Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 20-39)

DEPARTMENT FOR EDUCATION AND SKILLS, LEARNING AND SKILLS COUNCIL AND UFI/LEARNDIRECT

21 NOVEMBER 2005

  Q20  Sarah McCarthy-Fry: You seem to be going down two routes here. We seem to have a focus on the people who have very poor literacy and numeracy, but also we have a focus on trying to do the skills for business. To me they are two totally different paths. Which one did you expect learndirect to do? Did you expect them to do both or was focusing on the business a way of getting the funding for the literacy and numeracy?

  Ms Pember: We expected them first to make themselves into a credible business with a reputation that people would want to take up opportunities and that they were able to hold their own within the education world, which they have done. At the same time we do want them, now they are a mature business, to work with industry so that we can draw in new income and full fees, which is part of the same story that we are doing with the rest of the FE world. We are now focusing our attention on making sure that their activities are helping implement the national targets and drawing in new income.

  Q21  Sarah McCarthy-Fry: But did you not think that the sort of people who were going to access getting the literacy and numeracy, the really initial building block, were not the sort of people who were interested in whether it was good business or not, but rather that it was the sort of business that was going to encourage them to go and learn these things, particularly with adults, where there is a huge stigma attached to saying that you cannot read or write or fill in a form or add up.

  Ms Pember: You are right, but they are not two priorities that cannot work hand in hand. For some of the businesses that learndirect are already working with, it is the literacy and numeracy diagnostic assessment and the online literacy and support that those employers are interested in and we think over time will begin to want to pay for.

  Q22  Sarah McCarthy-Fry: Can I turn to you, Ms Jones? Again, coming back to the original set-up of learndirect, the Department wanted you to do something that nobody else was providing, so obviously it wanted you to be innovative. How did you go about trying to get that? What research did you do to find what would work and what would not, or has it been trial and error as you have gone along?

  Ms Jones: It has been partly both. Part of innovation is to try some things, to take some risks and then quickly analyse whether they are having success or not. There was a lot of research done in terms of what was turning learners off and that is why some of the bite-sized theory behind the size and shape of the learning, the fact that it is quite private learning for people who had previously been embarrassed in the traditional classroom environment, appeals to them, and also the flexibility. It is any time, it is any place and any pace, so it is very attractive to shift workers, it is attractive to people who have care obligations so they cannot regularly commit to turning up, let us say, at six o'clock on a Wednesday evening for a night school type of course. That approach was tested and found to be very successful. Also, in terms of looking at businesses, some of the barriers to SMEs investing in training (and about 59% of SMEs do not do any training at all) are things like costs, time away from the desk, travel expenditure, etc, that goes on around the learning, so the fact that we can deliver learning to people in the workplace is seen as an attractive thing. What we have clearly got to do is go in there and exploit the success criteria that we have got.

  Q23  Sarah McCarthy-Fry: In this innovation you have been trying to do, if you could go back and do it again is there anything you would differently, knowing what you know now?

  Ms Jones: That is an interesting question. I think part of innovation is always trying things, so there are some things that were tried that did not work but I think the skill of this organisation has been to spot very quickly those issues and move on. The area that we did not get right and we moved away from is the SMEs and the large employer market, and now is the time to move back to that and try and exploit it successfully because clearly we have failed to do that so far.

  Q24  Sarah McCarthy-Fry: If you are going to get the large employers, the SME market in there, surely the first thing you are going to have to do is find out what they want. Were you perhaps trying to sell them a product they did not want?

  Ms Jones: Yes, we were part of the portfolio was confused so there was a big overlap in mixture between what was free and publicly funded and what they had to pay for, so it was difficult to make the sale. Also, it was designed more for the individual and the individual progressing and not for the organisation and what the organisation needs, so we have got to listen to organisations. I think it is very helpful with the sector skills councils now because we have got a conduit there so that we can really listen hard and build a product portfolio around what the needs of business are.

  Q25  Sarah McCarthy-Fry: Are you intending to restructure your organisation to do that?

  Ms Jones: We already have restructured it. The restructuring took place over August and September of this year, so we have a focused business development activity now which is targeting the business market.

  Q26  Sarah McCarthy-Fry: This is a question that I am struggling with. A lot of your stuff is online. If we go to basic literacy and numeracy, if people are struggling with that they are unlikely to be able to use a computer. How do you deal with that?

  Ms Jones: They wear headphones, so even though the words are on the computer there is a voice-over.

  Q27  Sarah McCarthy-Fry: On the innovation bit can I come to Ms Pember and Mr Haysom? Presumably you want learndirect to continue to be innovative. Innovation, as we have heard from Ms Jones, means that if you are going to try things out sometimes they go wrong. How are you going to help them to continue to innovate?

  Mr Haysom: You are absolutely right. It is terribly difficult to maintain the right kind of culture of innovation as an organisation matures 1-1 and it has now reached that point of maturity. An awful lot of it comes down to us being very clear about what we want learndirect to do and having the right kind of relationship with Sarah and her team to be able to allow that. The fact that we both come from the private sector, Sarah and I, is probably helpful here and so we can talk the same language about that. Yes, you are right. It is very important to try and create the right kind of culture. It is not just about money. In fact, money is usually the least of it. I hope Sarah will agree. It is more about just having the right kind of mindset within the organisation and being prepared to take some of those risks that have got learndirect to where it is today.

  Ms Jones: We are still innovating. We are not at the end of the innovation process and our innovations are about improving our efficiency in the organisation. For example, we have just in-sourced the IT and that will save us, ongoing, a million pounds per annum as we go. We innovate in the way that we offer our service so that we are better able to bridge the gap on the rural need and what we can afford to do. There are things such as we are innovating on how we provide learndirect into prisons, which is a new area, where still internet access is often prohibited, how we can get ourselves there. We are constantly innovating. As Mr Haysom said, it does not take budget to do that. It takes a skill set and a mindset about looking for the opportunities and working together.

  Ms Pember: That is where I think one of the roles the Department can offer is making sure that when new things come up we are the voice and champion of learndirect and that we are able to say, as we do with offender learning, that that is a solution that is already there, that they can pilot and work with offenders, but also to make available the capacity so that their core funding is not at risk. When we have got something new, like something that we called My Guide, which is a new tool to help people who have learning difficulties and disabilities to access the net. That was a new pilot project and what we have done is funded learndirect separately to take that on because it is a new project with new risks attached to it. It is the same for having advice and guidance in every town in the country and in the skill strategy we have marked that up as a new venture. Again we have funded learndirect separately for that because there is a risk attached to it and we need them to carry on with their core business on the one hand, but on the other hand we need them to do this innovative work maybe in a different way.

  Q28  Kitty Ussher: Ms Jones, what is your PSA target?

  Ms Jones: Skills for Life and this year we are contributing on contract 29,000 Skills for Life first test passes but we actually think we are going to exceed that, more to the tune of about 40,000 Skills for Life first test passes in this academic year.

  Q29  Kitty Ussher: And that is your main overall target. Skills for Life is basic literacy and numeracy, is it?

  Ms Jones: Yes.

  Q30  Kitty Ussher: Ms Pember, are there any other PSA targets that the University for Industry is involved in?

  Ms Pember: Not at this moment because, as I said, over the last few years we have changed the priority. It was getting people in in the first round and then Skills for Life, so that they worked more towards a qualification. And now, as we put more focus on Level 2, we will be looking to learndirect to raise their profile in that area of work, but it was not their first priority. The first priority was getting people in. We have to balance getting people in who have never done any learning before against the need to get people moved on quite quickly to get a Level 2 qualification.

  Q31  Kitty Ussher: Correct me if I am wrong. I do not know if this is an interest I should declare, Chairman, but I was privileged to be working for the Labour Party in the run-up to 1997 and I remember where this idea came from, the University for Industry, and it was very much about skills in the workplace; it was very much about raising Britain's productivity levels. I have to admit I have not been involved in the policy since then but I come here and ask you what your PSA targets are and it is worthy but entirely different. I do not know whether the Department can comment on what has happened in these few years.

  Ms Pember: As Sarah has already explained, the emphasis was put on the person, not the employer, but the majority of people who take up learndirect activity are in some form of employment. If you went, say, to Bluewater, the shopping centre, there is a learndirect centre there which is really well used by the workers at Bluewater, but if you went to one of the shops there they might not know their own employees were doing that activity. It is still work focused and many centres are in employers' premises or on trading estates within a geographical area but it is focused on the individual being motivated to go in and do something that was about their learning. I still say it is first round stuff. It helps their work chances but it is individual-led, not employer-led.

  Q32  Kitty Ussher: In terms of your Department more broadly, you obviously set PSA targets to do with productivity, broadly defined here as a macro-economic concept.

  Ms Pember: Yes, which are the participation in HE , the Basic Skills one and the Level 2 at 19.

  Q33  Kitty Ussher: Which is the same as yours, Mr Haysom, presumably. As your Department is negotiating for the next spending round, which obviously is linked to the next round of PSA targets, Ms Pember, what contribution would you say learndirect should be able to contribute?

  Ms Pember: We have to agree new policies but I think learndirect has already started re-aligning its business towards the Level 2 activity and I think that will be something we will be looking to them for. The other thing is that this is an online organisation and running along with the innovation of learndirect we have had to have QCA matching that with online testing. At the moment we really only have online testing in literacy and numeracy, so there is some more work to be done to make sure the assessment methods that we use are as innovative as the way we are training these people.

  Q34  Kitty Ussher: Would you agree that the potential is enormous? Of the top of my head we have got about 27 million people in work and you are touching half a million people a year, which is 2% or so, so over five or six years you could have an enormous effect on the overall prosperity of our country if we get this right. Will you be able to quantify that? Will you be able to have targets that affect Britain's GDP?

  Ms Pember: That is exactly the type of work we want to do with learndirect and the Learning and Skills Council leading up to the Spending Review 2007.

  Q35  Kitty Ussher: Will those targets be publicly available?

  Ms Pember: On the type of information. The Government has to decide at the time what the targets will be.

  Mr Haysom: It is worth noting that this is recent focus on Skills for Life and Level 2. It is only from last year effectively so it is a very recent change and the fact that Ufi I can help to deliver so well the Skills for Life agenda is a very positive sign and we will be looking to build on that.

  Q36  Kitty Ussher: For sure; I do not dispute that in any way. I am just thinking of the potential to make our country richer as a result of the work you are doing. I look forward to hearing more about that. Could you describe for me what an employer should do if they identify a skills gap in their workforce and they think you might be able to fill that gap?

  Ms Jones: We reach out to employers and try and engage them. Also, if they identify a need themselves then hopefully through the brand awareness which we will be addressing and improving they will know to come to us and they can either go to a learning centre or we are developing relationships with other key partners and brokers so that they can signpost them on. For example, a lot of small businesses have their trusted adviser, whether it is their accountant or the Small Business Service or whatever, so it is very important that those people know what learndirect has in its toolbag and how it can be of help to a business going forward. That is one of the key areas that we have failed to address in the past and we need to improve on.

  Q37  Kitty Ussher: How customised can you be?

  Ms Jones: With the SME market it is a matter of breaking it down into the more standardised chunks that we know a business wants, so a lot of that is around compliance training for legislation. For large employers we have done some bespoke work. Barclays is the case in the Report where we focused on what their specific training need was for their employees and we have developed a product portfolio around that but, obviously, that involves investment and the large employer needs to be prepared to pay for the investment because that is not something that we would use public funds for. It is the reason why we have got two separate organisations, limited companies, within the business, so that any investment which is private sector is ring-fenced and dealt with and kept well away from any public monies.

  Q38  Kitty Ussher: But surely each company has very specific training needs. Will you be able to operate a bespoke product? Are you going to find out where the gaps are for that product?

  Ms Jones: In which market? In the SMEs or large companies?

  Q39  Kitty Ussher: SMEs particularly but either. How flexible can you be?

  Ms Jones: We are always looking for the right products to fit business need but are we going to design a product for a very small business on a particular high street? No. We are going to look for generic products which have got several purchasers across the SME market. The SME market itself is fairly fragmented so we can target things and be specific. Our market research needs to look at that and find where the demand is and invest in those products where we can fill gaps. Working through the sector skills councils could be useful in those areas because they are the ones who know what is needed in their sector.


 
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