Examination of Witnesses (Questions 260-279)
MR DAN
WRIGHT AND
MR SIMON
WITHEY
26 MARCH 2007
Q260 Fiona Mactaggart: Who are they?
Mr Wright: I think it is still
in its infancy; there are not many that are doing it. It is difficult
for us to get under the skin of those employers and really start
to persuade them to rejig their training programmes in order to
use them as accredited qualifications. What they would say is,
"Why? What's in it for me?" Really, the attraction of
qualifications is that they are giving something to their workforce
which you can hang your hat on, and that really is the way that
we drive those in. I think there is a lot of work to be done with
employers generally in order to get them up this curve of saying
their own in-house training programmes can be accredited and they
do have a benefit to the profit and loss account, to the retention
of their people, and all the rest of it. There is a different
audience here. You have got the bigger employers much more enlightened
and ready to talk and smaller employers very difficult to persuade.
I would say also it is very difficult to hit the right level of
management as well, in employers; it is very rarely you get engaged
with the chief executive of a major company on issues such as
training; it tends to be devolved down to the HR function. It
tends to be quite a junior level you are negotiating at, and they
have great difficulty in moving this up through the management
chain.
Q261 Helen Jones: You said you would
like to see a greater role for the private sector in FE, but what
kind of FE do you envisage companies like yours taking on? You
are not going to take on the Somali women who cannot speak any
English, are you, or the people who need basic access courses?
Mr Withey: Our model for working
with the FE sector is working with the colleges, and we will bring
some industry best practice, if I can call it that, so we will
provide some of the services more cost-effectively than they would
themselves perhaps, running their own campuses, such as management,
and so on. There are things that we could do together, perhaps
bringing in third party income, and that could be Train to Gain
contracts which together we could deliver which they could not
on their own, or just standard apprenticeship programmes. Also
we can provide some investment, because if we have a long-term
relationship with a college we can take a long-term view on investing
alongside their own investment, LSC funding, into there to provide
bespoke training facilities for our other customers. I will give
an example, if I may. We are an international company, we have
a lot of customers in the Middle East and the Far East, we do
a lot of English language training, in fact, and providing cost-effective,
professional delivery vehicles for those, which meet our customers'
specific requirements, is a key issue for us. It is that type
of thing we could do together, just to give you one specific example,
if that helps.
Q262 Helen Jones: Really you would
be cherry-picking, would you not?
Mr Withey: No, not at all. I think
we would be complementing their skills. We work with the leading
colleges, we are working with four or five from the 157 Group,
also some of the medium-size coasting colleges, where, in fact,
typically their areas of weakness that I would be reporting would
be on employer engagement, where they do struggle to get local
employer engagement for their programmes and courses. It is the
sort of understanding that we have of employers' needs that we
could bring to such a relationship.
Q263 Helen Jones: That is interesting,
but, Dan, you have just told us about how difficult it is to get
SMEs engaged in training, and that is just as true, it seems to
me, for your companies as it is for the colleges. What makes you
think that you would be more successful in getting those types
of companies, which is often, the gap is in training, engaged
in training?
Mr Wright: I can speak only for
Protocol. We work very hard at building relationships right the
way across the country and we work on a database of small to medium-sized
employers and we spend a lot of time getting out there and talking
to them. In terms of our contact with those SMEs, we are pretty
good at doing that. I think, getting them fully engaged in a training
programme which requires their investment is a different matter.
Q264 Helen Jones: That was my question,
you see, because you may have the contact base but do you have
any evidence to give to the Committee that you are any more successful
in getting SMEs engaged in training than are the FE colleges,
or any other providers?
Mr Wright: Again, I can quote
Train to Gain. We know full well, and I think Simon is in the
same position, that, with the success we have had in bringing
learners onto the Train to Gain programme, we are probably the
two most successful providers in the country for doing that, simply
because we have the contacts, I have a network of people out there
talking to them all the time. To go back to the brokerage issue,
which we touched on earlier, we have not used the brokerage system
at all; we do all of that assessment with the employers and then
we refer back to the brokers, so actually it is a level of bureaucracy
we could live without.
Q265 Helen Jones: Can you give us
the figures for that? What percentage of those people on Train
to Gain comes from small and medium-size enterprises?
Mr Wright: I cannot, off the top
of my head, but I can get back to you with them.[2]
Q266 Helen Jones: If you could get
them for us, it would be very useful. Protocol say in their evidence
that, in your experience, most learners are not actively looking
for training but are referred by an employer or a friend. Again,
that seems to indicate that there is not recognition out there
of the benefits that training can have for the individual. Is
that what you are finding; when people are referred, are they
hard to convince that they should take up the training on offer?
Mr Withey: I think, in our experience,
you get all ends of the spectrum, quite frankly. You get the employer,
for a start, some of whom are very keen and some who give minimal
support to the employee, when he, or she, starts a learning programme.
Looking at the individual, I think you get the same thing, you
get some people being dragged into doing it and some who see it
as a career opportunity. Most of our trainees have done a Level
2; we do quite a lot of Level 3 as well. I guess there is a difference
by the time you get to Level 3 on that column where clearly they
do see it as a good opportunity for them. Our experience is you
can get a whole spread of attitudes.
Mr Wright: My view on that is,
if the employer is a supporter of these programmes, and generally
it is the local management which will support it when it is driven
through, these tend to be managers who have been through the programmes
themselves, if they have been on that programme, more than likely
they will endorse having their people go through it; but you have
got a very mixed bag from one site to another, it tends to be
driven locally.
Q267 Helen Jones: Leitch proposed
a much more coherent, national careers service for adults. What
are your views on that and how do you think it should work, because
he was suggesting something on the Learndirect model, I think,
was he not?
Mr Withey: Yes, indeed. We are
a large provider of career services through the Connexions partnerships
and we see quite a variety across the country. We have been hooked
up with all the London boroughs, all of the South East, some in
the Midlands, some in the North, so it is a fairly good coverage
but it is not uniform by any means. There are some similarities,
in terms of things like targets for NEETs tends to be a very,
very key requirement on our Connexions contracts, so there are
some threads going through, but actually the priorities and, if
you like, the personalisation are very different from contract-to-contract.
One of the concerns we have got going forward is, with the Connexions
contracts coming to an end, certainly by next April, and going
under the Children's Trusts and Children's Services through local
authority control, the concept of which I think is fine, I think
there are a couple of issues there. The impartiality of advice
has to be completely integral, and if some of the local authorities
deliver careers advice down at school level, and maybe college
level, I think there is a concern that it will be very local advice,
very local knowledge will be strong, but it will not get the coherent
coverage across the country. We are quite lucky to have the 20
areas that we cover.
Q268 Helen Jones: Can I stop you
there, because if people are getting advice like that in their
local area, talking there about younger people, they will not
be going to the other side of the country, will they? What they
want is advice on what is available in their local area, surely?
Mr Withey: If they wish to stay
local, yes. One of the concerns may be, if a school provides advice,
there might be an emphasis on staying on to the sixth form, for
example, which may be not the most appropriate advice to provide
for that young person; it is that type of thing. There are a large
number of national employers and the local view for those national
employers might not be representative of the company's overall
strategies, and so on. Again, that is another reason, I think,
for the coherence which is required and it is something I think
we should keep an eye on, as they transfer over to local authority
control.
Chairman: Thank you very much for that.
Paul will move on to intermediaries.
Q269 Paul Holmes: Just as background
to what I am going to ask you, both of you started off by saying
that really you would like a free market in this, and I notice,
in particular, in the written evidence from Protocol, they say
there are always frustrating caps on funding, there is too much
demand for this area and not enough somewhere else. It is not
a free market, is it, because the normal strength of the free
market is what the customer will pay with the cheque-book, and
in this case it is the taxpayer who is paying, it is not the employer,
it is not the learner, so really we cannot have a free market
in operation on this, can we?
Mr Wright: I think you are right
and I think it is difficult to be a completely free market. The
issue is who is your customer here, is your customer the learner
or is the customer the Learning and Skills Council or is the customer
the taxpayer, and that is the difficulty you have. Inevitably,
what you end up with, as a provider, is dancing to the tune of
managing those funds in the right way, and it is very difficult
to influence that in any other way, which means that, from time
to time, you know that you are working to the detriment of the
learner, or the employer, to some degree. I think the industry
has become absolutely obsessed with managing the minutiae of this,
rather than looking at some of the bigger picture. It is very
difficult to determine a good training strategy with an employer
which covers more than one region, when you have got different
demands region by region.
Q270 Paul Holmes: The example you
gave a little earlier, that you had an employer coming to you
saying "We want training for this," and you say "We
can't do that because it is not in the Government or the LSC criteria,"
but the employer can always say "I'll pay for it; do it anyway,"
if they really want the course?
Mr Wright: What they will do is
just moan about that, "Why can I have it here free and not
there free?" In fact, it is a very difficult argument to
defend with an employer. It is not as cut and dried as that, but
I think employers still see this largely as something to which
they are entitled and why do they not get it everywhere.
Q271 Paul Holmes: You have a limited
amount of public money, whatever the Chancellor makes available,
and it has got to be planned and regulated somehow, but everybody
who submits evidence is saying it is just so complicated, that
you have got all these different levels of regulators and funders
and inspectors and brokers and Sector Skills Councils. How would
you simplify it; you cannot sweep it away because it is not a
free market, but how would you simplify it dramatically so that
it would work more efficiently?
Mr Wright: I think a degree of
flexibility, in going back and being able to debate with the Learning
and Skills Council about where money could best be spent. What
tends to happen is you are given a contract allocation; that is
monitored to death. You get to the end of that contract allocation
and you say, "Well, there's still a greater demand here,"
then you end up with this bartering process of trying to move
money around. You can end up, at a year end, being underspent
on one qualification or age range and overspent on another. A
couple of years ago there was quite a furore in the industry because
any overspend which had happened was just not paid, and quite
rightly, in my view. Actually what you tend to end up doing is
really looking at this, managing it so that you do not overspend
or underspend anywhere, and I think you can miss some of the bigger
picture. How it would work in practice, I think a degree of flexibility
in an area, I think there needs to be a bit more commonality from
one region to another, and I think there needs to be currently
a bit more dialogue between one LSC and another, to see where
they can share some of these funds around. I do accept it is a
very difficult thing to manage it more strongly.
Q272 Paul Holmes: Again, there is
a tension there between what you have said and what some of the
earlier evidence was, that, on the one hand, people are saying
we need more regional flexibility and more local flexibility,
because we heard that in London creative industries are out, and
yet in Croydon there is a big issue that you want creative industries.
On the one hand, you want more local flexibility, but, on the
other hand, you are saying you want more national, innovative
conduct?
Mr Wright: I suppose there is
a bit of reflection of the type of business I am in, because if
you look at any of the priorities across nearly all of the regions,
hospitality and retail are way up there, so they always appear,
certainly in the Strategic Area Review, which happened a couple
of years ago, hospitality, retail and construction indeed were
well up there. We do not see huge regional differences in those
areas.
Q273 Paul Holmes: The bureaucracy
and the checks and balances you have been talking about, they
are there partly to make sure that there is not fraud in the system.
One of the first things we looked at in this Committee when I
joined it, in 2001, was Individual Learning Accounts, where the
Government deliberately tried to avoid all the bureaucracy and
it was just wide open to being ripped off, and it was ripped off.
How much of the bureaucracy is essential to avoid that and how
much can be streamlined?
Mr Wright: I think a lot is there
to prevent fraud, and I think that is driven by historical experience,
and clearly I think we are still living with some of that. It
is an intensely paper-driven system; the amount of paper and forms
and stuff that needs to be filled in on a daily basis is quite
overwhelming, frankly. The amount of infrastructure that one needs
to put in place to cope with that is huge. I think one of the
areas where you could tidy it up, and I mentioned it in my evidence,
was moving towards using IT better, using an electronic platform
better, getting the information sent through electronically, rather
than having to capture it on paper everywhere. I have offices
throughout the country full to the brim with bits of paper that
are used in an audit trail, so I think that is one of the ways
that we can do it; but I accept fully that there needs to be the
full check and balance on the way that the money is spent.
Mr Withey: I concur with much
of what Dan has said. I wrote down digital signatures. We have
17 forms to fill in when we take on a learner and that takes over
two hours before we have even started and we lose a number of
people because they just cannot be bothered to go through the
process, even though we hold the pen for them, quite often, so
just electronic uses would be great. One other thought I have
is that if the annual contracts that we get from the LSC were
longer; five years would be superb actually. The reason for that
is because then you have got some scope to invest in the earlier
days, you can put in some innovation, you can get some economies
of scale, economies of process, and so on, and I think we would
end up with a better product, at the end of the day, if we could
take that out. I think also it would save the annual calculations
of overspends and underspends, and so on, if we went for longer-term
contracts, which are artificial really because it just happens
to be the way that they are run.
Q274 Chairman: Why are there 17 forms,
17 forms for someone you have taken on for Train to Gain, for
example?
Mr Wright: I do not know the exact
number of forms for Train to Gain but there is a fair few. They
each serve a different purpose and part of it is the way that
you submit the paperwork to the LSC, some of it on retaining records
centrally and some are just duplications, you have to keep one
in one place and one in another. You are talking about, a mainstream
apprenticeship, certainly that is 17 forms. Again, going back
to information capture, which is why we are so keen to see delivery
of electronic learning, the amount of errors which occur as a
result of individuals sitting down filling in the same thing 17
times is just huge, so the amount of waste in the system is quite
incredible. To put it into perspective, I have got something like
50 people who are employed full time on processing bits of paper,
which is inordinate waste.
Q275 Paul Holmes: That could be consolidated
fairly easily into six instead of 17 forms?
Mr Wright: We talk about fields
of entry, which is the number of bits of information we put in,
but probably three forms you could condense it down to, yes.
Q276 Paul Holmes: We heard again
in the earlier part that you have got 16-year-olds coming out
of school who are not really getting the advice from Connexions
which they used to get from the old Careers Service perhaps, and
you have got a brokerage system for the adult end which, we are
told, is just not functioning so far. Is that your experience,
from a private sector point of view?
Mr Withey: I was interested to
listen to the FE answers. I think our experience is we work hard
with the brokers; it got off to a slow start, the marketing really
is not starting until now, it was a slow start, there were a lot
of problems which had to be ironed out in the early days. The
benefit is, clearly it is going to be as impartial as possible.
I think if we provided that service there would be questions.
Q277 Chairman: What did you say about
the brokers; you have used brokers?
Mr Withey: We use them for Train
to Gain, and in Train to Gain, to try to keep our numbers up,
in the early days when it was slow, just to get the momentum going
on some of the new machinery in place, we went to our existing
employers and our other contacts and brought them back to the
brokers just to start the process through. It is just a matter
of working with them.
Q278 Chairman: Why not just do the
job yourself?
Mr Wright: If there are some forms
to be filled in, you have to do it, so you have to get what is
called a unique reference number from the broker, which allows
you then to start the training process. It is a bureaucratic process.
Q279 Chairman: You cannot break through
the brokerage system?
Mr Wright: No.
Mr Withey: No.
2 See Ev 106 Back
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