Examination of Witnesses (Questions 380-399)
MR MARTIN
DUNFORD AND
MR GRAHAM
HOYLE
9 JANUARY 2006
Q380 Chairman: Martin and Graham, can
I welcome you. We are very grateful that you have been able to
come before the Committee and enlighten us about the role of your
organisation. You have been listening to the evidence from some
of your colleagues from a rather different part of the sector,
who I am sure you work with on a day-to-day basis. Can I ask you,
whoever wants to take the lead, perhaps Martin, to give a thumbnail
sketch for a couple of minutes on what your organisation does
and why you exist.
Mr Dunford: Thank you, Chairman.
I am the non-executive Chairman of the Association of Learning
Providers which is a body representing about 450 providers of
learning, including about 50 FE colleges. Graham is our Chief
Executive. As I say, I am non-executive and in my day job I am
the Chief Executive of a company called the Training Business
Group which is part of the Rehab Group which is a major independent
charity based in Ireland but we are run on very commercial lines.
Just to give you an idea of what we do, there are about 40,000
enrolments a year, many of those are FE and Learn Direct, Jobcentre
Plus, and about 2,000 enrolments for young people on Entry to
Employment and apprenticeships. We work at the end of the scale
that was talked about before basically around social inclusion
and getting people back into learning and so on, hence the large
number of Learn Direct. We formed the Association of Learning
Providers in 1999 without any employees just to start lobbying
Government with the Learning and Skills Act clearly coming, at
that time trying to promote the voice of the independent learning
provider. For today we have two key issues: to try and see how
we can make better use of the independent sector in this area
and, from your point of view, to find out if your review is about
FE with a large "F" and a large "E" or a small
"f" and a small "e". I was on the Foster Review
Advisory Group and this was a big debate. It was quite clear in
the end that it was about colleges but I think Sir Andrew has
done a pretty good job of including as much as he could about
what we believe is about £800 million of the £9 billion
that is being spent at the moment through the independent sector.
Those are the two main issues for us at the moment.
Q381 Chairman: Graham, do you want
to add anything to that?
Mr Hoyle: Very little. I have
been Chief Executive for three and a half years which was when
the Association decided to take on some staff, having had a couple
of years without them. My own background was running TECs and
Business Links for a decade, and previously about 20 years in
the Employment Service, so I have got experience across the broad
area. As Martin has said, the vast majority of our members deliver
to the LSC and a very significant number deliver to Jobcentre
Plus and learndirect as well, so we do cover quite a broad canvas,
including about 50 colleges of further education.
Q382 Chairman: Do you not supply
direct to employers then?
Mr Hoyle: Yes, many of our members
will directly supply. That is not monitored as such. The common
factor is that all of our members supply to one of the government
funding agencies, all of them do that. A proportion of them will
spend a proportion of their time in direct commercial work and
that can be marginal or that can be 80% of the total. That is
as it stands as an interest factor. I was interested in some of
the earlier conversations about the CBI's 20 billion on its own.
A lot of our members will be facing in both directions and taking
government money but also taking direct commercial money from
employers.
Q383 Chairman: Who are some of your
biggest members in terms of turnover?
Mr Hoyle: The big players will
be Protocol, VT, CITB, who are well known to you, Martin's company,
TBG, is quite a large one, HCTC is another large company, and
so on, Remit.
Mr Dunford: If I can add two large
charities, Rathbone and NACRO, you may have heard of them, that
are in the Association as well.
Q384 Chairman: You have been around
since 1999 and there have been some quite serious changes even
in that short period of six years. Are you happy with the way
things are going? Are you content? Would you like to see the old
system prevail? How do you feel about where we are now?
Mr Dunford: My personal view is
the LSC have more or less started again. We have got agenda
for change, which hopefully, with the Foster review, if the
main recommendations are implemented, is basically going to start
to enact what is in the Learning and Skills Act. One of our criticisms
to Charles Clarke, Ivan Lewis and every minister we ever met was,
"why have you not implemented the Act?" The Act very
clearly states about an open market, about buying from whoever
based on quality. For whatever reason, and there are all sorts
of possibilities for that, that has not happened. It has been
very slow. However, we are where we are. As long as agenda
for change moves and some of the contestability points in
Foster are implemented, and I do not mean taking over failing
colleges, I mean looking at who is good at what and looking to
individuals and employers to see where they want to buy from,
if we get to that open market we will be content, to use your
word, but we have not been content for the last four or five years.
Mr Hoyle: Can I take that forward.
What has been missed over these last four or five years is the
opportunity to fully exploit the potential of all training providers,
whether they be independent or colleges. As Martin said, we represent
50 or so colleges, so on this occasion it is not an independent
or public sector issue. All of the organisations have been working
within a restricted area, it may be a geographical area if you
are a college, it may be unable to get a direct contract if you
are an independent provider, and what that has done is restrict
the capacity of all providers to fully exploit their skills, to
develop their skills, which is the shared agenda for us all.
Q385 Chairman: What protection does
the public have from your organisation in terms of allowing them
to understand who are the high quality providers and, to use an
expression I should not really use, who are the cowboys? What
do you do to put your imprint on it: "If you are in our organisation
no cowboys are allowed"?
Mr Dunford: It is a very competitive
market. Some studies were done a few years ago by city analysts
where people were looking at venture capital and the venture capitalists
determined that it was the highest risk market outside of oil
and mineral exploration. If you are an independent provider and
you do not deliver, both in terms of volume and equality ie end
results, you are out.
Q386 Chairman: It is the marketplace
that decides the quality?
Mr Dunford: It is not a perfect
marketplace and independent providers are a big mixture of large
PLCs, large charities to local authority departments and so on,
and certainly it has not been a pure market. If you look generally
over the years, there are about 900 contractors to the LSC currently,
(independent ones outside of colleges) and there were about 5,000
in 1992 through the TECs, there were 2,400 in about 1998. All
this is good in a way, I am not saying all of those people were
cowboys, you did get people coming together, a lot of them were
too small, and if you have an employer focus, which a number of
our members have, you are not restricted to the locality because
employers, as we have heard in the previous session, do not just
work in one place, they want to buy from who they want, maybe
20, 30, 200 miles apart.
Q387 Jeff Ennis: On the point you
have just raised, Chairman, the Department went through a phase
a few years ago where in terms of provision in the independent
sector "big was beautiful", shall we say, they were
just looking to the big independent sector providers. Have we
got away from that sort of strategy now so there is room for the
smaller providers?
Mr Dunford: I did not know there
was one.
Q388 Jeff Ennis: It is my personal
feeling because I thought that a number of independent providers
in South Yorkshire bit the dust because they were too small.
Mr Dunford: I am not sure that
was the Department's strategy. The LSCs in some areas took a very
unenlightened view of saying if you have got less than 50 trainees
you are out, rather than looking at some of the other factors
they should have looked at. It was not across the board there,
I must say, it was local and in West Yorkshire I think that was
particularly the case.
Chairman: I had better confess, I have
just realised that I was a chair of a training provider at that
time.
Mr Marsden: You were not given the chop,
were you?
Q389 Chairman: I think we were squeezed
a bit.
Mr Dunford: You might have had
51 trainees.
Chairman: For a charity.
Q390 Mr Wilson: You say that your
members were the forefront of measures to engage employers in
the training of their staff, what is your evidence for that?
Mr Dunford: It is the core business
of most of our members. Personally speaking, it is part of our
employer division within TBG and we do a lot of adult learning.
Many of our members, some of the large ones that have been listed,
that is their mission and that is what they do, they work with
employers to train their staff and get them qualified.
Q391 Mr Wilson: How hard is it to
engage companies in training their staff? Is it persuasion or
engagement?
Mr Dunford: I am glad you have
asked that because we tend to look at employers as if they are
one species, and certainly it sounded like that in the previous
session with the Sector Skills Council. They are very, very varied
both in terms of ethos, size and what they are about. You can
have a small employer who really believes in training because
of the leadership, you can have pretty large organisations that
are quite poor at it, but to answer your question generally, it
is quite hard. It is not that easy to sell to employers the benefits
of training, so you have to be quite good at it to be successful.
Q392 Mr Wilson: Why do you think
it is hard to sell the benefits of training to employers? Do you
think they do not believe that training will give any improvement
to the productivity of their staff at the end of it? Do they think
it is a day out on a jolly? What do you think is the reason behind
their thinking?
Mr Dunford: The sort of training
we sell, for example with apprenticeships, is long-term stuff,
it could be 10 months to two or three years for an individual.
One of the big fears that employers express is poaching and people
moving on. It is a constant theme that you hear. Having said that,
there are nearly a quarter of a million apprentices and there
are lots of people on employer training pilots. I am not saying
it is impossible, I am just saying it is not an easy sell. It
is one of those things that you have to convince people about.
For example, in selling anything you need proof sources, "What
is in it for me?". Maybe your staff turnover will go down,
you are asked about those sorts of things, progression. A number
of the employers that we work with see those as real benefits.
Q393 Mr Wilson: You say you use evidence
to prove that these things work. For example, on staff retention,
what sort of evidence do you use or are there other better indicators
for business to look at?
Mr Dunford: In our own organisation—I
will let Graham speak on behalf of the other members—we
try and get them to speak to other employers, that is usually
the best way of doing it because you can give evidence and they
do not have to believe you.
Mr Hoyle: Can I pick up a couple
of the issues. Going back to the initial question about why do
we believe we are capable of engaging employers. There has been
a debate for the last year or so on how to get various organisations
to engage with employers, and what is fascinating is I talk to
my members, who are somewhat bemused by the question, because
the simple answer is it's what we do. We are not doing anything
else, we engage employers and look to offer training and development
to their workforce. It is quite interesting, the concept about
how one gets best practice or how one increases employer engagement
and start putting targets against it, which has been discussed.
It is a lit fire to my members because it is what we do. In terms
of how easy it is, if I can pick that one up, there is another
element I would like to add to that. My members tell me they go
to an employer and one of the limitations, as recently as two
years ago, was they only had one product in terms of government
funding in their portfolio, which was apprenticeships. They would
walk in and talk to an employer about developing in the workforce
and they would do anything you want as long as it is apprenticeships
because the other things that were available through government
support were not available to my members because they were not
directly contracted with. That is beginning to ease out. There
is no question, there has been real movement. I come back to your
opening question, Chairman, that over the last five years there
has been a movement to make more of the Government's supported
product line available to a wider range of employers, so we can
now go in and talk about apprenticeships and skills for life,
we can look under the Employer Training Pilots, the Train for
Gain and so on. That is starting to make it much easier to sit
down and talk to employers about what can we do to bring together
a package of your money and government money for a workforce development
package. In a sense, this answers the first question, I think
we are beginning to move in the right direction.
Q394 Mr Wilson: From engagement,
what are the factors that make independent providers better able
to meet the needs of employers?
Mr Dunford: They might not be;
one of the winners of contestability will be the best colleges.
This is all about who is good at what they do and about focus.
It is why most providers, there might be some, would not want
to take over a whole college because most providers are focused
on a particular sector or common group or both. For example, if
you become an expert in hospitality, your employer/employees are
ex-chefs or silver-service waitresses and so on, you become very
linked to that employment sector. Two of our biggest members,
one is Remit only deals with motor mechanics and another one only
deals with people training to be in the electrical industry for
electrical installation, both very large organisations.
Q395 Mr Wilson: Correct me if I am
wrong: the independents do get a lot more of the work with employers
than the public sector.
Mr Dunford: I think about 80%
of apprenticeships.
Q396 Mr Wilson: Would that not suggest
that the independent providers have some secret recipe that perhaps
the public sector does not have?
Mr Dunford: I think it is Graham's
answer, which is that is what we do, that is your raison d'e®tre.
We talk about the nine billion and then employers as if that is
all going there, much of the FE spend, for example, is on A-levels,
these sixth-form colleges and general further education, as if
that is what FE has suddenly become, all about employers and the
skills, and we would say you cannot drag a horse to water. I know
a number of college principals who do not want to get involved
in apprenticeships and employer training pilots. One of our concerns
is through Foster and through answers like you got from the Chief
Executive of the SSDA, there will be a push to make colleges better
at doing this, and I am not sure there is a market failure and
a gap which exists that we need to do that.
Q397 Mr Wilson: What are the current
percentages between the independent and the public? Is it 80:20,
something of that nature?
Mr Hoyle: It depends, if you take
apprenticeships, it is about 75:25, if you take the employer training
pilots—we know that from an answer in the House in July—it
is 69:31, so it is a similar percentage there where the market
has been opened up and where we have access to it. If I can come
back to your question, what have the independents got that colleges
have not, the answer is correct, there ought to be nothing. If
you look at what you have got to have to be successful, and colleges
can have and do have this as well, they have got to have an employer
focus, which is what we do, they have got to have flexibility
that covers opening hours and terms and conditions of staff and
they have got to be fast on their feet and not necessarily be
tied to capital building. If you put those together, you can respond
very flexibly, very quickly, to immediate employer demands. Those
options are available to the independent and the public sector.
I think if you start looking at your percentages of 65:25:35,
or whatever it is, what you are finding out is how the different
sectors have utilised those strengths, and I think probably the
one word which separates many is flexibility, fast on your feet.
Q398 Mr Wilson: In your paper to
the Committee you argued that independent contractors are currently
being unfairly prevented from competing for publicly funded training,
am I correct in that?
Mr Hoyle: Correct.
Q399 Mr Wilson: Do you think Sir
Andrew Foster went far enough with his suggestion, for example,
on contestability for further education?
Mr Dunford: I was on his advisory
group and spent a lot of my time trying to convince him—it
very much was only an advisory group—that this was a key
factor. If you take a learner focus, if you look at government
rhetoric about demand-led and choice, it is the only way to go,
particularly if you focus on vocational training and employer
choice. Maybe there is a different argument for general education
around 16-year-olds, however, the short answer is probably not
far enough, but it is there. It basically says that there should
be a contestable market and a learner focus. If you have a customer
focus, it should come.
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