Individual Learning Accounts (Hansard, 1 November 2001)

§ Lord Davies of Oldham
My Lords, the individual learning accounts programme has exceeded all expectations and has expanded beyond its capacity. Recently we became concerned that a number of companies were misselling ILAs and that some people were being pressed to sign up for low value, poor quality learning. We decided to act quickly and without consultation to protect the interests of individual learners and to protect public funds. We shall introduce a further scheme following extensive consultation.

§ Lord Pilkington of Oxenford
My Lords, I thank the Minister for his reply. Can he be more precise and tell me the exact date when the department knew that fraudulent applications were being made?

§ Lord Davies of Oldham
My Lords, it is a large programme with some 6,000 providers. Complaints were received from the first month of the scheme's operation but they were in single figures. That is to be expected of any scheme of this kind. However, in the summer the complaints reached such a figure that it was decided to strengthen the scheme. However, that did not result in a reduction in the number of complaints and, consequently, we took the action that I mentioned.

§ Baroness Sharp of Guildford
My Lords, as I believe the Minister said, over 6,000 complaints were made before the scheme was withdrawn. Were any monitoring procedures in place? What kind of prior registration and evaluation of providers was required?

§ Lord Davies of Oldham
My Lords, we should recognise the uniqueness of the scheme. It is driven by student demand. The whole concept behind it is that the student purchases the appropriate course on the basis of the resources made available to him or her. Therefore, the individual took responsibility for signing up to a course. At the point of enrolling on a course students were advised to contact Learndirect—that is a key element of government advice—to seek advice on the validity and value of courses. We sought to attract a group of people who do not ordinarily participate in learning. We tried to create as flexible a system as possible with the absolute minimum of bureaucracy. That was the basis on which the scheme operated.

§ Baroness Blatch
My Lords, is it not staggering incompetence on the part of the department not to have tackled fraudulent applications before now? Is it 1516 not even more staggering that on the same day it was announced that the ILAs were to cease being awarded a document was produced by the same department which pledged to continue and expand them?

§ Lord Davies of Oldham
My Lords, the Government have pledged to introduce a new scheme to meet what we all recognise is exceptional demand. We have provided resources for a target of I million learners by March next year. That target was reached in April this year. At present there are 2.5 million learners on the scheme. The demand reflected what we have long anticipated; namely, that there is an enormous demand for properly constituted learning. As regards the vast majority of the schemes which are put forward, both public and private providers are thoroughly reputable and the vast majority of learners have had an extremely satisfactory experience.

§ Baroness Massey of Darwen
My Lords, is it not encouraging that so many learners have signed up to the scheme? What is its future?

§ Lord Davies of Oldham
My Lords, the future is clear. The Government have indicated that a major element of our programme is to expand the provision of education for mature learners. I believe that every Member of this House will be astonished at the figures I shall mention. The Government expected a million students to undertake the courses. Our target was reached almost a year earlier than anticipated. Some two-and-a-half times as many people as anticipated are eager to participate in learning provision. 'That shows a demand which in the past was pent up and was not met in nearly two decades of the previous administration. Our policies reflect that great demand for learning. In the future the Government will introduce a new scheme to meet the requirements of learners.

§ Baroness Miller of Hendon
My Lords, does the Minister accept that he has made a mistake in what he has just told the House? That document came out with a letter on 22nd October. The document said that ILAs were to be extended. It said nothing about a new scheme or a new system. Within the week, the ILAs were suspended. That is the reality of what has happened.
What about the genuine providers and students? What are they to do in this lapse? I should like the Minister to answer that, but please do not forget my first question.

§ Lord Davies of Oldham
My Lords, I certainly shall not forget the noble Baroness's first question. The Government acted dramatically on one day because public money and the interests of learners are involved. In circumstances in which we had evidence of real fraud being conducted it was important to bring it to a halt immediately, hence the Government's immediate decision to suspend the scheme. Let me make the future of the issue clear. Those students who sign up for learning before 7th December will have 1517 their positions honoured. The same applies to providers. However, where fraud has been clearly detected, it would be remiss of the Government to allow the scheme to persist, to the loss of public money.