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House of Lords

Monday, 17th February 2003.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Chelmsford.

Lord Bassam of Brighton: Personal Statement

Lord Bassam of Brighton: My Lords, with the leave of the House, I have a statement to make about a reply that I gave on 11th February in answer to a Starred Question from the noble Lord, Lord Hooson, about the number of people given leave to enter the United Kingdom as investors.

In my Answer, I said that the information requested was not available. I am afraid that I have subsequently received information that, although it is not separately recorded in the published Control of Immigration Statistics United Kingdom 2001, it is none the less recorded by the Home Office Immigration and Nationality Directorate. The information therefore can be made available, and I offer my unreserved apologies to your Lordships for not doing so at the time.

The noble Lord, Lord Hooson, asked for figures for the past five years. The answer is as follows: in 2001, there were 25; in 2000, there were 50; in 1999, there were 25; in 1998, there were 15; and in 1997, there were 25. In total, there were 140.

Once again, I apologise unreservedly to your Lordships, and in particular to the noble Lord, Lord Hooson, for inadvertently misleading the House.

Individual Learning Accounts

2.37 p.m.

Baroness Blatch asked Her Majesty's Government:

    What progress has been made on the investigation into individual learning accounts.

Lord Davies of Oldham: My Lords, the department's special investigation unit has been asked to investigate 153 learning provider organisations. One hundred and nine of these cases have been passed to the police. To date, there have been 62 arrests, resulting in 10 people accepting cautions. Eleven others are awaiting court appearances. One person has been convicted.

Baroness Blatch: My Lords, I am grateful to the Minister for that detailed reply. I have two further questions. First, what is the latest figure for the amount of money that was fraudulently taken from

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the taxpayer? Secondly, is anyone in the department responsible for what happened? If not, who is responsible?

Lord Davies of Oldham: My Lords, we think that 69 million has been the subject of possible fraudulent claims with regard to the money spent on the individual learning accounts. However, that is against a background of the programme massively exceeding expectations. We budgeted for a take-up of 1 million students in the first year, but had 2.5 million applications. As soon as we discovered that fraud had been perpetrated, we put an early stop to the programme. We recognise that that caused considerable distress to students and to those providers who were providing legitimately.

Baroness Sharp of Guildford: My Lords, given the figures that the Minister gave, he will be aware that many people saw the scheme as an opportunity to open up training for themselves. Has the department any proposals to replace the scheme, which was so ill thought-through, with one that will really work?

Lord Davies of Oldham: My Lords, let me first reassure the House that Ministers have learned the lessons of the previous scheme. A new one will be guaranteed to ensure that no recurrence of such fraud occurs. We propose to consult on the new learning and skills strategy in April, with a document for consultation, and to introduce the new proposals in June.

Lord Burnham: My Lords, my noble friend asked who was considered responsible.

Lord Davies of Oldham: My Lords, clearly there were mistakes in the department—that goes without saying. The scheme was a novel one, and it was almost unparalleled in government that such a demand-led scheme should be developed. There is no doubt at all that the scheme had flaws and failures, about which we learned subsequently. The administration of the scheme, and the company employed to carry it out, were another aspect of the problem. In consequence, 1 million of the 2.5 million to which it was entitled was withheld, and 1.5 million was paid.

Lord Brooke of Sutton Mandeville: My Lords, the Minister referred to the expectation of a take-up of 1 million and an outcome of 2.5 million. However, did not providers encourage the large number of extra people to join? The scheme was flawed in that it did not provide a safety net to prevent that happening.

Lord Davies of Oldham: My Lords, fraud on that scale meant that some providers stimulated people to apply, through various strategies, for the advantage of taking the money without providing the service. However, of that 2.5 million, 91 per cent received satisfactory training and gave a satisfactory rating to the programme. Therefore, in terms of delivery, the programme was a considerable success. The fraud, however, leads to the inevitable embarrassment.

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Lord Campbell-Savours: My Lords, is it not true that we do not always learn the lessons that we should from the past? In the 1990s, on several occasions, these training companies were caught out doing precisely what they did on this occasion. Indeed, the Public Accounts Committee in another place held inquiries into their activities and found fault. If I recall correctly, a decision was made to prosecute a major training company only three years ago, on a similar issue.

Lord Davies of Oldham: My Lords, I think we would all recognise that training involves the Department for Education and Skills in a particular relationship with a very large number of private providers, and that a very large number of people train effectively and efficiently in this country—hence the previous administration's difficulties, which my noble friend indicated, with training and enterprise councils. I think that we would all recognise the element of difficulty and risk that attaches when resources have to be committed to private organisations to provide the service, whereas the students themselves, by definition, are not able in their early stages of training to judge the quality of that service. I can only tell my noble friend that we have learned some very sharp lessons from the individual learning accounts. Those lessons will guarantee that the new schemes which emerge in June obviate any of these potential dangers.

Baroness Walmsley: My Lords, is the Minister—

Lord Swinfen: My Lords, who was the Minister responsible—

The Lord Privy Seal (Lord Williams of Mostyn): My Lords, it is the turn of the Liberal Democrats.

Baroness Walmsley: My Lords, is the Minister aware that, at 300, the value of an ILA is only about one-tenth of the cost of professional training for, for example, a computer training programme, which might cost about 3,000, and yet no other support is available for those over 25? There used to be a scheme whereby such training could be offset against tax. Do the Government have any plans to reintroduce such a scheme? Would the Minister also be kind enough to answer the question from the noble Baroness, Lady Blatch, about who is responsible?

Lord Davies of Oldham: My Lords, on the first question, we are not proposing to reintroduce the scheme which the noble Baroness identifies. However, I am totally mindful of the fact that, as she rightly identified and the individual learning account scheme indicated, there is enormous need and demand in our community for access to high-quality training. It is very much in our interest that we support our people in receiving additional training. The training will inevitably entail a mix of government initiative and support and private resources, as much of the training can be delivered only within those terms.

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As for responsibility, the individual learning account scheme was developed immediately after the Government came to office and successive Ministers played their part in its development and oversight. I think it is recognised that, because of the huge uptake of the scheme in its very first year, what looked to be a roaring success story was subsequently identified as subject to potential fraud in a relatively small percentage of cases.

Lord Graham of Edmonton: My Lords, perhaps I may—

Lord Williams of Mostyn: My Lords, we are into the ninth minute now and there are three other Questions.

Student Fees

2.46 p.m.

Baroness Seccombe asked Her Majesty's Government:

    What financial impact their policy on top-up fees will have on higher education in all areas of the United Kingdom.

Lord Davies of Oldham: My Lords, from 2006, English HE institutions will be allowed to determine the fees they charge up to an upper limit of 3,000. Any UK students choosing to undertake HE courses at English institutions for which variable fees are charged will be liable to pay fees. However, we will continue our current system of fee remission. Under proposed arrangements, students from both England and Wales will be able to defer payment of those fees until after graduation. We will discuss any cross-border White Paper implications with the devolved administrations.

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