Examination of Witnesses (Questions 1-19)
DEPARTMENT FOR
EDUCATION AND
SKILLS, LEARNING
AND SKILLS
COUNCIL AND
UFI/LEARNDIRECT
21 NOVEMBER 2005
Q1 Chairman: Good afternoon. Welcome
to the Public Accounts Committee where today we are considering
the Comptroller and Auditor General's Report on Extending access
to learning through technology: Ufi and learndirect. We welcome
Sarah Jones, the Chief Executive of Ufi/learndirect, Mark Haysom,
who is Chief Executive of the Learning and Skills Council, Susan
Pember, who is Director of Further Education and the Learning
and Skills Performance Group of the Department for Education and
Skills, and also Mr Pablo Lloyd, who is Deputy Chief Executive
of Ufi/learndirect. Can I direct my early questioning to you,
Ms Jones? If you would please look at page 26, paragraph 2.26,
you will see that you were set up in 1998, by 2005 you had spent
the best part of a billion pounds, £930 million, but only
37% of employers know about your business services. How can this
be value for money?
Ms Jones: In the five years that
the network has been running we have been focusing very hard on
building the public funded side of the business. We have had 1.7
million learners and delivered four million courses on that side
of the business. We have generated brand awareness of 74%. The
brand awareness is also at 71% in SMEs but when we actually look
at the awareness of learndirect business, which is a specific
offering we have, it falls away to 37%. We clearly recognise that
now, as we start to mature our organisation, we have a lot more
to do in addressing the needs of the SME market.
Q2 Chairman: I would have thought
this was a fairly key result because this is potentially a very
useful service to business, is it not?
Ms Jones: Yes, it is.
Q3 Chairman: It does not really say
much about your profile, spending £930 million if 37% of
businesses do not know how you can help them.
Ms Jones: Our general profile,
the brand awareness of learndirect, is good within SMEs. It is
71%. It is the specific offering of what we can offer to their
organisation that needs addressing. We have been focused on developing
individuals and how individuals might progress and work. We have
not been focused on how an organisation needs to develop so, for
example, we have not been offering compliance training and that
is something SMEs want and is something we want to address.
Q4 Chairman: Let us now look at whether
people are getting something out of these courses. If you look
at page 34, "Achievements and course completions by learners
are increasing", there are some figures at paragraph 3.14,
figure 23, and what these show is that only 50%, roughly half,
of learners achieve their objectives per course. Why is that?
This is an objective, by the way, that they have set themselves
and only half of your learners achieve their objectives.
Ms Jones: I believe that is down
to data entry because we do not track and monitor specifically
on outcomes achievement. What we track is the completions and
the completion rate is above 70%. We have got a stated record
of 50% of people who achieve their outcomes.
Q5 Chairman: Perhaps the National
Audit Office might comment on that because, if you look at paragraph
3.14 and look at the figure, you have got a clear phrase there
that says, "over 50% achieved their objectives in 2004-05".
Ms Hands: That is according to
the evidence that is available, yes.
Q6 Chairman: That is perfectly clear,
is it not? We seem to be getting a slightly different message
from Ms Jones.
Ms Jones: No, I am not disputing
the fact that there is evidence there of 50%. What I am saying
is that an individual might complete their course; that is the
70% figure. Their personal outcome might be, for example, if it
is an Excel spreadsheet course, to use pivot tables and what we
have not got is a stated record of whether they personally achieved
their outcome, but they passed the course and that is the 70%
figure.
Q7 Chairman: If you look above there
to the top of page 35, it says, "In 2004-05, over 50% of
learners achieved their objectives, and the percentage varies
regionally from 47 to 70%". That is a huge variation, is
it not?
Ms Jones: It is a variation but
again it depends on whether tutors are noting those facts down.
What we have got there is just the evidence that is recorded on
the system.
Q8 Chairman: Let us look in a bit
more detail at what people are achieving. If you now look at page
39, paragraph 3.26, you will see that only 9% of learndirect learners
below Level 2 gained a full Level 2 qualification after two years.
Why is that? It does not look very good to me.
Ms Jones: Because part of learndirect's
offering is not just focused on qualifications. What we have got
is 81% of our learners reporting that they have a positive outcome
in work and improved job prospects. We have got over 46%, I believe
the figure is, of people who go on to a form of higher learning,
and then we have got 9% who progress to full Level 2.
Q9 Chairman: As with all these things,
we can choose any statistic we want to. There is no point me giving
you a statistic and you coming out with another one. I was asking
specifically about this. It says there in paragraph 3.26, "A
recent survey that tracked people for up to two years after their
initial contact with learndirect indicated that 9% of learndirect
learners qualified below Level 2 gained a full Level 2 qualification
over the two years." That is there in the Report.
Ms Jones: Yes, and we have objectives
through to—
Q10 Chairman: It is very low, is
it not?
Ms Jones: We have objectives to
improve on that figure.
Q11 Chairman: Okay. Let us look at
your organisation and your management of it, please. If you look
at page 44, paragraph 4.7, how can you be efficient, Ms Jones,
if 30% of your money is spent on overheads? That is very high,
is it not? You would expect an organisation like you to be spending
perhaps 10-15%. You are spending 30% on your overheads, bearing
in mind that this is an organisation which has spent £930
million of our money from 1998 to 2005 and 37% of employers do
not apparently know about what you do for them.
Ms Jones: And we are doing a lot
to get that figure down. In 2004-05 the original budget was not
to spend £54 million, as is recorded here, but actually to
spend £64 million, so we took £10 million out in year,
so that was a saving. This year our budgeted overheads for management
and marketing are £44 million, so it has dropped substantially,
and next year they will drop substantially again.
Q12 Chairman: You would expect people
in rural areas to get a lot of benefit for this. This was presumably
designed for them, but if you look at page 28, paragraph 2.30,
you will see that people in rural areas that are disadvantaged
learners, although they should be able to get just as good access
as others, apparently do not. Why cannot you guarantee this service
to people in rural areas, although I appreciate that it is always
going to be more difficult in rural areas?
Ms Jones: Our services are geared
towards the low skilled population, so we focus on providing to
them wherever they are located. Connectivity across the UK is
not an issue. 99.6% of the UK is now covered by broadband, so
we can reach people. The issue is the costs of delivery in certain
areas where there is low population density. The beauty of e-learning
is that it is not necessarily that we need the centres there;
we need the method of the outreach to reach the person with the
low skill need.
Q13 Chairman: Again, you would have
thought that if this was an organisation that was useful for business
it would be generating a commercial income. If you look at page
48, paragraph 4.19, you will see that you have generated an appallingly
low commercial income, £12 million. Why is that?
Ms Jones: I agree it is a low
figure and, as I said earlier, when the business was set up our
focus was on sorting out the public funding policy side of the
business. Now is the time for us to—
Q14 Chairman: But what, Ms Jones,
does business think of this service if they are not prepared to
pay for it?
Ms Jones: We have actually had
an awful lot of interaction with businesses. If we look at the
SME sector, over 180,000 SMEs have had dealings with learndirect
in the five years, and if you put it in comparison terms the British
Chamber of Commerce has a membership of 135,000, so we are reaching
a lot. We are not reaching enough and we are not generating the
income, but we have got plans in hand to change that. We have
got very stretching objectives. By the year 2010 we want to be
achieving £40 million per annum turnover from the sector.
Q15 Chairman: Ms Pember, on behalf
of the Department, I think it is a classic case of an organisation
which is spending a lot of money with not as much effect as you
might expect because it is too complex. You have got the private
sector with a finger in the pie, you have got your Department
with a finger in the pie, you have got learndirect. It might have
been easier to give the money direct to the colleges to get on
with it.
Ms Pember: When we are looking
at those figures in the way you have just described it, you have
one version, but when you think that there are 500,000 people
attending learndirect centres every year, and when you think that
this was a start-up company back in 1998 and where it has got
to now, there is another story to tell there. Sarah was right:
the objectives given to them were early objectives. Yes, it was
to go into business but it was also to widen participation, it
was also to get people into learning who did not normally attend
colleges, and in that way it has been extremely successful.
Q16 Chairman: You say that, but if
you now look at page 24, paragraph 2.15, it says there, "There
is a widespread view that learndirect materials could be more
widely exploited", so it seems that the rest of the education
sector, for example, schools and colleges, could be making better
use of learndirect's courses, could it not?
Ms Pember: I think that is perfectly
right and they have built up a reputation now where colleges and
schools are saying, "Those materials are really good. Can
we not have them converted to things that we want to do?"
If you had done that six years ago, if you had gone to an FE college
six years ago and said, "But learndirect is coming on stream",
there was no history to say that these products were going to
be good, so again I think you can see the contribution that learndirect
has made to online learning. People did not have that confidence
in this CD-ROM type of learning six years ago but they do now.
The Department has been working with Sarah's staff to make sure
that they have access to our schools colleagues so that if there
are benefits that we can transfer from adult materials to materials
for young people we do that.
Q17 Chairman: Lastly, I was going
to ask a question about this breach of internal controls on page
19, paragraph 1.24. Perhaps Mr Haysom can help with that because
you have been investigating a breach of internal controls. Perhaps
you would give an assurance to the committee that you are managing
this risk, that learndirect centres "may falsely create learner
activity".
Mr Haysom: Yes, I can confirm
that we are working very closely with Ufi on this matter and that
we were pleased that it was Ufi that identified some of these
issues and that we are on top of it between us.
Q18 Chairman: It is quite serious,
is it not? Have the police not been brought in as well?
Mr Haysom: This is a separate
matter. I do not have the absolute detail on this other than to
say that because it is a police matter it is not something that
we are in a position to comment on at this stage.
Chairman: It is a separate matter; I
apologise. Thank you very much.
Q19 Sarah McCarthy-Fry: If I can
address first of all Ms Pember, right at the start of the NAO
Report it highlights the problem of the skills gap in the UK on
page 13. It says, "The relatively low level of skills in
the UK's workforce contributes to relatively low productivity".
Presumably that was the reason that learndirect was set up. How
are you measuring whether you have achieved that objective?
Ms Pember: You are right. Learndirect
was set up originally to widen participation and to get people
into learning who had been turned off learning and, as I said,
it has been successful in doing that. How are we measuring that?
We are measuring it by helping people to take up learning opportunities.
After the first three years we asked learndirect to re-look at
the way they were focusing their energy and they are now one of
the best skills-for-life deliverers that we have in the country,
with last year over 30,000 people getting one of their first certificates
in literacy or numeracy. That is something new for learndirect.
Up until then they were asked to be non-qualification led and
now they are qualification-led. We are looking at it from participation
numbers, we are looking at it from service evaluation and now
we are looking at it on how many people pass an examination.
| 
