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Public Accounts Committee Reports

Part of Committee Business – in the Northern Ireland Assembly at 3:45 pm on 29th September 2009.

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Photo of John Dallat John Dallat Social Democratic and Labour Party 3:45 pm, 29th September 2009

I wish to focus on the PAC report on financial management in the colleges of further education prior to the reorganisation into six regional colleges in 2007. I will try to explain why I believe that that was a very important report. It outlines a classic example of hands-off bodies stashing money that they do not need and which could be spent on providing educational services that are in great demand and under pressure.

A total of £44 million was in the vaults of six colleges, doing nothing for the people for whom it was intended. It fails me to understand why those colleges could not find a use for that money to improve the educational prospects of people who look to the colleges of further education for a second chance to learn skills that would improve their prospects of getting a job, or, indeed, developing their skills to get a better-paid and more secure job. If those colleges were so well heeled, they could have handed the money back so that it could be used to fund front line services, such as the Health Service, which was starved of money.

The report found that senior management teams in the pre-regional colleges were not equipped with the skills and experience necessary for financial governance responsibilities. That was a damning indictment of the Department, which should have ensured that recipients of public money had the basic skills in how to manage it. If there is any good news from the report, it is an undertaking from the Department — given only last week — that in future, no more than 10% cash balances will be retained. The Public Accounts Committee welcomes that.

In trying to understand how so much money could lie idle in bank accounts, the PAC discovered that the Department was negligent in several ways. Monitoring reports were frequently submitted late with no penalty, and no action was taken when the reports flagged up serious financial practices. The Department, I am glad to say, has given an assurance that improved governance arrangements have been put in place for the six new colleges; however, I have to question that because problems have arisen in the new Belfast Metropolitan College, and the Department has not been able to explain why.

Speaking personally, it is a great source of frustration that, after the PAC devoted a great deal of time and energy to scrutinising reports produced by the Comptroller and Auditor General, we find that our recommendations are frequently ignored. That suggests that greater penalties are needed to ensure that the PAC is fully effective in the job that it does — and does with great commitment.

It would be remiss of me not to spell out how serious the incompetence of the colleges of further education has been and how their lack of financial management skills has affected the people who should benefit from the services that they are supposed to deliver. One quarter of the total population between the ages of 16 and 64 lack basic skills — skills that may just make them employable at a time when unemployment has doubled in the past 12 months. Those who are in employment could have upgraded their skills and gone on to obtain more highly skilled jobs that would be less at risk in the present economic downturn.

I have often said in the Chamber that education is the greatest weapon for resolving inequality and offering political stability. I declare an interest in that I owe my further education to the technical college in Coleraine, and I have nothing but admiration for the people who have delivered vocational education there to many students for more than 70 years.

The case of Fermanagh College of Further and Higher Education, which was covered by the Committee’s report, was particularly worrying. Fundamental breaches of public accountability and basic financial mismanage­ment resulted in the college having to repay more than £1 million of improperly claimed funding. That money had been claimed before class numbers had been finalised. Clearly, there was no clear leadership or sense of strategic direction at the college.

It is gratifying that the Department for Employment and Learning has responded to the Committee’s concerns with a review of governance arrangements. The Department has also undertaken to effectively communicate lessons to all the colleges through a programme of health checks, which are to commence before March 2010, with a workshop for all college senior managers to take place this autumn. Further training programmes are to take place in the future.

I wish to put on record my personal thanks to the former Comptroller and Auditor General Mr John Dowdall for his outstanding contribution to tackling financial irregularities, poor service and, indeed, fraud in public bodies. He was extremely concerned about the rights of the people whom I mentioned at the beginning of my speech, the 25% of people who lack basic skills and who could have their lives transformed if colleges of further education were to make best use of the resources that they are given.

Stashing the money in the vaults was a serious injustice. Let us hope that the publication of the report will mean that never again will that kind of embarrassment hang over the Assembly. In future, let us hope that FE colleges will be known for their students’ successes and that the great history that they have had will be restored. That can happen only if the people who work in those institutions have the financial support and expertise in the future that they clearly did not have during the time that I have just spoken about.