Examination of Witnesses (Questions 100-119)
MR MARTIN
DOEL, MR
GRAHAM MOORE
AND DR
JOHN BLAKE
20 MAY 2009
Q100 Mr Marsden: Can I just ask on
that question, you say it was the LSC process, I am going to press
you on that: Phil Head, who was the national organisation guy
who went round to all the colleges, did he come to you and was
it Phil Head who advised you?
Dr Blake: Yes, he did come to
the college.
Q101 Mr Marsden: And was it Phil
Head who advised you of the scaling down?
Dr Blake: Yes.
Q102 Mr Boswell: But it was still
presented as an in-year adjustment problem?
Dr Blake: It was an adjustment
to the scheme that was originally planned so it was still the
same scheme but it was in a number of phases rather than one fell
swoop.
Q103 Mr Boswell: I wonder if I can
ask Martin—and I do not think it is unfair because he has
previous experience of administration—it seems to me just
looking at this to have been a serious communications problem.
First of all, in terms of your present organisation, do you think
you could have been more proactive in asking the Department or
the LSC, "Houston, we have a problem," and conversely
were the mechanisms in place or do you think they could have been
improved to make sure that that amber light if not a red light
flashed much earlier so that people were not embarrassed in the
way that clearly they have been? Is this a failure of structure
or is this something else?
Mr Doel: I think it is a failure
of structure and process within the LSC which would make it very
difficult with the way that they were operating for any external
organisation to have any reliable picture of the flow of funds
and cash towards the people that were due to receive those monies.
Q104 Mr Boswell: So they were not
really in dialogue with you in terms of it?
Mr Doel: The only dialogue that
I would have had or oversight that our organisation would have
had in terms of capital flows or funds for capital would have
been talking directly to our own colleges and collating a picture
to understand what was occurring. That is what we sought to do
as soon as the suspension was notified.
Q105 Mr Boswell: Only ex post?
I think John had said, or perhaps Graham said, that there was
beginning to be concern and conversations in the sector, but actually
it really did come like a bolt from the blue?
Mr Doel: I would share Graham's
view that there was beginning to be some stirring of unease but
because of the opaqueness of the way in which the LSC was doing
its business at that time—and there was a good deal of opaqueness
on many matters, including Train to Gain funding—actually
trying to work through that to understand where you are would
have been very difficult.
Q106 Mr Boswell: Or to register your
own concern?
Mr Doel: And also to go and ask
the colleges without due cause at that time would have been to
induce more concern, arguably, and also some of them would have
been reluctant, even to a trusted member organisation, to give
full details of their financial exposure at that stage. It was
only when it became clear that there was something serious happening
that they became more open to sharing information at the individual
institution level, and that then we could begin to form a picture
of what we believed to be the seriousness of the situation.
Q107 Chairman: I think we have got
a reasonable handle on the chronology but one of the big problems
seems to have been this massive bidding up of projects that started
off, and you mentioned Bradford as a good example, and I know
quite a bit about Bradford, who wanted a fairly modest development
and were told to bid up. Where did that culture come from, Graham?
Where did that arise? Is it just hearsay?
Mr Moore: I think Mark Haysom
led the LSC with a big ambition which he sold to the Government
that the FE sector urgently needed modernisation and I think that
was one of the key planks on which he led the LSC.
Q108 Chairman: He was right.
Mr Moore: And he was absolutely
right. To begin with I think he was frustrated with the sector
that they were not coming forward fast enough. They were not prepared
to take enough risks as a sector to make this happen, so what
he was getting was modest proposals for changes tinkering, if
you like, with the estate structure. I suspect, although I do
not know from the inside, that he sent out instructions, or his
team sent out instructions, to the regions and to the local areas
for them to go out and talk to the colleges about their plans
and asking were these plans transformational enough. I know in
the West Midlands, for example, in 2007 we were all invited to
share with the local LSC and the regional LSC what our expectations
and hopes were, so there was a regional capital plan. What it
could have been was a capital plan that was based on need and
business case and so on. What I think it was was actually a wish
list of what colleges wanted to do. That was in 2007. It still
was not coming through fast enough. I know in my own college we
were asked about what should we do. I am always reluctant to say
that buildings that are relatively new should go. This is public
money we are talking about here. I knew what my priorities within
the structure were but I was constantly questioned, "You
are missing an opportunity. This is a once-in-a-lifetime opportunity
for the sector."
Q109 Chairman: Let me stop you there
because where is the evidence for all of this? We cannot find
any evidence that any instruction went from the Learning and Skills
Council to the sub-regional learning and skills councils and from
them to colleges to say, "This is a letter which says, Mr
Moore, we want you to put in a Rolls-Royce proposal rather than
... "
Mr Moore: That is not how the
process works. There is somebody appointed in each local area
office who had a remit for capital and it is the way those people
in each local office operated with their colleges and the view
was, "So-and-so down the road is doing this; are you really
doing enough?"
Q110 Chairman: So it is all word
of mouth? John, you are about to explain.
Dr Blake: Again just to give an
exemplar of it, about three and a half years ago we had a quite
modest project of about £8 million to replace one of our
sixth form colleges. At the beginning of the LSC process, the
point that Graham talked about, it went up to £30 million,
then it went up to £90 million, and at the end it was £175
million, and in the end most of that was a bigging-up process,
and that happened through the regional LSC property process.
Q111 Chairman: Which division are
you in?
Dr Blake: South East Region LSC.
Q112 Chairman: So it was the director?
Dr Blake: The team probably. I
can remember going to a meeting with the LSC in Sussex where all
the principals and all the chairs were basically told that they
were being too conservative.
Q113 Mr Boswell: Is that meeting
minuted?
Dr Blake: I have no idea.
Q114 Mr Marsden: Can you just confirm,
John, you said it was the regional infrastructure director who
gave you this—
Dr Blake: The regional property
adviser would visit colleges and would suggest that we should
be more aspirational with our projects.
Q115 Mr Marsden: The national Director
of Infrastructure and Property, Phil Head, he visited your college?
Dr Blake: Only last August at
the point when—
Q116 Mr Marsden: And that was when
he was coming to tell you the bad news about scaling down?
Dr Blake: About phasing.
Q117 Mr Marsden: So he never at any
stage as far as you are aware—
Dr Blake: Not prior to that, not
that I am aware of, no.
Mr Moore: I think the regional
estates officers have actually done a very good job within their
remit which is to look at the proposals and see whether they make
educational sense, to see whether or not the property case is
there. I think that process has been done very well by the LSC
at that level but it was not within any overall context, it seems
to me.
Q118 Mr Marsden: You cannot have
projects without a budget, can you?
Mr Moore: And I do not think that
regional officers were asked to take account of the budget implications
of what they were doing, I think that is the issue.
Mr Doel: Gordon picks up the point
about the National Capital Team and I have spoken to several colleges
who all say that the National Capital Team came to them and discussed
their needs and encouraged them to be forward-looking and properly
aspirational, they would have said, in terms of their rebuilds.
Q119 Mr Boswell: Just for the timing
of that, that would have been at least 12 months ago?
Mr Doel: That would have been
in the summer of last year.
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