Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 1-19)


2 MARCH 2005

  Q1 Chairman: Good afternoon. Welcome to the Committee of Public Accounts where today we are taking Northern Ireland business because of the suspension of the Assembly and we are looking at Northern Ireland Department for Employment and Learning and the Jobskills programme and we are joined by Mr Will Haire, who is the Permanent Secretary. Would you like to introduce your two colleagues?

  Mr Haire: Thank you very much, Chairman. May I introduce Heather Stevens, Head of the Skills and Industry Division and Tom Scott, Head of the Corporate Services Division.

  Q2 Chairman: Thank you, you are all very welcome. I will start with a general question so that you can prepare yourself gently in, Mr Haire. Can you look at paragraph 1.12 on page 18 of the Comptroller and Auditor General's Report. You will see there it is a large training scheme and that £500 million has been spent on it to date. How satisfied are you that this programme is delivering value for money?

  Mr Haire: As the Report emphasises, this scheme has been able to produce good results in relation to strategic objectives. It has provided vocational education to a large number of young people and made sure that we have been able to fulfil the Government's pledge of a training place for all 16 and 17-year-olds. 80% of the young people who are engaged in this scheme come to us with no qualifications which employers recognise. They will have at most one or two GSCEs at levels D to G and the scheme does produce for them vocational qualifications. They come out with a strong range and the achievement and the participation rate is comparable and higher in some areas than that of Great Britain. However, on value for money I am not satisfied in the fact that, as the Report also emphasises and as our recent statistics would indicate, in a quarter of cases the training organisations inspected are seen to have more weaknesses than strengths, and that clearly is the key area where value for money—

  Q3 Chairman: I will stop you there, if I may, and we will now look at some of those weaknesses so we can find ways of trying to improve this scheme. If you look at page 36, paragraph 2.36, you will see there that on inspection results it is possible that one in three trainees currently on Jobskills—that is some 4,000 young people—are in an organisation or occupational area where the quality of training is below standard. How do you justify this astonishing statistic, Mr Haire?

  Mr Haire: Clearly that is what the regular inspections are telling us now about those areas. Our most recent work has indicated that from the time of this Report we have looked at the inspection reports and seen an encouraging move. We are seeing in 25% of vocational areas; in 1% there was a grade four, which is significant weaknesses; and in 24% there were weaknesses over strengths. The clear point is we now are working—

  Q4 Chairman: Have you informed the Committee of these latest statistics?

  Mr Haire: No, I am sorry .[1]

  Q5 Chairman: We deprecate Permanent Secretaries who come to Committee with recent information that has not been given to the Committee. The whole point of our work is based on the Comptroller and Auditor General's Report.

  Mr Haire: I apologise. The key point is that we are working through the quality improvement systems and other systems with these organisations to ensure that we improve in these processes. Organisations judged in this way have to produce improvement reports rapidly for the Department. They are inspected in another 18-24 months and they have to ensure that improvement is gained. We have also put in place an improvement system similar to the systems used in Great Britain, the quality improvement system, where organisations are working through and improving their approaches to training. So while there are organisations with those weaknesses we are seeking to improve those as best we can.[2]

  Q6 Chairman: Anyway, we know that a significant number of young people now are receiving a quality of training which is below standard. Let us look at how they progress through their training. If you look at page 46 and paragraph 3.22 that paragraph deals with youngsters with particular disadvantages. It says there that on average only 40% of Access trainees actually do progress and the rate has been falling for some years. That is figure 9B. This is obviously rather disturbing as these are some of the people with the greatest problems. What are you doing about that?

  Mr Haire: As the Report notes, in this area we put in a pilot programme to try and deal with these young people to give them, many of whom face significant personal and social problems, training where training in the NVQ style has not been beneficial to them. We have put in a pilot initially in four organisations and now in 13 organisations. In our interim evaluation that has seen significant improvement with 65% of those young people seeing progression, to a positive outcome[3], the inspectorate is advising us. That will be fully evaluated this autumn and our hope therefore is out of that next year we can spread that across the entire system. We have a new system trying to look at that area.

  Q7 Chairman: Here we have a scheme where the quality of training is often inadequate, we have a scheme where people are not progressing adequately; now let us look at premature leavers. If you look at page 21, paragraph 34, it tells us there that around 50% of trainees leave early, including some 10% departing within the first four weeks. So why has this been happening and what are you doing to tackle it?

  Mr Haire: These young people are picked up by our careers service and reintegrated into the system as soon as possible. The head of our careers service is optimistic that up to 90% of young people will be reintegrated back into the system and will get back into that process.

  Q8 Chairman: But not into the Jobskills programme?

  Mr Haire: Into the Jobskills programme.

  Q9 Chairman: So they are coming and going, are they?

  Mr Haire: About 10% of young people take time to settle into our system.

  Q10 Chairman: It says around half of them leave early.

  Mr Haire: Sorry, there is another group of people who do leave early, they do not complete their course. Often they will be working with employers and some of them will leave early for employment, so they are not fulfilling the qualification, which is obviously the ideal that we would like to see achieved, but they are getting into employment.

  Q11 Chairman: That is the third point. The quality of training is low, their progression in training is not very good, and they are leaving early. Let's look at the next point, shall we. Page 70, paragraph 4.1, says that many Jobskills participants who leave the programme do not use the skills they have learned. 29% do not use the skills learned at all, almost half of all trainees are no longer active in the occupational area for which they trained. The Audit Office here estimates a potential skills mis-match of some 36%. So you are giving them the wrong training, are you not?

  Mr Haire: This survey at the external evaluation[4] carried out for us before indicated that 81% of the young people thought that they had been helped into employment by this training. Undoubtedly there are a number of young people, particularly those in the lower skilled areas where they are getting rather general skills where they are not necessarily going into the particular trade where they started. That is clearly one of the key features of the training. With the key skills we are trying to give them literacy and numeracy skills so that they can broadly get into employment. As the figure in 18B indicates, the young people who are moving into modern apprenticeships—

  Q12 Chairman: I am sorry, all this is waffle. The fact is that the Report, which you have agreed here, says that 29% do not use the skills at all. This is a scheme which has cost £500 million up-to-date and a further 20% indicate they use the skills a little. This is a Report that you have agreed to, Mr Haire.

  Mr Haire: That is undoubtedly what the survey of 400 young people did indicate as an issue. Since this time we have also emphasised strongly that two-thirds of young people are in our priority skills areas—construction, engineering, et cetera—and since this time there has been a strong flow towards those areas. With unemployment now at 10.6% in Northern Ireland, pretty much the same as the GB level, we are seeing a better flow into employment.

  Q13 Chairman: Let's deal with fraud. If you look at paragraph 5.19 on page 82, that comes out with the astonishing statement that as far as you are concerned in this massive programme no frauds have been identified. That is simply not true, is it?

  Mr Haire: Sorry, no suspected frauds have been identified by our team other than the one which is reported in 5.21, except since then on Friday I received another one and I have submitted it to the police for investigation.

  Q14 Chairman: I know, Mr Haire, that there has been fraud because I have received a letter from someone dated 15 February who has written to me as Chairman of this Committee. You have got a copy of that, have you not?

  Mr Haire: I have seen a copy of that.

  Q15 Chairman: Even I know that there is fraud and it says here that over £350,000 has been recovered following financial inspection for incorrect, ineligible and unsubstantiated claims. Do you recall, or perhaps you have been told by your fellow Permanent Secretary that we looked at the Northern Ireland Sheep Premium Scheme recently? I would say that the link between that and this inquiry is that there was a weak inspection regime in Northern Ireland Departments and there is not sufficient emphasis placed on dealing with fraud. That was fraud on four legs; this is fraud on two legs.

  Mr Haire: We have a dedicated team which focuses particularly on the youth training programmes. We work closely with the Audit Office in this area.

  Q16 Chairman: You are turning a blind eye to fraud, are you not?

  Mr Haire: Sorry, I am certainly not.

  Q17 Chairman: How can you expect this Committee to believe that no frauds have been identified?

  Mr Haire: Apart from the one referred to here in 5.21 and the one I mentioned to you before on which I straightaway took all action to make sure that all the material was put together and has gone to the police, I am not aware that our team has found another fraud but these organisations are inspected thoroughly. 60% of organisations are inspected each year in systems audits.[5]

  Q18 Chairman: You know that this sort of scheme is precisely the sort of scheme that is most liable to fraud? You know the saga of Individual Learning Accounts, do you not?

  Mr Haire: Indeed, I am aware of that issue and that is why we have built up a strong system—

  Chairman: It is useless system if it has not discovered anything. Mr Trickett?

  Q19 Jon Trickett: Thank you very much. I was reflecting whether it was fraud or incompetence since there is clearly something going seriously wrong in value for money. If it is not fraud you must have an incompetent operation, must you not?

  Mr Haire: As I stressed, three-quarters of the training here is adjudged by the inspectorate to be good, some excellent. In a quarter of the cases there are weaknesses in aspects of the training, and that is clearly something that we have to, and we continue to, work on in a range of issues, not only by our use of contracts. One of the reasons we have improved significantly, may I say, in a number of areas in the last couple of years is because training organisations that fail to perform in vocational areas lose those parts of the contract, so part of the improvements come from that very strong use of the contract as is stated in the Report. We are also strengthening the support for these organisations. Some of these organisations are very small. We need those organisations because they work in inner city and urban areas, they have strong community backgrounds and they link well. We have to help them professionalise. One of the problems, and this Report and the Educational Inspectorate emphasises it, is that in small organisations a change of one or two people can destabilise those organisations so using the skills councils and using the Learning and Skills Development Agency, we have to help improve them. I believe that while, as we have indicated, this is a very important area because of the needs of these young people, we need to push up value for money. We are very aware of that issue. I do not believe—

1   Ev 13 Back

2   Ev 14 Back

3   Note by Witness: The ETI survey of the Access Pilot reported that almost 68% of pilot participants achieved a positive outcome, ie progressed to further training or employment. Back

4   Note by Witness: Training and Employment Agency, Evaluation of Jobskills, PWC, May 2000 referred to in the NIAO Report, paragraph 1.14. Back

5   Note by Witness: In any one year the Department's Financial Audit Support Team FAST visits 60% of training organisations and 95% of these are satisfactory. In addition there are in-built controls in the computer-based claims system, manual desks checks are carried out, and FASTs risk-based financial inspection is further supplemented by checks carried out by the Internal Audit Review team. Back

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