Individual Learning Accounts
In a minute, I will ask the minister to make some introductory comments on ILAs, during which she will answer Brian Fitzpatrick's parked question. Then I will open the subject up for questions. I again welcome Phil Gallie, who has taken a particular interest in ILAs.
I should point out that there is a distinct possibility, indeed a probability, that the problems with ILAs will lead to legal action of some kind. I warn members that the minister is attending the meeting on the understanding that she might not be able to be totally explicit about some issues. If she is circumspect, I ask the committee to be understanding about the reasons why. Is that reasonable, Wendy?
Yes. The committee will appreciate how much of a challenge it is for me not to depart from the script on those aspects that have possible legal implications. It will be a first.
Those who have been members of the committee for a long time and who have followed this matter with great interest should forgive me. However, I know that other committee members are new and I want to take a few minutes to talk about the history of ILAs before I move on to highlight some new information that has emerged from the early evaluation. I will also talk about the suspension of the accounts and what will happen next.
The ambition to have ILAs was set out in February 1998 and consultation took place in 1999. The original bank-account concept was not regarded as possible, so a membership-based scheme was developed.
Following concerns about possible fraud in Northern Ireland and England, I issued a statement about the actions that we were taking in Scotland to prevent fraud. At the same time, warnings were sent to learning providers. From the outset, ILAs were considered to be part of a UK-wide approach. One of the challenges for us in the next six months—which we do not need to resolve today, but we do at some point—is to reflect upon the extent to which the approach should be UK-wide.
Responsibility for the issue was devolved and the scheme was designed to stimulate people to make a personal investment in their learning. On delivery, Scotland had a different organisational structure and gave a lead role to learndirect Scotland in providing the one-stop shop and as the broker of learning. In addition, the enterprise networks were used to handle payments and local marketing. Our arrangements were different from those in the other three countries, although we used the same ILA centre—Capita—as England and Northern Ireland but in a more limited role. That is significant in respect of the suspension.
The scheme's purpose was not simply to be universal, but to encourage non-traditional learners into learning. People will be familiar with Frank Pignatelli talking about the three Ds. Work was done in particular with people on low incomes and there was financial support for a wide range of learning opportunities. There was a higher discount for information, communication and technology courses and basic literacy and numeracy.
Turning to its achievements, the scheme exceeded all forecasts of likely uptake. It is significant that there is a huge latent demand for learning. We have begun to win the argument in hearts and minds that lifelong learning matters. From the earliest days, the scheme was very successful and the feedback was good.
I have new information for the committee, about which I notified the convener. Initial findings from the current evaluation exercise show that the vast majority of learners—85 per cent—who used their ILAs thought that their courses had met or exceeded their expectations. The vast majority—80 per cent—of learners said that their courses had improved their knowledge and skills. There have been concrete returns for learners who used their ILAs—for example, 41 per cent identified a direct benefit of gaining a qualification. More than half said that ILA learning had helped them to get a better job. I will return to that later. We do not want to lose such achievements as a result of the difficulties.
There is no doubt that ILAs have helped to effect the cultural transformation of commitment to lifelong learning that the committee and the Executive are keen to effect. Half of those who were interviewed said that using their ILA had changed their attitude towards learning. It is encouraging that 60 per cent of learners planned to take part in more learning and 40 per cent were already doing so. Given that 59 per cent of the adult population in Scotland does not return for more education, that is a cultural transformation.
Our target of 100,000 accounts was achieved well ahead of schedule and there are now around 266,000 members in Scotland, with more than 127,000 having used their accounts for learning. Perhaps as important, we have stimulated a market for learning in Scotland. I mentioned the £2.2 billion spent by employers. The market created by ILAs has helped to encourage 1,100 learning providers to provide ILAs in Scotland.
That is encouraging, but I want to deal with the problems and when they happened. A customer charter and complaints procedures were established in Scotland at an early stage, providing a useful mechanism for identifying concerns and complaints. In July 2001, some of the problems that were occurring in England were first drawn to our attention. At that time, there was no indication that the fraudulent practices in England were occurring to the same extent in Scotland. I think that Phil Gallie wrote to me at that stage.
We began to see signs of mis-selling of ILAs, and, in August last year, we told learning providers about our concerns about mis-selling. At that stage, it was, I think, described as inadvertent rather than malicious. Following concerns about possible fraud in Northern Ireland and England, I issued a statement about the actions that we were taking in Scotland to prevent fraud. At the same time, warnings were sent to learning providers.
On 26 October, the English and Northern Irish gave six weeks' notice of the closure of their schemes, to take effect from 7 December. That happened because of concerns about possible abuse. In Scotland—and, as I have said, we testified on this issue at the time—we decided, because of our different arrangements, to continue the scheme but to monitor it very closely.
A month later, on 23 November, as a result of further concerns in England about fraud and abuse, the English and the Northern Irish decided to close their schemes with immediate effect, rather than waiting until 7 December as they had intended. I therefore suspended the operation of the ILA scheme pending further investigations.
From those investigations and from further advice taken, it was clear that we could not guarantee that the types of abuse that were occurring in England would not also be perpetrated in Scotland. Similar concerns emerged in Wales. As a precautionary measure to protect public funds, we closed the scheme in Scotland with effect from 20 December, and the Welsh followed shortly thereafter.
When the ILA computer system was shut down on police orders, pending payments were held back in order to allow assessment of additional risks. Having assessed those risks, Scottish Enterprise and Highlands and Islands Enterprise embarked on a special validation exercise, as members are aware. That exercise involved considering claims from more than 600 learning providers in the system. As a result, many outstanding claims have been paid. However, a number have not been paid. They fall into two categories. In the first category are claims in which there are anomalies in the evidence collected. The learning providers involved have been contacted for further information, which is now being gathered to allow a final decision to be taken. In the second category are learning providers about which the exercise has uncovered evidence of improper actions.
As I said, an ever-declining list of learning providers is left in the system. Investigations to date suggest fraud in around 3 per cent of learning providers. I cannot comment on individual cases—I am grateful to the convener for making that clear to everyone. The ILA scheme has been so successful in helping to achieve a lifelong learning culture that it is terribly important that we find a way of dealing with the problem of fraud and find an ILA mark 2 that provides all the benefits that we want. Legal advice is being sought and we have had initial discussions with Strathclyde police. It is likely that further investigations will be required. In some circumstances, there may be civil recovery procedures.
Looking to the future, we must build on the strengths of the original ILA scheme while tackling the concerns that arose because of inappropriate use, or abuse, of the scheme. That will involve our seeking out and listening to the views of learners, learning providers and stakeholders. I have spoken about the early consultation document that we are making available today and I am genuinely interested in hearing the views of committee members—I know that you will have views on the matter. We are sharing our experiences with England, Wales and Northern Ireland and we are learning lessons.
We will have to take a balanced view on the most appropriate action to protect public funds and learners. That will be done in consultation with finance and audit experts to ensure that we attain propriety and value for money. Work has already started on building on the existing learndirect Scotland checks on learning providers and courses. Our main aim is to tackle quality issues. When we remember that we have created a market with 1,100 learning providers, it is not surprising that quality issues have arisen. A thorough check is under way, which is likely to result in a number of improvements.
Clearer guidance is being sent to learning providers on how they should operate in future. We must also ensure that learners understand their responsibilities, so we must provide them with the best advice on how to take advantage of the scheme. I am thinking in particular of the fact that they should themselves contribute to the scheme.
As I suggested earlier to the convener, consideration of the character of mark 2 ILAs leads us to ask to what extent we want to stay in line with the UK-wide brand and the UK-wide scheme. I do not think that any of us is ready to take a view on that today. I would appreciate the committee's views on how we should target future support on those who need it most and on those whom we most want to draw into learning. That is a particular problem in Scotland.
I am keen to introduce a new scheme as soon as possible. We will not consider the outlines of the scheme or complete the details until the autumn or beyond. The most helpful thing would be for me to offer to come back to the committee at the end of June, or at the beginning of September, to have a discussion about the character of ILAs mark 2. I wanted to have the opportunity to record what had happened and where we were.
I hope that the minister will also touch on the points that I parked earlier with the convener.
The minister spoke about institutions of trust. We have seen the success that those who have participated in the Scottish trade union learning fund have achieved in the workplace. I hope that she will examine that as a way of engaging those whom we want to engage in a more targeted way and through institutions that can be relied on to deliver.
We must celebrate the staggering statistics that the minister has given us on assessment. Scotland is a world leader when it comes to underselling its achievements. Of course, the 3 per cent of providers—or whatever the figure is—where there is fraud must be prosecuted thoroughly. Others will be better placed than I am to do that, but we must celebrate the fact that the scheme has been such a tremendous success. I am anxious that the minister should make it clear to people how much success there has been in relation to ILAs and that the enterprise and lifelong learning department is in the process of thinking about the ILA mark 2.
On the point about what the future will look like, my vision is that there are three big challenges. One is what the plain vanilla of the ILA mark 2 will look like. That is an open question, which we should come back to discuss. The second challenge is the role that the business learning account—rather than the plain vanilla ILA mark 2—might play when there is a direct employer contribution. The third challenge, which Brian Fitzpatrick touched on, is that, if one of the purposes of the scheme is to deal with the fact that a disproportionate number of the Scottish work force do not have SVQ level 2 qualifications, one way of reaching those people is through the statutory learning representatives. We must examine how those representatives are used to encourage people to participate in either the plain vanilla ILAs mark 2 or business learning accounts. I am committed to dialogue on those three dimensions.
One of the reasons why I am not putting any of those on the agenda now is that to do so would suck the Scottish Parliament into asking, "Why are we not replicating all the work that is being done in England with the Public Accounts Commission and the Audit Commission?" The high ground for us is to let the entire process of validation, legal action and the Public Accounts Commission—which Phil Gallie will remember from his days at Westminster—run its course. That will enable us to learn the lessons without being obliged to replicate the whole process, with umpteen Audit Commission inquiries being held in Scotland. We must let the process of validation run in England, as that will give the space for those three future policy developments to take place.
Given the convener's rider, I appreciate that the minister might say that she is not in a position to answer this question. She mentioned an incidence of suspected fraud of about 3 per cent in Scotland. Is there any read-across as to how that compares with the other parts of the United Kingdom?
Not one that I can share at this stage, although I expect that there will be a comparator relatively soon. However, that is not a matter of anxiety to me.
The figure of 3 per cent relates to the number of cases, not to the amount of money involved.
It relates to the number of learning providers. A final figure cannot be arrived at while there is still discussion on whether there was inappropriate behaviour.
We have focused throughout the report on changing the whole focus in learning and on trying to get people who have been disfranchised from learning back into it. ILAs have gone part of the way towards achieving that.
I have two points that I wish to raise with you, minister. First, you mentioned targeting. Like Brian Fitzpatrick, I would like to examine targeting and ILAs, so that we can bring people back to learning. At first, we might bring them back to informal learning. We have heard how important that is and how important it is to recognise small chunks of informal learning, as that gets people on the learning ladder. I hope that it will bring people back to learning and that learning will become second nature to them. It is important that we consider targeting and working in partnership, as Brian Fitzpatrick outlined. I would like to hear your views on that, minister.
Secondly, despite the 3 per cent level of suspected fraud, I would not like us to go backwards in any way. It is important that we move forward. ILAs have been successful. They have brought many people back to learning and have enabled many people to continue with their learning. That is what this committee is all about. We should move to mark 2 ILAs quickly. We should examine how we can bring back people who are disfranchised. We could use the ILAs as a starter for six to get people on the learning ladder. That is important to the committee.
Prior to the difficulties, a number of options were under discussion; those options will now come back on to the agenda. For example, at the moment, ILAs are available from the age of 18. We have just discussed the nature of what people do between the ages of 16 and 18. Perhaps ILAs should be available from the age of 16. If we want hard-to-reach learners to come back into learning, how do we have a generous discount for people who have had no access to formal education? That chimes with the committee's notion of an entitlement of some kind. How can people who are on benefits access learning? There are a number of meaty issues that we have to discuss about mark 2 ILAs. We would be happy to come back to the committee. In its deliberations over the summer, the committee may want to take a view.
Did the evaluation of the people who used their ILAs for learning—I think that the number was 127,000—determine which socioeconomic groupings they came from? If so, that would inform the point that Marilyn Livingstone has made.
A point was made about 1,100 learning providers creating a market, but a market for what? I cannot be alone in having picked up from anecdotes the fact that people did courses in archaeology, but what market was created?
I will turn to Heather Jones on that point, not least because we are talking about the initial findings; the formal evaluation has not reached me yet, so I do not have a clue.
Heather Jones (Scottish Executive Enterprise and Lifelong Learning Department):
We have monitored uptake since the scheme started and not just in relation to the additional evaluation exercise that has just been done. That evaluation exercise was a sample survey, which sought feedback on individual learners' experience of learning. By monitoring and mapping uptake, we think that around 20 per cent of users are in socioeconomic classes D and E—the hard-to-reach groups. That is in line with some of the things that we were trying to achieve from the outset, although we provided a blanket, universal offer.
On how the scheme stimulated the market, there was support for all forms of learning, although certain kinds of learning were not incentivised—for example, learning French to go on one's holidays was excluded. There was meant to be a learning benefit, but the scheme was broad and general; it was not designed to be unduly prescriptive and rigid from the outset. People have started on the learning ladder, have gained experience and have become local delivery agents for extra skills. The scheme has been widespread and has had many uses. The original intention was not to limit it from the beginning.
I agree that the ILA scheme has been successful overall. It is because of that success that I regret the fact that we have had to abandon the scheme. I raised the issue early, as I did not want those successes to be lost. However, I have several points to make.
How many of the accounts are attributable to the 3 per cent of providers that the minister mentioned? In answer to an earlier question from me, the minister said that one new provider who had only recently entered the field had come up with something like 813 accounts, whereas a long-term provider who had been in there from the start had handled only 260 accounts throughout the whole programme. It seemed to me then that something was seriously wrong. How many of the accounts are with the 3 per cent of providers that the minister mentioned?
My concern now—and looking to the future—is that we should look for genuinely good providers who have been there in the past. That concern is based on whether they will be around to provide. I understand that the payments for a number of accounts have been held up on relatively small technicalities. The fact is that those companies have a long track record of providing good service. I make a plea to the minister that we look at those track records and ensure that payments are made to long-standing providers who now have considerable cash-flow problems.
Phil Gallie raises three issues. I shall first address the last of those, regarding people who have cash-flow difficulties. I said that those who have not yet been paid fall into two groups. In one group, there is a lack of the information that we sought from learning providers. In the other group, there are more fundamental concerns. We hope that, in cases where there is simply an absence of information, the learning providers will produce that information.
The second issue would be an unusual one for Phil Gallie and I to agree on. It is important for us to be very hard on those who have acted fraudulently. In excess of 1,000 learning providers in Scotland are doing an incredibly good job meeting a need that we want to address, and are completely aligned with our ambitions for this country. We cannot allow the tiny number who have acted inappropriately to taint what is a huge ambition for Scotland. These are judgments for the police and, ultimately, legal judgments. However, my view—which I am sure would be shared widely by bona fide learning providers—is that we should be very hard on those who try to rip off the system. We need an ILA scheme and learning providers over which there is no shadow.
The third question concerned the percentage of accounts that are with the 3 per cent of providers that I mentioned. I cannot say what that percentage is. Legal judgment must be reached on a spectrum of behaviours, as to what was inadvertent due to the newness of the system and providers not being aware of what they needed to do, what was deliberate mis-selling, and the activity that a small number of providers were engaged in that would constitute fraud in legal terms. A legal judgment will determine where those lines are drawn and where legal action will be taken, and that judgment is being made. The answer that Phil Gallie is looking for will be available shortly, once those legal judgments are made.
Thank you very much for that, minister. I acknowledge that the comments that I wanted to make are restricted, because the last thing that I want to do is to endanger any future legal action. On that basis, I shall let several points go at this stage.
There was a changeover in the administration of the scheme, from the enterprise companies to Capita. At that point the criteria and checks seem to have changed. Why was Capita allowed to change the criteria in a way that, to my mind, made validation more difficult than it had been before?
I will answer the first point and ask Heather Jones to answer the second point. Without going into detail, I appreciate that difficulties in the scheme are more prevalent in some parts of the country than they are in others. In the months ahead, my officials and I will seek to be available to MSPs. The difficulties in the scheme are simply not an issue in large swathes of the country, but they are a matter of continuing concern to MSPs in other areas. The appropriate way in which to deal with the matter is with members who have particular concerns, rather than in such an open and public forum as we have here.
I am happy to pick up on the Scottish Enterprise point. ILAs were introduced first on a pilot basis in a couple of areas and Scottish Enterprise was given the responsibility of running them. The pilots then went national and one of the issues was how far Scotland embraced the wider UK dimension. Northern Ireland, Scotland and England saw an advantage in using a common service provider, Capita, which won the contract in a straightforward legal tender procedure. The procurement issue is valid in that there was a straightforward procurement process. Capita won the tender and was given the contract on the basis of that process.
From that tendering process there were changes to the detail and to the formula of criteria used. Lessons from pilots from Scotland and elsewhere in the UK were drawn on. The movement from Scottish Enterprise running the pilots to the national scheme, using Capita as the service provider, marked a genuine point of moving from a local to national level.
Thank you for giving me so much time, convener. I will take the minister up on what I believe was the suggestion that she would meet privately to go through points separately, bearing in mind the legal implications.
I refer to Capita. Given what the minister said, is it not the case that somebody within Scottish Enterprise or the Scottish Executive should have been watching carefully the criteria that Capita used? What monitoring was done within Scotland of the way in which Capita handled the accounts?
The monitoring was the responsibility of Scottish Enterprise, through which the funds passed. It had responsibility for overseeing the system from Scotland's point of view. Whether any omissions or faults are attributable to Scottish Enterprise is a matter for the post mortem that is done. Suffice to say that the same kinds of issues have appeared throughout the UK. As it happens, Wales did not use Capita, yet many of the same problems are thought to have occurred and Wales also closed the scheme down. There are clearly generic issues that go beyond the specifics of the accountability chain.
I have an open mind on the matter. The reassurance that I can give Phil Gallie is that the UK Public Accounts Committee and the Audit Commission for England and Wales are considering the operation of this generic scheme. If issues that arise out of those very full inquiries pertain to Scotland or are relevant, I fully expect that the committee will have me back to comment on them. The indications are that those investigations will be so comprehensive that they will highlight any issues that it might be appropriate for the committee or the Executive to pursue.
I have been involved in the matter and I welcome the hard line that you are taking on those who are convicted of fraud. I hope that those who are convicted of fraud will not be eligible—at least for a period—for any other public sector procurement contracts, because they bring the whole system into disrepute.
I appreciate the information that you have been able to share with us and I understand that there are some restrictions on what you can tell us. Inevitably, some questions have been left unanswered, such as the total extent of the problem in Scotland and the value of the fraud. I would welcome the speediest move that is possible to resolve the issue, not only so that we can move to a mark 2 ILA, but so that we can restore confidence in the sector, which has been severely shaken by what has gone on. We must identify the bad apples and restore confidence in the rest. I would welcome further information on that, when it becomes available.
I want to move on to the question about who uses the service, which Heather Jones answered earlier. There was anecdotal evidence that many middle class people were using ILAs to learn French. I know of two high profile politicians who are learning French. I am not sure whether they have ILAs, but we should not discourage their efforts. In this meeting we have heard learned phrases such as "dirigiste"—it would cost £150 of ILA to teach you that, Alex.
Universality should be retained. Wherever possible, we want to target needs throughout the education system and lifelong learning. I feel that the universality of the approach that was adopted was part of its success, but more information is necessary to support that point of view. I suspect that the universality of the ILAs made them successful in creating a culture of learning, which is what we mean when we talk about entitlement in our report. I would like further information on whether that was the case, so that we get it right when we move to the plain vanilla or the raspberry ripple, for example, of the mark 2 ILA.
I must reveal that I signed up to do the European computer driving licence course through my ILA, but that got put on hold with everything that happened. That course was eligible for the information technology discount. I commend it to others in the future, although perhaps not discounted.
The role of learndirect Scotland was one of the reasons why the scheme was so successful. The scheme's success was intimately linked to the 5 million hits on the learndirect Scotland website. The other part of the learndirect Scotland equation is the 300 learning centres that it operates. It continues to operate those centres in spite of the difficulties with ILAs. Half of those learning centres are in social inclusion partnership areas or hard-pressed areas. That record is not matched in other parts of the United Kingdom. When the committee examines ILAs, it should celebrate the role of the Scottish university for industry. We spend £1.3 billion on further and higher education. SUFI has created 300 learning centres and generated demand with relatively small amounts of core funding—about £35 million a year. We must take account of that fact when we look at the totality of the scheme and the success of ILAs in attracting non-traditional learners.
Rather perversely, it is worth looking at some of the techniques that were used by people who were involved in inappropriate activity. They managed to sign up many people, partly by targeting people door-to-door. People were convinced of the benefits of the learning. The problem was that the learning was not there when they turned up to receive it. Perversely, we can learn quite a lot from the way in which the people who were involved in inappropriate or blatantly fraudulent activity went about selling learning.
Far be it from me to say this to a Conservative, but the level of competition in the creation of that market undoubtedly created levels of innovation that it would be difficult to envisage with a monopolistic provider. The scheme was a classic example of learner centredness. Increasingly, the product was designed around the needs of learners. We want to learn from that. The evidence from the scheme bears out the committee's instinct that we need a system that is slightly less planned and slightly more flexible. There is a separate issue about which market we are trying to serve. I share David Mundell's view.
Before we respond to you with our views on ILAs mark 2, it would be useful if we received a copy of the evaluation report when it becomes available.
I have not seen the evaluation. I ask Heather Jones what the likely timing is for its receipt by ministers.
It will be in the next couple of weeks.
In that case, I will happily send a copy to the committee.
I thank the minister and her officials for a worthwhile morning. Their evidence is much appreciated.
We now move into private session for agenda item 4, which is to discuss the final lifelong learning report.
Meeting continued in private until 12:50.