Individual Learning Accounts (Hansard, 7 February 2002)

§ 4. Mr. Mark Simmonds (Boston and Skegness)
What measures she will take to ensure that the lack of quality assurance that led to fraudulent use of ILAs is not reproduced in successor schemes. [31403]

§ The Parliamentary Under-Secretary of State for Education and Skills (John Healey)
Quality assurance methods will be built into the successor scheme to individual learning accounts. A range of options will be explored as we develop the new programme.

§ Mr. Simmonds
Does the Minister agree that the lack of quality assurance and monitoring structures in the ILA scheme led directly to a scandalous and probably fraudulent abuse of taxpayers' money? There has also been a shocking and detrimental impact on service providers and recipients, and a terrible impact on people who benefited from ILAs.

§ John Healey
The hon. Gentleman is right to the extent that the picture is complex. It is increasingly clear that the lack of quality control measures contributed to the problems experienced by the ILA scheme. There is widespread agreement that pre-registration checks of learning providers need to be strengthened. We will draw the lessons of the ILA scheme. That will help us to set appropriate quality control measures for a future programme. However, I caution him about the need to balance greater protection for the public purse with simplicity for the learner and limited bureaucracy for the provider.

§ Jeff Ennis (Barnsley, East and Mexborough)
When does my hon. Friend anticipate announcing the successor to ILAs, and what role does he envisage for local learning and skills councils in the successor scheme?

§ John Healey
My hon. Friend, who serves on the Select Committee on Education and Skills, will acknowledge that the ILA scheme was innovative and important in many respects, but there are important lessons for us to learn. We are undertaking a consultation with all learning providers under the scheme, with partners who have an interest in the future of the programme, and with learners who opened ILA accounts. I know that he will find this frustrating, but it is too soon to say with certainty when we will be able to relaunch the scheme. Above all, there is a need to get to the bottom of what went wrong before we can make sensible decisions about the shape of the programme for the future.

§ Mr. Paul Goodman (Wycombe)
Is it not clear that the Government were warned about the likelihood of fraud in the system as early as summer 2000? What does the Minister have to say to my constituent Stephen Good, a legitimate ILA provider who has had to place his property on the market because of the Government's incompetence and complacency? When will he be told when his situation will be rectified?

§ John Healey
In the preparation of the ILA scheme and its introduction in autumn 2000, we had discussions with a wide range of partners. We had to strike a balance in the design between control and quality assurance methods and a non-bureaucratic system that was easy for the learner and the provider. With hindsight, as I acknowledged in response to the hon. Member for Boston and Skegness (Mr. Simmonds), it is clear that the quality assurance arrangements were simply not good enough. That part of the system will be stronger for the future scheme. A small number of unscrupulous learning 1016 providers undermined and abused the scheme. I take the constituent of the hon. Member for Wycombe (Mr. Goodman) to be a legitimate provider who, like many others, made much of the scheme to benefit a range of learners across the board.

§ Mr. Derek Foster (Bishop Auckland)
Does my hon. Friend agree that the glee shown by Opposition Members—[Interruption.] There is perhaps synthetic anger too, but is not their attitude symptomatic of the reasons why the public service cannot be innovative? We did the same when we were in opposition, so I am not making a cheap party political point. The individual learning account was a superb and innovative scheme that put purchasing power—Opposition Members should be pleased about this—in the hands of the individual learner, thereby giving them the power to shape the content of their learning. I share my hon. Friend's dismay about the administrative problems and urge him—

§ Mr. Speaker
Order. The right hon. Gentleman's question is far too long.

§ John Healey
I do not want to underestimate the scale or nature of the problems, including those that we are unearthing in our investigations. My right hon. Friend is right that the scheme was important and innovative and put power in the hands of learners for the first time. That is part of the reason why the scheme in its short life encouraged new learners and people who were returning to learning for the first time. It is also part of the reason why one in six of those who used ILAs had no previous qualifications and why one in four had not done any learning in the previous year. He may not be aware that the Learning and Skills Council agrees with his analysis and in yesterday's Select Committee hearing described the ILA as the single most successful attempt to attract new learners.

§ Alistair Burt (North-East Bedfordshire)
Is it not the case that the simplicity and innovation of the scheme went so far as to ensure that the only criteria that the learning provider had to offer the contractor to gain access to Government money were a name, address and telephone number, and details of the bank account where the cash was to be sent? No other validation whatever was required. Is not the story very simple? The Government set up the ILA scheme and were warned about possible abuses, but ignored those warnings. They encouraged new providers into the market, but when the abuses became so obvious that they could not be ignored, they announced a date for the closure of the scheme. Then they brought forward even that date, prematurely ending the scheme and closing it overnight, leaving millions of pounds owed to providers and breaking faith with thousands of students who expected to go on courses. They also caused job losses, company failures and a disastrous loss of confidence in decent adult education initiatives. Can he hazard a guess as to whom the public hold responsible for this scandal, and will he meet some of the learning providers face to face, so that he can explain to them precisely what he intends to do about it?

§ John Healey
I have met learning providers face to face. Officials in the Department are in constant contact with them and, as I explained to the hon. Member for 1017 Boston and Skegness, we are undertaking extensive consultation to draw on their experience to help us to design the future scheme. The hon. Gentleman is right about the registration of learning providers: it was registration, and it was clear from the outset that it was not a quality assurance stamp of approval from the Government on either the provision or the provider. As I have explained, that is something that we will have to change in a successor scheme.
On the decision that we very regrettably had to make to bring forward the closure of the scheme from 7 December to 23 November, it must be becoming increasingly clear to the hon. Gentleman that not to have taken that decision with immediate effect would have risked substantial loss of public funds. That was the reason that we took the decision, and that is why it was the right decision to take at that time.