Examination of Witnesses (Questions 280-299)
MR DAN
WRIGHT AND
MR SIMON
WITHEY
26 MARCH 2007
Q280 Paul Holmes: Does the broker
do quality control, because again with the ILAs people could say
"I've got an upstairs office, with 20 computers and trainers"
and these sorts of people, and nobody ever checked and they could
claim what they wanted? Is the point of the brokerage that there
is supposed to be some sort of "control" which prevents
fraud?
Mr Wright: Yes. The way that we
work it is that is retrospective, so once we have engaged an employer
the idea is that the broker will then go in and check to make
sure that the employer has all the information, and that is what
we do, we give them access to the employer.
Q281 Chairman: Would you agree with
the colleges, who were sitting where you are sitting, a few minutes
ago, who said that brokers do not have any experience of training?
Mr Wright: I would agree.
Q282 Chairman: They are going to
check something of which they have got no experience?
Mr Wright: I think also they referred
to the tick-box exercise, which is "Have you done X; have
you done Y;" does that fit in with the criteria.
Q283 Chairman: Who are the brokers
then?
Mr Wright: We deal with a whole
range of them; we have got brokers dotted through every LSC region.
Q284 Chairman: Which brokers are
they?
Mr Wright: A lot of them are Business
Link; that is the majority of them, to be honest.
Mr Withey: The majority of ours
are Business Link as well.
Mr Wright: The London Business
Consortium in London.
Q285 Chairman: Business Link are
doing this because they have been so successful with the other
things they do they have got plenty of time on their hands?
Mr Withey: Yes, I think so.
Q286 Chairman: You are smiling, Dan?
Mr Wright: In my mind, the whole
thing was rushed. When the employer training pilot started, and
that was when the brokerage system was formulated, it seemed like
a good idea; there was a rush to get the contracts, people saw
the pot of money and went for it. I think the system was not in
place when the contract was awarded.
Q287 Chairman: What was reaching
the ears of most of us, when the employer training pilots were
on, was that the pilots seemed to be successful; so the Government
wanted to roll them out because the pilots had been successful.
Was that right, or not?
Mr Withey: I think they were successful.
I think what we are seeing, the problems with the brokers, I would
like to think are teething problems actually. You have got to
work hard with the brokers to make it work; you will not just
sit there and wait for them to come to you, the learners to contact
you, I think we accept that you have got to push them as well.
Q288 Paul Holmes: Although that is
their job?
Mr Withey: Yes, it is their job,
but, there again, I think you could ask why FE colleges have to
go out and market their capability; learners will find them, or
somebody will. You have to deal with them.
Q289 Chairman: How much are you giving
away? In Train to Gain, there is an employer, sitting there, unable
to make up his, or her, mind whether he, or she, wants to train
his, or her, employees; you appear on the scene, or any provider,
and say, "If you do this training, this is what you get."
What are you offering them?
Mr Wright: In terms of when we
sit down with the employer, it gives entitlement to a qualification
which is more available than some of the mainstream funding; i.e.,
on 19-plus learning, they are quite restrictive on funding, whereas
Train to Gain is another area which we can offer, which opens
it up to a wider audience for that employer.
Q290 Chairman: Just to get to brass
tacks, what are they getting out of it?
Mr Wright: A qualification for
their workforce.
Q291 Chairman: How much is it costing
them?
Mr Wright: Nothing.
Q292 Chairman: Why; how much is it
worth?
Mr Wright: You would have to ask
the employers that, I suppose. At the end of the day, what we
say to them is, "You're getting a value which is placed on
your workforce productivity." We try to convince them that
it has benefits for the retention of their people, it gets them
better qualified; certainly it addresses some of the Skills for
Life issues.
Q293 Chairman: I take that for granted;
but how much are they getting, how much is this bit of training
costing? Someone is paying for it: how much is it costing the
Government?
Mr Wright: It is about £1,200
per learner.
Q294 Chairman: Basically, you are
in this terrible market where you have got to go out there and
persuade people to accept £1,200?
Mr Wright: No.
Q295 Chairman: That does not sound
like red in tooth and claw to me.
Mr Wright: No; no. That is absolutely
right. It is an attractive proposition for an employer; but the
point is that you are doing it either with the employer or to
them, and I think that is the difference, if it is an integrated
part of their training programme, and that is the bit of Train
to Gain which it is intended to do.
Q296 Chairman: You are also giving
it to people who, up until then, were paying for it anyway: McDonald's.
You were in the hospitality business. McDonald's get it free now,
when they were paying for it before, do they?
Mr Wright: McDonald's would not
be eligible for Train to Gain because of the size of their business,
but they are getting a sizeable chunk of funding through the mainstream
apprenticeship programme, yes.
Chairman: It is a strange world, is it
not, this training business; you are going around, encouraging
them, saying "You can have this and it's free," and
a couple of years ago, or last year, it was not free. There are
dead-weight issues there.
Q297 Stephen Williams: This is a
supplementary to something Paul was asking about earlier. We have
heard, both from the witnesses we have before us and previous
witnesses today and in previous sessions, the sort of classic
acceptance that employers are not going to pay for certain modes
of training. I think it was Dan who said, "Oh, they're just
moaning about what is free somewhere else, if they cannot get
what is free and what they actually want." Yet Lord Leitch
has said that he wants employers to pay more and is going to give
them until 2010 to up their game; but we know the answer to that
already and the culture is not going to change?
Mr Wright: I think that is the
challenge for the industry, it is the challenge for me, as a work-based
learning provider, we know that is going to happen. The effect
of that is simply, from what we can see at the moment, what will
happen is the 19-plus funding will simply not receive inflationary
increases, so unless they pay then organisations like mine will
pick up the slack and we will subsidise it because we will do
it for less. The driver for my organisation is to make sure that
there is a contribution from the employer going forward and that
what we have to do is start working with them on a much more strategic
level about how they can tie their training programmes into accredited
apprenticeships.
Q298 Stephen Williams: The Chancellor's
answer to this, Chairman, is to appoint Digby Jones to go round
prodding employers. Do you think that is going to work; does he
frighten you?
Mr Wright: I think he will raise
the profile of the debate, and that is important. I still think
that there is a level of misunderstanding with employers, which
is quite astounding really, the lack of knowledge that many employers
have about the work-based learning environment and what is available.
There is a lot of ignorance there, to be frank; so the more we
can raise that the better. How effective Sir Digby Jones is going
to be is a matter for conjecture, I suppose.
Q299 Chairman: That £1,200,
which is going to be spent on that employee, what is your share
of that?
Mr Wright: It is a pretty low-margin
business, to be honest. Our operating margin is about 10%.
Mr Withey: That is the fee for
the training provider to get the individual through his, or her,
framework.
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