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However, he identifies some weaknesses to be addressed and makes recommendations to strengthen and clarify the role of Ofqual. In her letter to me today, the chair of Ofqual, Kathleen Tattersall, confirms that she has also accepted those recommendations in full. We intend to legislate accordingly in the children, skills and learning Bill.

On test delivery, Lord Sutherland makes recommendations on how procedures can be modernised and improved in future years. As I told the House in a statement on 16 October, with Lord Sutherland’s advice, the QCA tendered for a single year contract for the delivery of the 2009 national tests. Last week, following the receipt of his report, I wrote to Lord Sutherland asking him to advise me on the QCA’s handling of the procurement process, and I have published his reply to me this afternoon.

In my statement to the House in October, I said that I agreed with the Select Committee that the principle of national testing is sound. I announced that we will not require pupils to take key stage 3 tests from 2009 onwards, but that externally marked key stage 2 national curriculum tests are essential to give parents, teachers and the public the information they need about the progress of each primary age child and of every primary school. I also said, however, that the current testing and assessment regime is not set in stone; that we will continue to look at the emerging evidence from our single level test pilots; and that I had asked our expert group to report in the spring.

I know that there are some who do not agree with me about the importance of externally marked national tests, but even they will agree that where we have national tests, they should be delivered successfully and on time, as they have been in the past. That did not happen this year. As Lord Sutherland concludes:

I am determined to ensure that this does not happen again, which is why we will now implement all of Lord Sutherland’s recommendations in full. I commend this statement to the House.

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Michael Gove (Surrey Heath) (Con): I thank the Secretary of State for his kindness in sending me prior notice of his statement and also in allowing me to read Lord Sutherland’s report in his Department earlier this afternoon.

The Sutherland report is an epic catalogue of incompetence, inefficiency and blinkered inactivity in the delivery of a vital public service. It paints an unremittingly depressing picture of the fiasco that was this year’s national curriculum test process. It points the finger at a series of figures, some of them still in office, who did not act as they should have done to safeguard the interests of our children.

May I express agreement with the Secretary of State that Lord Sutherland does us all a service in revealing that the company responsible for running those tests, ETS, was guilty of a series of fundamental mistakes? May I also ask the Secretary of State how ETS was allowed to get a multi-million pound contract in the first place? The procurement process that led to ETS getting its contract took 10 months. As well as a huge team of bureaucrats, the accountants PricewaterhouseCoopers were asked to scrutinise the company’s credentials, but in all that time not a single person uncovered the fact that ETS had a record of failure and poor performance in America.

Conservative Members supplied Lord Sutherland’s inquiry with a dossier of ETS’s past failures, and he records that the stories we uncovered

[Hon. Members: “Shameful!”] It is entirely shameful.

Lord Sutherland further recommends that the QCA should have carried out the due diligence that we carried out to assess potential suppliers’ track records. It took us 10 minutes on the internet to find out what the whole of Government could not establish in 10 months. How can Ministers ever have been satisfied with a procurement process that did not identify the most basic problem with a bidder—serial incompetence in the past?

I am grateful to the Secretary of State for the fact that the Government will now change the way in which they award contracts, but given the horrendous failure of the procurement process, will he explain why we still cannot see the original contract with ETS? We have still ended up paying money to ETS for its failure. Why did the contract not specify that ETS would pay fines rather than just have payments docked when it failed? In a case such as this, as the hon. Member for Wolverhampton, South-West (Rob Marris) indicated earlier, the taxpayer should be compensated. We can judge whether our interests were properly safeguarded only if the contract is made public. So why can we not see it?

Blame for what went wrong properly rests on many shoulders. ETS has paid the price, although not as heavily as it should, and the QCA’s chief executive, Ken Boston, has rightly resigned, but Ministers have argued that their responsibility is limited because the process of managing those tests was at arm’s length—the Pontius Pilate defence.

In the House on 22 July, the Secretary of State said that Ministers did not even see the contracts drawn up with ETS, yet in evidence to Lord Sutherland, Ken Boston pointed out:

Does the Secretary of State accept his Department’s share of responsibility? Does he accept that Ministers were active participants in this fiasco? Or does he think Ken Boston was lying?

The Sutherland report also reveals that Department for Children, Schools and Families officials sat in on the crucial meetings throughout 2007 when flaws were revealed with the handling of those tests. Lord Sutherland points out that problems were raised at the Department’s own senior management review group in February 2008. He reports that DCSF observers escalated their own assessment of risks to Ministers on a number of occasions in 2008. Will the Secretary of State tell us when those occasions were? Will he tell us why, when his officials were escalating their assessment of risk, he did nothing?

The Secretary of State said that it was not appropriate for him to challenge the complacent judgment of those delivering the tests, but the facts about failure were in the public domain long before he took any action. When we raised problems concerning ETS and its track record in May, the Secretary of State told us that matters were on track, and he did nothing.

On 11 June, the Minister for Schools and Learners told us that he had been in regular contact with the test delivery body, the National Assessment Agency, but the Sutherland report reveals that the first time the Minister had a substantial discussion with the man in charge of the NAA was only on 17 June, one week later. How does the Secretary of State explain such culpable inactivity? Does he not regret the fact that Ministers did not act earlier? Why, when his officials knew what was going wrong, his Department’s review group knew that things were going wrong and we told him that they were going wrong, did he ignore all these warnings? Why were so many signals flashing danger so studiously ignored?

It is crucial that we have confidence in national curriculum tests. They are vital measures by which we hold schools and heads accountable. It is only fair that those in charge of this process are also held accountable. This Government have failed, and no Minister has acknowledged their role in this failure. Until they do, parents and teachers will conclude that this Government believe that everyone should be accountable for failure apart from them.

Ed Balls: I completely agree with the hon. Gentleman that there was a clear failure, and that is why we commissioned an independent report. The report makes it clear that the primary failure was a failure by ETS, the supplier, but there was also a failure of the QCA to deliver on its remit. That is where the failure lies, and it is where the recommendations for action are. It is clear from the comments that I made in my opening statement that Lord Sutherland himself said that

He makes it clear in a litany of comments throughout the report that there was a systemic failure by NAA and QCA executives to assess risks properly, and then to pass those risks to the board and to Ministers. That is where the failure lies, and it is a failure that we will address.

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The hon. Gentleman asked about procurement, and I repeat what I said in my statement. Lord Sutherland says that

and he notes that there were two Office of Government Commerce reviews into that procurement procedure, the first of which gave a green light to the procurement, and the second of which gave an amber light because of a payment issue, which was subsequently resolved. As the Minister for Schools and Learners said in his evidence to Lord Sutherland,

We know, and Lord Sutherland says, that while there was proper due diligence on financial strength and liquidity, the reviews did not look at the 180 countries in which ETS operates, or the 2,600 staff that it employs all around the world, to find some of the examples that subsequently came to light. I say, quite rightly, that that was a failure. It was a failure in the procurement process, and a failure that should have been spotted, as Lord Sutherland says— [ Interruption. ]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Questions have been put to the Secretary of State and he should be given a chance to answer without a chorus of protest at the same time.

Ed Balls: If hon. Members had taken time to read the report, they would have found that the answers are right here on the page. I am afraid that their questions betray the fact that they have not yet had time to study the report.

We have asked the OGC to implement Lord Sutherland’s recommendation that in future we should ensure that such information comes to light. When the information came to light in May, as the hon. Gentleman knows, I had a phone call and a meeting with Mr. Ken Boston, who assured me in a meeting on 2 June that things were on track with the delivery of the tests in 2008. The hon. Gentleman asked what Ministers did, and I just say again that in February, March, April, June and July, Ministers were informed by DCSF officials that there were concerns. [Interruption.] I will state what Lord Sutherland says, because he conducted the independent review:

Well, the word “usually” means that that is what they did, and that is what we did on 2 June and 17 June. Lord Sutherland continues:

The assurance I gave the hon. Gentleman was the assurance we were receiving from the QCA. It was the responsible body and it had the remit to deliver those tests. It failed to deliver that remit, as Lord Sutherland’s report— [Interruption.] Well, I advise the hon. Member for Beverley and Holderness (Mr. Stuart) to read the report; as a Select Committee member, I am sure he will.

We did not take the advice of Conservative Members, however. We did not take the advice of the Leader of the Opposition, who throughout July repeatedly called
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on us to sack summarily the contractor, ETS. As the legal advice made clear to me, if we had done so we would have been in a legal dispute with ETS, and we would not have got the £24 million back to the taxpayer, which we secured in August. Throughout July, Opposition Members, having made no comment on this matter at all until May, grandstanded time and again, calling for steps that would have cost the taxpayer millions of pounds. We did the proper thing, which was to ignore their calls, their grandstanding and their irresponsibility; instead, we did the right thing by the taxpayer, and that is what I am determined to do.

The fact is that, as Lord Sutherland’s report makes clear, there was a delivery failure by the QCA. The leaders of the QCA and of the part of it that delivered the test, the NAA, have both now been suspended. There are a number of recommendations, all of which will be implemented in full. That will not repair the damage of the tests this year, and I cannot take away the inconvenience suffered by pupils and teachers. What I can do, however, is take seriously the conclusions of an independent inquiry that clearly says where the blame lies, and act upon that to ensure that in future we return to the way things were before ETS Europe, with a proper delivery of tests in our country.

Mr. David Laws (Yeovil) (LD): I, too, thank the Secretary of State for giving me early sight of both his statement and Lord Sutherland’s report.

On page 30 of the report, which was issued today, Lord Sutherland quotes the chairman of the QCA back in December 2006 rather optimistically suggesting that this contract might eventually be seen as a case study in best practice. Sadly, what Lord Sutherland has reported seems to be a masterclass in incompetent project management, with ETS, the NAA, the QCA and perhaps Ministers to blame in varying degrees.

First, I want to make it clear that I support the action that the Government have taken so far in removing the contract from ETS and in changing the management of the QCA and the NAA. Those actions are justified by the information provided by Lord Sutherland. However, I am not quite so clear that the Secretary of State’s statement is satisfactory in relation to the role of his Department and Ministers. Indeed, his statement could be summed up as follows: “Everybody is to blame other than Ministers.” Even officials in his Department get the blame, along with ETS, the QCA and the NAA.

May I take the Secretary of State back to two points raised by the hon. Member for Surrey Heath (Michael Gove), which I fear he did not respond to? First, the Secretary of State quoted paragraph 4.137 on page 85 of the report. It suggests that what happened in 2008 was that his Department’s observers escalated their own assessment of risks to Ministers on a number of occasions, and it goes on to say that

A moment ago, the Secretary of State seemed to indicate that “usually” means “always”, but it does not. Therefore, after today’s sitting, could he send the hon. Member for Surrey Heath and me a list of all the occasions when DCSF observers raised these issues with Ministers, and will he describe what the concerns were on each occasion and how Ministers decided to act, if at all?

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Will the Secretary of State also return to another point raised by the hon. Member for Surrey Heath? On page 37 of the report, Lord Sutherland quotes Ken Boston of the QCA, who wrote the following in evidence as recently as three weeks ago, on 27 November:

Is that not the clearest possible signal, given just three weeks ago, that the head of the QCA was anticipating that he and the NAA would be expected by Ministers to shoulder the full responsibility? He clearly does not believe that that should fall only to the QCA and the NAA. Did the Secretary of State request Ken Boston’s resignation or was that offered by the chief executive of the QCA on an entirely voluntary basis? Let me make it clear to the Secretary of State that I am not suggesting that ETS, the NAA and the QCA do not have the primary burden of blame, because they clearly do. I am suggesting that it is also the case that Ministers appear to be asleep at the wheel and that they should accept some responsibility.

May I raise three brief final points about the future of the key stage tests? First, we understand from one of the letters that the Secretary of State has issued today that he—or the QCA—will be releasing information today on the number of appeals against the 2008 test results and what proportion of them have been upheld. Why was that information not available to the House before this statement, and can he shed some light on that today? Secondly, does he accept that, given the short time scale before the key stage 2 tests in 2009, Ministers will need to accept direct oversight and responsibility for ensuring that those tests are delivered effectively? They will not be able to get away with distancing themselves in the way that they have done this year.

Thirdly, and finally, may I ask the Secretary of State about the future of key stage 2 national tests? May I suggest that those should be retained and that he should not proceed with the single level tests? However, in the review that is under way, will he ensure that the opportunity is taken for a fundamental reappraisal of what is being tested and of the scope for improving and streamlining the tests and for using more internal assessment, complemented by both external assessment and external checks? If he manages this review effectively, it is still possible that we will salvage something from the shambles that Lord Sutherland describes so effectively today.

Ed Balls: Let me answer the hon. Gentleman’s questions first. I shall ensure that the expert group does a thorough job, and I will forward its conclusions on future testing to the House. We will need to make future decisions at that point, because as I have said, the regime is not set in stone. However, I disagree with his proposals for key stage 2 tests.

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