Individual Learning Accounts

Part of the debate – in Westminster Hall at 10:59 am on 11th December 2001.

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Photo of Richard Bacon Richard Bacon Conservative, South Norfolk 10:59 am, 11th December 2001

My hon. Friend makes an excellent point. I spoke to another training provider who asked precisely the same question about whether he should hold on to his employees. He was a computer manufacturer who had branched out into training because he saw that it was a good fit in terms of his business. His employees are relatively lucky, as there is at least a possibility that he will be able to retain them. That is not the case with all the providers. Even the business man to whom I referred said that he wanted clarity above all. He wanted clear information about what would and would not happen so that he could begin to make decisions. I am sure that the same is true of my hon. Friend's constituent in Wycombe.

Genuine providers have been besmirched by rogue traders. The real providers are varied and include big and small businesses. Mr. Neil Avery, who is part of the Hairnet computer training network, wrote to me from Taverham, near Norwich. Since January, he has trained 33 people who have opened ILAs in the Norfolk area. His success stories include a 21-year-old hospital cleaner from Norwich who wanted to improve her employment prospects, a disabled elderly lady from Norwich who can now keep in touch with her extended family through e-mails and the internet, and, I am reliably informed, a Norfolk county councillor who can better serve the community because she can now use computer technology.

The Internet Exchange was founded in 1994. It runs 38 stores throughout the country, from Glasgow to Southampton; from Cardiff and Bristol to Cambridge, as well as in London, where the company is concentrated. Many of the stores, especially in London, are in deprived areas. Indeed, of the 34 stores in England, 25 are located in wards that feature on the Department's list of the 2,000 most deprived English wards.

The Internet Exchange has invested in training and worked with organisations such as the British Computer Society and the Training Standards Council to ensure that its training is of the highest quality. It has a diverse customer base: 51 per cent. female, 49 per cent. male, 45 per cent. ethnic minorities, 15 per cent. lone parents, and 35 per cent. unemployed or looking for work.

Hon. Members may hear more this afternoon about Henley Community Online at a meeting in Portcullis house. It is a not-for-profit company that offers computer and internet access. Two hundred and twenty people currently participate in its courses. Like the constituent of my hon. Friend Mr. Goodman, the people who run Henley Community Online are worried about what will happen to them and their employees.

Carrerra's is part of the Digital Network group, which is based in the west midlands. Between 40 and 50 per cent. of its customers are either disabled, elderly or unable to train during the day. It has taken on an extra 40 staff and invested in training them in software at a new training centre, so that customers can have a high quality training experience.

All those people were doing the right thing; they were doing what the Government asked of them. The Government owe them tens—in some cases, hundreds—of thousands of pounds. What will happen to them? Will they go to the wall because the Government did not have the common sense to get rid of the rogue providers at the beginning? Must they put their staff on the streets and thus add to the Government's unemployment bill? Will they get the money that they are owed? Will a new Government scheme emerge? If so, when? In a nutshell, what steps are the Government planning to restore confidence in the training sector? We look to the Minister for clear, specific answers.

The Government have created an environment in which the genuine training providers distrust them, and the most vulnerable customers—those whom the Government are trying to help—are scared off by stories of rogue providers. Mr. James Golfar of the Internet Exchange wrote in his response to the closure of the ILA scheme that the Department's explanation to clients of the scheme's operation was poor. Many were unaware that the cards were issued by the Department, not learning providers. They thus wrongly blamed the learning providers for problems in their application process. Some, especially those for whom barriers to learning were high, became confused and disheartened as their applications were lost or rejected unfairly, or when unscrupulous providers took advantage of them. Yet the scheme was designed to help those people above all.

The Minister and his colleagues should not underestimate the good will and trust that have been destroyed by the debacle. I hope that the Minister realises that the Government face a crisis of confidence among legitimate, community-based training providers and that warm words will not be enough. We need specific proposals from the Minister about the steps that he plans to take. The Government should be in no doubt that there is precious little hope of helping the most vulnerable people if they do not restore confidence among those who can do the most to help, namely, the legitimate training providers.

I must mention the taxpayer's plight. I am grateful to the Minister's office for supplying me with the figures yesterday. However, as a member of the Public Accounts Committee, I cannot say that they are pleasing. I have written to Sir John Bourn, the Comptroller and Auditor General, and to the Chairman of the PAC, asking for ILAs to be examined urgently.

According to the figures that the Minister supplied me with yesterday, the Department budgeted £202.1 million for the ILA scheme over the two years 2000-01 and 2001-02. That includes the Department's budget allocations and £115.1 million which has been recycled from training and enterprise council resources. Department records show that expenditure on the programme in 2000-01 and 2001-02 to 23 November totalled £260.9 million. That is an overspend of £58.8 million up to that point.

The Minister said in his communication to me that significant payments are due for claims that learning providers have already made, and for committed expenditure for learning that providers on the ILA centre system booked before it was shut down on 23 November. He also stated that the police investigation into abuse and fraud means that access to the ILA centre system is not available and it is therefore not possible to estimate the additional financial commitment. That is a scary remark.

The Government know about an overspend of approximately £60 million so far but do not know how much more is to come. They have ignored the warnings of experienced professionals before and since the scheme was launched. They have also ignored many warnings in the press, and lost the trust of the genuine training providers without whom they have no chance of achieving their goals. They have been reckless with taxpayers' money and the people who suffer most are ironically those whom the Government most want to help.

The Government have a lot of answering to do. I look forward to the Minister's reply.