Select Committee on Education and Skills Minutes of Evidence

Examination of Witnesses (Questions 20-39)


31 OCTOBER 2005

  Q20  Mr Wilson: The main driver behind this seems to be to generate efficiencies as far as I can understand it. Yet, there does not seem to be a prevailing view as to whether that is going to happen. I see that PriceWaterhouse suggest that any efficiency savings would be lost for between four and nine years afterwards, although the Association of Colleges makes the point that they think there may be the opportunity for savings. What is your view on that? Do you think there will be an opportunity for savings? Will there be efficiencies made?

  Mr Sherlock: I think in any coming together of this kind, if it is a coming together which builds on the best, in other words which looks in an objective way at who does what well and seeks to build on it, then almost certainly there would be some savings. I think that is a matter of common sense. If we take the best ICT and say "Let us build on that from the three or four organisations coming together". If we took the best HR and the best finances and so forth to build it; there will be some savings. I think the value of the PWC paper, and indeed the work that has been done subsequently by finance directors of different organisations, is to suggest that, in fact they will be rather small in proportion to the overall turnover of the organisation.

  Q21  Mr Wilson: Which brings me to my next question, what sort of size of savings do you believe can be made from this process?

  Mr Sherlock: I think the calculations are somewhere between 1-1.5%.

  Q22  Mr Wilson: So, fairly small?

  Mr Sherlock: Yes, I would say it is very small, yes.

  Q23  Mr Wilson: I do not know what the size of the budget is, what is that in pounds and pence?

  Mr Sherlock: Our budget is £26.5million, Ofsted's is £200 million or so. CSCI is about £6.5 million, I understand. Let us say that the initial aggregate is somewhere around the £230 million mark so we are talking about a relatively small proportion. £2.5 million or £3 million. They are not negligible sums of money but they are actually very small sums of money in proportion. If it takes some years to recover them and if there are real losses to the momentum of improvement and the skills strategy, the opportunities for vulnerable people coming through the training programmes that we work in, then I would suggest the game is not worth the candle.

  Q24  Mr Wilson: You would say the downside massively outweighs the upside?

  Mr Sherlock: You are suggesting the downsides considerably outweigh—

  Q25  Mr Wilson: I hope you are suggesting that, I do not want to put words in your mouth.

  Mr Sherlock: Yes, I would agree with that proposition. I believe that for the proposition that is on the table at the moment, the disadvantages heavily out weigh the advantages.

  Q26  Mr Marsden: I want to come back to this question of what you say and what you gain from any changes. David, how much of your current work, roughly would you say, is spent assessing non DfES-funded training?

  Mr Sherlock: 20% is spent on DWP training, about another 6-7% is on privately commissioned work. What we want to get at is that £20 billion, if it is £20 billion that the TUC and CBI say is spent on training in the private sector. I think we would see the real win for the skills strategy as forging a real partnership between privately funded training provided by employers largely supporting their own staff, and indeed the kind of training that people pay for themselves, bringing that into the ambit of the skills strategy.

  Q27  Mr Marsden: It is just under a third of what you are currently doing. If I am putting words in your mouth, then please disabuse me, the implication of what you are saying is that if this amalgamation went ahead without the ring fencing that we have talked about, the ability to pick up on that business, if I can put it that way, would be vastly reduced?

  Mr Sherlock: Certainly, the indications from the focus groups are that employers will be willing to commission work that adds value to their activities, as you would expect, but they are not willing to pay for regulation, again as you would you expect.

  Q28  Mr Marsden: In financial terms, the Government could lose out on that as well?

  Mr Sherlock: I believe so.

  Q29  Mr Marsden: Can I ask you a final question, relating to this question of what might happen, the Association of Colleges said in their submission that they have particular concerns about the announcement that Nord Anglia would be contracted out to deliver inspections, and they would want to have reassurance about their ability to deliver inspections of adult work-based learning. You may or may not wish to comment on that but is that a legitimate question to ask?

  Mr Sherlock: I think it is a legitimate question to ask. In the new regime we have only completed two college inspections, and I think those have gone pretty well. I think the problems can be overcome. I think that where large amounts of the core business of an inspectorate are contracted out to anybody, there are problems potentially about conflicts of interest and, for example, in this particular case ALI inspects a number of Nord Anglia businesses. If the two organisations are brought together, then I think one would potentially have problems about conflicts of interest.

  Mr Marsden: We have had Nord Anglia before our Committee in a different context in the past and I am sure if this is to go ahead we would want to have them again.

  Q30  Chairman: Are you getting on all right with the Sector Skills Council? Do they appreciate you? Do they represent a new force, a new dynamic in the skills arena?

  Ms Perry: I think it is a bit variable, the Sector Skills Council, a lot of them are not very well developed yet so their ability to interact with department-attached bodies is less. We are getting on pretty well with lots of them and I think one of the interesting reasons for the turn of events is that they are beginning to commission us to do special pieces of work for them. I think that is a reasonable indication of how they feel about what we can do for them.

  Q31  Chairman: They have been reasonably supportive of you surviving as an organisation?

  Mr Sherlock: Yes, I believe so.

  Q32  Chairman: Some of them have been well-established for some time and a lot of them are very new.

  Mr Sherlock: Yes. I think there are occasions, perhaps, when we have occasion to disagree with their view on the world and I think that is probably true of the construction industry in the last few months. Nevertheless, we work, for example, with the Society of Motor Manufacturers and Traders nationally which is, I think, one of the real beacons of that kind of activity. The motor industry works together very satisfactorily having recognised—even though they are real rivals commercially—that something like 80% of their training is generic. Therefore, we work with the SMMT National Academy to quality assure their work. The same is true of the Ceramics Academy which is based in Stoke-on-Trent and I think there are huge possibilities arising out of that new dynamic, if you like, of organising things sectorially rather than by government programmes.

  Q33  Mr Chaytor: Can you just clarify what the Government has said about the division of work if this merger goes ahead? Has it been said that you will not be able to do the DWP work and private sector work under the Ofsted umbrella or is it merely indicated that this may not be your core business?

  Mr Sherlock: The position I think with DWP's work is not clear, I think we are far from clear who would inspect that.

  Q34  Mr Chaytor: It has not been said definitively that this work would not transfer into Ofsted?

  Mr Sherlock: No, it has not. I think the DWP work, as I said, is not clear to us at the moment, and it is not clear to us what the DWP's attitude to the whole consultation will be. We are aware of the views of a number officials but we are certainly not aware of the official stand from DWP. We understand that the new body will be allowed to do commissioned work but we also understand it will not be able to indulge in activities which are about quality improvement. Certainly the attitude coming through from the people who have been consulted in the focus groups is that they are not interested, as I said, in paying for just straight regulation. Why would they? They are interested in paying for something that adds value. Our view is that the proposition that people have been prepared to pay for—major government organisations like the MOD and the Home Office and so forth—is that unique combination between quality assessment and quality improvements offered by ALI then that work would tend to wither. That is certainly the indication and our belief is the MOD has serious anxieties about the proposition that is currently on the table.

  Q35  Mr Chaytor: There are two separate issues in this area of discussion. The first is whether ALI should be merged with Ofsted and the second is whether inspections should be separated from quality improvement. It could be perfectly possible that ALI could be merged with Ofsted and take quality improvement with it and it could equally be possible that ALI would remain separate and have quality improvement divorced. My question is, obviously you feel the preferred system is to link quality improvement with the inspection process but given the line has been put out that that is not going to be what happens, what would you propose should be the future of quality, regardless of whether or not you are merged with Ofsted?

  Mr McEnhill: It is very difficult to answer that. We passionately believe that if inspectorates do not engage in some form of quality improvement—and the definition of that can be very complex—if it does not engage then it is not exploiting its true potential.

  Q36  Mr Chaytor: That has been the position with Ofsted since it was established in the early 1990s. The national system of inspection for schools is divorced from quality improvements, it is not going to change.

  Mr McEnhill: I think it can change, we have shown that it can change, we have shown that it can work. Again, at the risk of telling you something that you know already, can I say quality improvement is not necessarily cuddling up to providers and making them feel warm and wanted, telling them how to do it; there is a whole range of activities here. There are some rather pithy comments about spreading good practice as though it happens through the ether. We have found out it does not transmit itself terribly easily from inspectorate to provider, you have got to work at it, you have got to have delivery vehicles which can enable it to work. Another of our activities is the notion of quality champions. On our own, we cannot improve the quality provision to the extent it is needed, it is the provider which provides these catalysts and we can help, in a sense, to train those catalysts to work within their providers for stimulating improvement. All of those things depend upon inspectors, practising inspectors who go in day in day out into provision and they see what is good, what is bad and what is dreadful. They start to form opinions about what is good and start to turn people's gaze towards that. That is not done in that way in Ofsted currently.

  Q37  Mr Chaytor: That is an argument for an integrated process, it is not an explanation as to how you see the future if you are not allowed to carry out that integrated function.

  Mr McEnhill: Somehow or other there would have to be a very stretched umbilical cord between the inspectorate and this quality improvement arm which is somewhere elsewhere. That sounds inefficient to me.

  Q38  Mr Chaytor: In the documentation that has been put out so far, about the implications of the merger, what has been said about quality improvement or is it just ignored?

  Mr Sherlock: It asks a rather open question in the consultation document about what would happen to ALI's quality improvement activities. I think some people have been tempted to answer, "Well, QIA should do it", the new Quality Improvement Agency, but it has already been said that QIA will not be a delivery body, it will be a body which simply commissions others so that does not seem to be a sufficient answer. I think the answer is that a lot of things that have been made to work, and as Denis says, they do not happen by themselves. The Excalibur good practice platform, for example, took us a couple of years of seriously hard work to make happen. We worked in partnership with Unipart plc for a year to learn how they did it and then built on this practice and, with the support of the Department invested an awful lot of money in making it happen. I think all of those things are likely to wither on the vine.

  Q39  Mr Chaytor: If you are confident of the success of your track record so far, why are you not confident of your ability to change the Ofsted culture post-merger?

  Mr Sherlock: I think that the dice are heavily loaded against our being able to do so in the consultation as it stands. I think if we were asking for a single thing, it would be second thoughts by the Government on that particular issue, to have thoughts about how one might get two plus two equals five, if you like, bringing together organisations to get a new organisation which is better than any of them, rather than something which is simply saying "These organisations will simply take some of their manpower and put it into Ofsted" and hoping that that works.

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