product, not the process, how it was going to be delivered,
was the bit that was lacking. Is it your analysis that HEFCE went
out in a blaze to find the people who would deliver without actually
putting into the contract what they wanted delivered?
Dr Howells: That is the most fascinating
part of the interview that you had with Sir Anthony Cleaver and
John Beaumont, because there was talk of travelling around the
world and trying to understand what was out there. There was a
very interesting discussion, for example, with Mr Shaw about Portuguese,
"Did you not know that Portuguese was the language of Brazil?",
and what came across, I find anyway, was that it looked a bit
amateurish and as if it had not actually been thought through,
and also that the material which should have been provided and
could have been provided would, of course, have had at hand, backing
it, the information about language and about how students in other
countries would be capable of using this delivery system if they
did not speak English. From what I can see from the oral evidence
that was given to this committee I am not convinced that that
work had been done before the organisation was up and running.
Q413 Valerie Davey: Leaving aside the
details of the language of Brazil, the practical problems of transferring
education through e-systems was relatively well known to the Open
University, to HEFCE, via the other universities who were already
using it. What I am asking is do you know whether they used that
experience in writing the contract with their arm's length business
magnates in order to have something of value for the £60
million plus which they had at their disposal?
Dr Howells: From my own discussion
with HEFCE and from reading the transcripts of this committee
and from the briefings that I have had, I think they were very
much aware of the strengths and weaknesses of the systems that
were already out there. Remember, I think there was some discussion
about asking a university to run it. The Open University I think
was mentioned and some others too, but it was felt that if it
was going to be this big bang approach it had to be a completely
new creature. Subsequently it appears that there was not a platform,
nor indeed the software, that could have provided eLearning on
that scale. Indeed, I guess you could still argue that this is
a unique enterprise, that the platform that was created has no
parallel elsewhere.
Q414 Chairman: It is a pity it is not
being used for anything.
Dr Howells: It is. They put it
up for sale, I understand, and some of the people who bid actually
wanted to be paid to take it on. I think that indicates just how
wary people were of what I see as that central problem of a lack
of marketing.
Q415 Paul Holmes: Just going back to
your exchange with Andrew Turner, you were saying that you did
not know if the Secretary of State at the time, David Blunkett,
had any clear targets when he talked about launching this scheme.
That was February 2000, but by October 2000 PricewaterhouseCoopers
had produced a very clear plan. Initially they were saying that
by year two, 2003-04, there would be 12,600 students. Then that
plan was altered to 5,600, but in fact in total there were never
more than 900 in the entire course of the programme. There was
a very clear target which was then halved, but even that was nowhere
near reached, and all the objectives and targets that were set
from 2000 were missed—the number of courses available, the
students enrolled, the platform delivery, the lack of external
investment. Everything was missed. As you say, the appropriate
minister again, Margaret Hodge, did have six-monthly meetings.
Even though this was in the hands of HEFCE at what point then
or in a future situation like this would you expect a minister
to say, "Every target is being missed. What are we doing
about it?"?
Dr Howells: The pat answer is
to say that this is not a call for a minister; it is a call for
HEFCE.
Q416 Paul Holmes: What was the point
of the six-monthly meetings then?
Dr Howells: Certainly they wanted
updates. I would not say it was true that the Secretary of State
who made the original announcement, David Blunkett, did not have
any targets in mind. He may well have had some specific targets.
I am just saying that I do not know exactly what they were, but
certainly in David Blunkett's mind would be this HEFCE-created
creature which would be a world winner and would make sure that
the Americans did not steal a march on us. That in itself was
a pretty ambitious target, I would have thought, and specific
in its way too, because nobody had created such a company previously.
The difficulties and anomalies in this arise when you look at
the nature of that arm's length relationship that the department
or government has with an organisation like HEFCE and then its
relationship with this new creature that is created which HEFCE
has never done before and where they are very wary of being seen
as shadow directors. It is a complicated means of creating this
creature. One wonders if it could have been created in some other
way. I am not sure actually. It was an experiment, and a risky
experiment.
Q417 Paul Holmes: So, rather as with
the ILAs, presumably the government is going to learn some very
careful lessons from this to guide future projects of a similar
kind?
Dr Howells: Yes. We ignore these
kinds of objectives at our peril because, even though what emerges
will be very different from that which David Blunkett might have
envisaged back in 2000, I am pretty sure that this kind of learning
is going to increase and with it, of course, the whole issue of
the economy and jobs and the position of British universities.
Q418 Paul Holmes: You might well say
this again was down to PricewaterhouseCooper or HEFCE and the
people who were running the thing, but again it would seem to
me that the government needs to learn some lessons from this.
It has been suggested that the way the thing was structured was
that the HEFCE managers were educationalists with no practical
experience of the software side and that Sun Microsystems had
total control for a long time, a free hand in developing the software
side and that is where a lot of this went wrong, and that the
HEFCE educational managers either did not know what questions
to ask or, when they did try to ask questions, the Sun Microsystems
managers were very cavalier and said, "Keep your nose out".
Do you know anything about that?
Dr Howells: I do not know about
those "Keep your nose out" discussions. They may have
gone on at the time but I think there were some people involved
in this with a lot of experience in industry and retail and commerce
in general. I do not think that the management structure itself
can be identified as a bunch of professors who had never run anything
bar a department.
Q419 Paul Holmes: Again, it has been
suggested that part way through HEFCE did appoint a manager who
had some software development experience and when he started to
question what Sun Microsystems were doing Sun Microsystems at
one point just refused to work with him.
Dr Howells: I did not know that.
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