Training and Enterprise Councils Training and Enterprise Councils (Hansard, 12 March 1991)

§ Mr. Ray Powell (Ogmore)
I beg to move, That leave be given to bring in a Bill to provide for full public disclosure of the financial affairs and administrative decisions of training and enterprise councils. I should like first to thank my hon. Friend the Member for Jarrow (Mr. Dixon) for sitting up half the night to obtain this spot for me this afternoon.
I sought to introduce the Bill after having read a copy of a letter dated 12 December from the permanent secretary to the Department of Employment, Sir Geoffrey Holland, KCB, to all TEC chairmen about the first internal audits of TECs. The letter gives the findings of the first five audits of fully operational TECs. Sir Geoffrey Holland said that, because of the weaknesses in financial management that they reveal and the disquieting overall picture, he was drawing the matter to the attention of all TEC chairmen.
The second paragraph says: I attach a detailed note of the main weaknesses revealed. But the picture that emerges is one in which financial control weaknesses have led, and could continue to lead to substantial levels of overpayment of public funds either to individual Councils or by the Councils to providers. The Public Accounts Committee would not regard such a situation as satisfactory. And I write primarily because I am anxious that you should be able to defend yourself before the Public Accounts Committee should they call you at any time. Sir Geoffrey Holland went on to say: I attach to this letter a detailed note of the audit findings but you will see that the weaknesses centre on: a. claims by the Councils which could not be supported by adequate documentary evidence. b. claims overstated by the inclusion of expenditure which was outside the terms of the contract; c. attendance records not being properly maintained by Training Providers: d. financial appraisal and monitoring of providers not being carried out; and e. excessive working capital loans and substantial cash balances being held. It is very probable that these same issues are occurring at other operational Councils which have not yet received a visit from my Internal Auditors. That letter from the permanent secretary, Sir Geoffrey Holland, shows that Parliament needs to review the present position of TECs.
How many right hon. and hon. Members realised, when the White Paper "Employment for the 1990s" was announced, that the TECs would slip through the back door of Parliament without a Bill, without a Committee, without the usual scrutiny by Members, with no real debate or meaningful consultation, thrown together by devious means and given authority to spend some billions of pounds of taxpayers' money?
The Department of Employment said that the management of those bodies would be run by a board of at least nine but no more than 15. At least two thirds of the directors, including the chairman, must be local business leaders from the private sector who are chairmen, chief executives or top operational managers at local level or in major companies.
The composition of the boards and the reasons for the directive need careful scrutiny, because those are the very people whom the Department of Employment has been attempting over the years to encourage to introduce 814 training in their companies and who have constantly and continually failed or, in most cases, never even attempted to introduce any company-run training scheme.
It is passing strange, to say the least, that, as soon as the Government are prepared to pump money into new schemes, those overworked, busy, pressurised managing directors become interested overnight. Within 12 months, from March 1989 to March 1990, there were 65 potential TECs, with 600 directors or managing directors on their boards of management, all taking a new-found interest in training.
So what was the purpose of the transformation from employment training to training and enterprise councils? Was it to benefit the training programme, to provide better trainers, to give more and varied opportunities for trainees, for all the training managers to have sufficient funding to provide adequately for the training and expertise needed in the changing modern industrial world, or to help get through the recession and meanwhile provide a trained work force to overcome the challenge in the aftermath of the recession?
Alas, it was nothing so ambitious, nothing with such forethought and constructive imagination. TECs were created to give private sector employers, backed by specially selected civil servants, the opportunity to run down what some training managers have taken a decade to build, and to destroy the whole concept of devoted trainers training trainees with patience and care, to enable them to develop and maintain a rightful, dignified position in the employment of their choice, with skills to maintain themselves and their families and to be of use to employers and their country in future.
The training structure has been replaced with a system which caters for the concept of greed and malicious manipulation. Having rid themselves of the real purpose of training, the Government have replaced it with a system which directs funding and training places to their own firms, for personal greed, with easy backhand treatment of civil servants administering the system and without parliamentary scrutiny, with the excuse of plc cover to avoid answering the questions of hon. Members.
It is frightening to think that Parliament, with all its Select Committees to scrutinise the executive, has been hoodwinked into allowing such a system to be established. Already, 6,000 experts in training have been made redundant as a result of the £350 million reduction in Government spending on adult training—at a time when unemployment has been increasing constantly for 10 consecutive months.
The position is even worse when redundancies are particularly severe for the trainers in the voluntary sector. One group, Community Industry, specialising in training for special needs, has already declared 1,000 staff redundant. The National Association for the Care and Resettlement of Offenders has already had notice that 10 of its projects will not be funded, and more are to follow. Places with many and varied organisations all around the country are being cut.
The Secretary of State for Employment, having cut the budget by £350 million when TECs were introduced, announced on 26 February—no doubt aware of the general election round the corner—that an extra £120 million would be made available to TECs. There is a need for more funding, but with proper financial scrutiny, 815 especially by Parliament, to prevent trainees being sent to TEC boards and companies in collusion with their chief executives and other officers.
In Mid Glamorgan TEC, the chief executive officer, Mr. Alan Williams, has decided to cut a training organisation of 10 years' standing that trained 4,000 trainees. It was recognised throughout the Principality and praised by Ministers and others for a well conducted, organised and efficiently managed scheme, but Mr. Williams claimed that the organisation did not meet the training standards set by TECs. At the same time, he spends thousands of pounds advertising for new training managers whose training is not accessible, because they have yet to establish themselves. The places are brand new, or are in firms in a list approved by him or others.
The whole system lends itself to the possibility of great corruption. Private firms seem to have all the advantages. We need to know who makes decisions and on what basis decisions are made. Who receives the funding? What amounts do they receive? Hon. Members must be able to question everyone involved. All TEC meetings should be open to the public.
I am given to understand that, when the Mid Glamorgan TEC board met at 8 am on Tuesday 19 February, there was a decision of no confidence in the managerial staff. Yet they are still there. Why? Have they something to say, so they stay? Even the right-wing Bow Group of the Conservative party is pressing the Government to make sweeping changes. Phillip Virgo, the author of the report, recently claimed that the Government should ensure the quality—

§ Mr. Speaker
Order. The hon. Gentleman has already had his 10 minutes. Will he please bring his remarks to a close?

§ Mr. Powell
—and relevance of current training bodies such as the training and enterprise councils, through the regular publication of performance figures, student placements and employment satisfaction. That accountability is what my Bill aims to achieve.