The current Individual Learning Accounts scheme has collapsed amid a fiasco
of criminal allegations and recriminations. But many training professionals
hope that its principles can be salvaged from the wreckage to rebuild a better
structure. Elaine Essery reports
Disappointment, but not surprise, seems to be the consensus reaction to the
suspension of Individual Learning Accounts.
As details of the extent of the fraud, the lack of budgetary control and the
financial damage to genuine providers unravel, stakeholders are asking
questions. What did the scheme achieve? Where did it go wrong? What should
It is almost inevitable that such an initiative will attract champions as
well as charlatans in its early stages.
But because the ILA scheme failed to work initially does not mean that the
idea is flawed.
The original concept was that ILAs were a partnership between the
individual, the employer and the state.
The wider vision was that with appropriate checks and balances to support
the disadvantaged, they would be the mechanism used largely to fund all post-16
– or certainly post-18 – education.
Most believe that the principle was right and the vision sound, even if the
implementation proved faulty.
While no replacement is on the horizon as yet, there is widespread
encouragement by solid guarantees from ministers that the spirit of ILAs will
be taken forward.
"The principle of the ILA is great and the risk is that you throw the
baby out with the bath water," says Michael Davis, MD of the Centre for
"What ILAs did – probably more symbolically than actually – was to
allow individuals to be champions of their own learning, which is really
"The idea that you were going to be sent an annual statement saying how
much you had invested in your learning over the last 12 months was, I think,
Mick Fletcher, research manager at the Learning and Skills Development
Agency, agrees. "The one thing the Government got absolutely spot-on with
ILAs was that it moved away from the idea that they were vouchers, but treated
them as a cash-based account – just like an airline’s account of someone’s
travelling, against which they give air miles," he says.
Fletcher believes the Government is right to suspend rather than abolish
ILAs, although they may need relabelling, he says.
"There has always been a bit of starry-eyed idealism around the edges
of ILAs," Fletcher claims.
"There was not a very robust system for checking on potential
providers, which is surprising. You wouldn’t need to be a rocket scientist to
make it a bit more secure."
One answer would have been to restrict the scheme at the outset to the list
of providers already rigorously checked and approved by the Learning and Skills
"I hope the Government decides that ILAs were a great idea and gives
the LSC a significant role in implementation," Fletcher says.
"There needs to be more joined-up thinking between local LSCs and
Indeed, the route taken in Wales was essentially to localise the scheme.
ILAs do not appear to have been abused and are still operating there.
Fletcher rejects as "misplaced" criticism that the scheme did not
reach those in greatest need.
"It wasn’t clear in the first year just what the scheme was for. There
was a suggestion that certain groups ought to have priority, but it wasn’t a
requirement," he says.
"I read the first year as testing whether we could establish a national
scheme, and on that basis it was a substantial success, with well over a
million account holders. You don’t have to concentrate ILA ownership on the
poorest to nonetheless move in the right direction."
The TUC reports that the use of ILAs was building up and extending across
unions and across the workforce.
Liz Smith, national officer at TUC Learning Services, says, "There has
been wide use of ILAs within unions’ lifelong learning strategies. They have
proved to be a useful tool for union representatives to get members of the
workforce back into learning.
"We are looking more closely at how they were used and assessing the
impact their suspension will have on the work of unions in promoting learning.
"One thing we’re finding is that the members’ unions encouraged to open
ILAs were almost entirely from the groups the Government would want to target –
substantially those at or under NVQ level 2, the low-paid, women returners,
with a fair proportion of self-employed, those working for SMEs and from ethnic
Bill Lucas, chief executive of the Campaign for Learning, supports
Fletcher’s view. "It wasn’t as if ILAs didn’t reach some of the less easy
to reach people. They didn’t reach the most difficult to reach, but they were
never intended to do that.
"At least 20 to 30 per cent of the well over a million learners who
opened an account were from non-traditional groups or those who would
historically define themselves as non-learners – that’s a good
Lucas adds that a comparable scheme introduced in the US attracted only a
He and Fletcher are unconvinced that the financial model on which ILAs
operated was the most effective, yet remain committed to the principle.
Fletcher would like to see a programme for developing ILAs over four or five
years, with the intention of making it a universal system capable of targeting
individuals rather than broad categories.
One model he advocated was to put up course fees for those who can afford to
pay, using ILAs to sugar the pill, and using that to channel more support
towards the most needy, perhaps by offering free courses. Non-financial factors
play a key part too, Lucas points out.
"For some people, money is critically important, but for the most
learning-resistant people and for those who don’t even have a bank account, an
ILA isn’t going to be the main motivating factor," says Davis.
"They’ll need interest, information, advice, guidance, support and peer
Davis adds, "Lack of good quality information, advice and guidance
leaves the door open to fraud. That’s how providers manage to pull off wheezes
because people don’t know what’s bad value."
As for the way forward, some believe it is a case of revisiting the big
vision and forging ahead with three types of ILA which were found to work
during the testing period: collective learning accounts, small firm accounts
and large company accounts.
Each was developed by the DfES, working in partnership with the TUC under
its Bargaining for Skills pilot, the Centre for Enterprise and the Campaign for
From the TUC’s point of view, keeping the individual at the heart of an ILA
scheme is a good thing.
"But," says Smith, "in the context of learning at work, what
the union movement was able to do was use the collective strengths of the
organisation to get the best out of the system for the individual and to support
Smith wants to see a thorough analysis of what ILAs did and did not achieve
and hopes her organisation will be fully engaged in the debate about what
"What needs to emerge is a better-regulated system which makes learning
affordable to those without the cash to pay for their own learning and reaches
those who need to be encouraged back into learning, and one which also levers
in money from employers."
A project to promote ILAs to small firms sought to inform company representatives
what was on offer and to use these "learning champions" to encourage
staff to take up ILAs.
The value of the account was boosted by £50 if the learning could be shown
to be in the interests of both individual and employer.
"Workforce development needs to take place in the context of business
development and small firms should be rewarded for doing it," Davis
"Any reform of ILAs should make small firms one of the target groups.
Forty-four per cent of non-Government employment is in companies employing
under 50 people, so unless you come up with some instrument for small firms, 44
per cent of the workforce runs the risk of being left out."
While working to develop a large-company ILA model, the Campaign for
Learning discovered that large companies were often pleased to offer support in
ways which included giving out information, creating an internal helpline,
running an internal communications campaign and putting in some of the
company’s own money. Some created their own employee development schemes,
allocating an amount of money and, in some cases, time, for learning
"I think the way forward is to go back to the radicalism, but meanwhile
try and make these three ideas work well and move from early pioneers to
mainstream adopters," says Lucas.
"Here is also a real opportunity to address the quality issue and build
an understanding of what learner-centred learning means.
"The Campaign for Learning challenge here is to make this an
opportunity to create a new framework for judging when learning is being
provided in a style, format and place that suits the individual’s needs. It’s
certainly an LSC issue.
"We’ve also got to get better at assessing and accrediting prior
learning and at assessing the learning providers who aren’t part of the inner
He concludes, "I’m quietly optimistic that the Government will adopt
some form of what we are advocating."
The shutdown shockwaves continue…
– ILAs were suddenly withdrawn on 23 November 2001 – two weeks
before the previously announced closure date. It had come to light that account
numbers obtained from the official database of those who had signed up had been
stolen and were being offered for sale.
– Junior education minister Baronness Ashton said there were 84
registered learning providers about which the DfES had received a large number
of complaints and had serious concerns over. In all 8,448 complaints had been
received about ILAs.
– To date at least 39 people have been arrested and one charged
in connection with ILA irregularities.
– The budget for the scheme was originally set at £202m, but
recent figures suggest that it has been overspent by £58m.
– 47 providers have been suspended from the register of
organisations operating ILAs out of 8,500.
– One provider is itself taking legal action to recover over
£300,000 claiming it was unable to abide by rules on student enrolment as DfES
failed to send the necessary forms.
– Training providers have met with cross-party MPs to lobby for
a full investigation by the Parliamentary Ombudsman.
– The National Audit Office is to investigate ministers’
handling of the scheme.