Official Report (Hansard)

Quality Improvement Strategy

10 October 2007

Members present for all or part of the proceedings:
Mr Jimmy Spratt (Deputy Chairperson)
Mr Alex Attwood
Mr Nelson McCausland
Mr David McClarty
Mr Basil McCrea
Mrs Claire McGill
Mr Robin Newton
Mr Alastair Ross

Witnesses:
Mrs Catherine Bell ) Department for Employment and Learning
Mrs Nuala Kerr

The Deputy Chairperson (Mr Spratt):
I remind those in the public gallery that as they affect the recording equipment, mobile phones must be completely switched off; they should not merely be turned to silent.

Before we start the evidence session on the quality improvement strategy, I will thank Catherine Bell Nuala Kerr for their attendance. The Committee appreciates the fact that the Minister sent it a letter bringing it up to date on the position with Carter and Carter plc. Members are greatly concerned about that issue, so will you bring us up to date on it?

Mrs Catherine Bell (Department for Employment and Learning):
Nuala Kerr has been more closely involved with that issue than I, so I will ask her to give the update.

Mrs Nuala Kerr (Department for Employment and Learning):
The position is as the Minister’s letter conveys. Trading in shares of Carter and Carter plc was suspended on the basis that its profit forecast for the end of July 2007 was substantially lower than had been originally anticipated. If you recall, there had already been two profit warnings. According to the press, PricewaterhouseCoopers, which is the company’s auditors, has been invited to assess the reason that situation has arisen. That signals to the Department that the company has significant financial issues.

However, Carter and Carter plc is not currently in breach of its contract with the Department for Employment and Learning (DEL). DEL has met with the company and received assurances that, in the short term, it expects to be able to deliver the training in accordance with the contract. It is not known what will happen in the longer term.

The Minister’s letter outlines the numbers of young people that are involved in training and that the contract is progressing satisfactorily. As would be expected under the terms of the contract, there will be no change until such time as something significant happens with the company.

The Deputy Chairperson:
Is everything running according to plan?

Mrs Kerr:
Yes.

The Deputy Chairperson:
I am sure that members want to ask questions about the matter.

Mr Attwood:
I am surprised that the Department has such a relaxed attitude to the matter — alarm bells should be ringing.

Are you telling the Committee that the Department has assessed, with due diligence, the current position with the contract and that all aspects of it are satisfactory?

Mrs Kerr:
Yes.

Mr Attwood:
Can you be absolutely definitive that the Department has no problem whatever with the management of or the progress of the contract?

Mrs Kerr:
There are two separate issues. The first is the company’s financial situation, and the second is the delivery of the training and the contractual relationship between the Department and the company. At this stage, the Department has no concerns about the contractual delivery; we believe that the contract is being delivered in accordance with our agreement with Carter and Carter plc.

You mentioned that alarm bells should be ringing, and the fact that trading in the company’s shares is suspended indicates that the Department should be concerned. Therefore, we will to continue to monitor the situation. The Department is not relaxed about the situation; we are concerned about the delivery of training in accordance with our agreement with the company.

Mr Attwood:
What assessment has the Department made? What advice has it received on the long-term viability of the contract, given that the company has a long-term contract in the North? Who has given advice to the Department about the fact that trading in Carter and Carter plc’s shares has been suspended? The contract is measured over years, not just weeks or months. What enquiries have you made in order to satisfy the Department and the Assembly that the company has any future viability?

Mrs Kerr:
The Department has a contractual relationship with Carter and Carter plc, and it has taken advice from the Department of Finance and Personnel (DFP) about procurement to ensure that that company is fully compliant with the terms of the contract. At this stage, the advice is that the company is not in breach of the terms of the contract. Therefore, the Department has a contract with Carter and Carter plc until such time as there is an indication of breach of contract there is no action that the Department can take that would change that situation.

The Department must assess what must be done in the longer term, should Carter and Carter plc fail to deliver on its contract. The Department must consider those issues, and it is taking advice on that.

Mr Attwood:
Let me clarify that. Has the Department received advice from DFP — or from any third party — about the viability of that organisation? I know what you are saying about the short term; however, this might not be a short-term problem. It could turn into a medium- or long-term problem, because the contract rolls out over several years. Have you received advice about Carter and Carter plc’s general financial standing, in order for you to at least have a contingency plan, so that, if the worst transpires for Carter and Carter plc, the delivery of training can continue?

Mrs Kerr:
The Department has taken advice from DFP about its contractual relationship with the company. Until such time as the company is in breach of its contract, the situation will not change. The Department must also consider a contingency position, and it has taken advice from DFP about that.

Mr Attwood:
I have probably taken that line of questioning as far as I can. Where a company has been awarded a substantial contract that will last several years, but its shares are suspended within days of that contract being implemented, it would be best practice for the Department to at least consider whether its due diligence function would require it to seek independent assessment and advice about the viability of the company. Subject to that advice, the Department should determine whether any contingency plans need to be made.

Mrs Kerr:
Can I —

Mr Attwood:
It seems simply to be good practice. Are you saying that we must wait until the contract fails before even considering contingency plans?

We should watch carefully to see whether Carter and Carter plc deliver satisfactorily all aspects of the contracts that it has been awarded.

Mrs Kerr:
Given that the company is a public limited company (plc), certain regulations concerning stock market trading restrict our right of access to and the level of information that we can get. Such information cannot be different from that which is available under stock market rules.

Mr Attwood:
With all due respect, Nuala, that is not an answer. You have invoked the stock market requirements and commercial confidentiality — for want of a better word — to say that an assessment of Carter and Carter plc cannot be made. I asked whether the Department or DFP have been given any advice about the future viability of the company.

Mrs Kerr:
Our relationship is based on the contract. An assessment was carried out when the contract was put in place, and the Department relied on the information and advice that it got at that point. Given that the Department has entered that contractual relationship, it has now taken advice about the options that are open to it. The Department must have contingency plans should the company fail to deliver on the contract. As things stand, there is nothing that the Department can do outside of that contractual relationship.

Mr Attwood:
I want to make one final point. When the contract was awarded to Carter and Carter plc — not by DEL but by DFP — the company’s commercial future was signalled, given that its share price collapsed dramatically. As I recall, subject to the record, we were told that that would not affect the award of the contract. However, within four months of the award of the contract, and within five weeks of its commencement, trading in the company’s shares was suspended. That raises fundamental questions about the procurement procedure that was used in the award of this contract. It appears that, somehow, the commercial viability of the company at any given time was not a material factor in the award of the contract.

The Deputy Chairperson:
My recollection was that the share value was high when the award was made. A tragic accident then happened and shares plummeted.

Mrs Bell:
That is right.

The Deputy Chairperson:
If I recall correctly, that happened after the conclusion of the procurement process.

However, although I know that when the award was made, an assessment was carried, I am unclear as to whether any assessment has been made in the past few days since the most recent situation has arisen. That is the point that Mr Attwood was getting at.

Mrs Bell:
I must make a general point first. Departmental officials met as soon as the situation came to light. We have ideas on how to act; however, we can do nothing about them until we see what will happen with Carter and Carter plc. I assure the Committee that our key priority is not the organisation: it is the young people who are getting the training. If anything untoward happens, we will ensure that their training is not affected. That is our prime responsibility.

I understand the Committee’s concerns. We were not best pleased either when we heard about this situation. I thought: please, no more. We are where we are, however, and we will look after the young people irrespective of what happens to Carter and Carter plc.

Mr McCausland:
When the contract was awarded, the company’s viability was assessed. Who carried out that assessment?

Mrs Kerr:
That was carried out on our behalf by the DFP central procurement directorate.

Mr McCausland:
Does that mean that any future assessment of the company’s current viability will be carried out by DFP?

Mrs Kerr:
We have a contractual relationship with Carter and Carter plc, and the scope of any action that we can take is conditional on its ability to deliver on the contract. If the company is in breach of the contract, we will have power to act.

Mr McCausland:
I accept Catherine Bell’s point about officials having certain ideas as to what they might do if the company went completely out of operation. How far you work up those ideas depends on where you think this thing is going. Therefore, how do you assess the company’s future viability? Who will carry out that assessment? You need to know how far you can take your ideas and when to complete your preparations.

Mrs Bell:
You are absolutely right. We are walking a fine line, because we cannot break the contract with Carter and Carter plc either. At the same time, however, we must ensure that the young people who are getting the training are not disadvantaged. It would not take long to implement our contingency arrangements. That is my professional opinion. However, we can do nothing until something happens to change Carter and Carter plc’s legal status. That is the reason that we cannot talk to anyone else.

I am not the expert on the matter, and I defer to Nuala on that. My understanding is that Carter and Carter plc could be bought over. That would put us in a different position. At this stage, however, we have had no indication that that will happen.

Mrs McGill:
Mr McCausland asked who assessed Carter and Carter plc’s viability, and the witnesses said that it was DFP. Therefore, I take it that that assessment has been published. Who can see it, and where is it kept? Can the Committee see a copy?

Mr Attwood made a valid point about how the procurement procedure should operate in the future. In this instance, it is not the case that the difficulties and concerns were not flagged up in advance of the collapse — I am not sure whether we could call it that — of the company’s shares.

Mrs Kerr:
At this stage, the company has not ceased trading. Although trading in its shares has been suspended, Carter and Carter plc still operates and is doing so in Northern Ireland in accordance with the Department’s contractual arrangements. The Department is bound to that contract in the same way as Carter and Carter plc and, therefore, cannot default on it.

However, as is prudent, the Department has considered its potential options should Carter and Carter plc cease trading or take a major step that would mean that it could not continue to fulfil the contract. The Department must have contingency plans in place should that happen. I accept Mr McCausland’s point that the Department must be clear on how to act and ready to do so quickly in that eventuality.

Mrs McGill:
My question about who can see the assessment was not answered.

Mrs Kerr:
DFP makes the assessment and holds the information.

Mrs McGill:
Does that mean that no one from DEL sees it?

Mrs Kerr:
We rely on DFP’s advice and expertise.

Mrs McGill:
How does DFP communicate its advice: is it done verbally?

Mrs Kerr:
The advice comes with DFP’s assessment when the contract is ready to be issued.

The Deputy Chairperson:
Do you receive any paperwork on that process?

Mrs Kerr:As DFP issues the contract, it makes the assessment. DFP confirms to us simply that the company is suitable to undertake the contract: it does not provide any detail of its assessment.

The Deputy Chairperson:
We are delving too far into the procurement process. There will be further meetings on that issue.

Mr McClarty:
Should a company buy out Carter and Carter plc, would it also buy its contract with the Department? Surely the contract is with Carter and Carter plc, not the new company.

Mrs Kerr:
It depends on the outcome, and terms of, any acquisition of shares. If the takeover were made through the acquisition of shares, we would expect the delivery of the contract to continue, regardless of whoever succeeds Carter and Carter plc. However, different outcomes may arise depending on whether there is an acquisition of shares or an acquisition of some other description.

Mr McCausland:
You already have some ideas about a contingency plan should such difficulties arise, but how long would it take to put that into operation?

Mrs Bell:
It would not take long. Let me put it like this: the young people’s training, which is the priority, would not suffer.

The Deputy Chairperson:
I thank you both. I know that answering questions on that subject was not on today’s agenda. You can see that the Committee is greatly concerned about recent events. Will the Department keep us fully briefed on any developments?

Catherine, when you spoke to the Committee on 19 September 2007, you requested an opportunity to brief the Committee on the Department’s quality and performance branch and its quality strategy. My understanding is that you consider that the mechanisms that are now in place will ensure a consistent approach to delivering high-quality programmes. At the same meeting, you said that such a briefing would assure members that the new arrangements will address the weaknesses in the Jobskills programme that have been highlighted.

Although I recognise that quality monitoring applies to all the Department’s work, you will not be surprised to learn that the Committee wants to know how the quality strategy, in particular, will be applied to Training for Success. I am sure that the Department is aware that the Committee has now formalised the monitoring programme for the early stage delivery of Training for Success. For that reason, I have asked that the session be recorded by Hansard, given that we are committed to reporting and publishing the scrutiny programme. I shall pass over to you, Catherine. I am sure that the Committee will want to ask questions after your presentation.

Mrs Bell:
Thank you, Deputy Chairperson and Committee. We appreciate the opportunity to speak to you about quality improvement and related contract monitoring. I will deal specifically with quality improvement, and Nuala will deal with contract monitoring.

The Department has now put in place the strategies that guide its work, for example, ‘Success through Skills: The Skills Strategy for Northern Ireland’, and Training for Success, regardless of whether we like it, which is the programme for apprenticeships and the programmes that lead to them. The Department also has Further Education means Business, which is the strategy for the further education sector, and Essential Skills, which is the strategy for literacy and numeracy.

The Department could have all the strategies that it likes, but that is irrelevant if the quality of delivery is not good. Therefore, decided some time ago that quality would be at the heart of its work and that it would give significant weight to quality improvement for the learner and, indeed, for the employer.

The Department has developed its quality-improvement strategy, Success through Excellence. The Committee has received copies. In order to develop the strategy and its subsequent implementation, the Department has seconded an education and training inspector to act as its professional adviser. Therefore, the strategies that guide the Department’s work are in place, and quality improvement is at the heart of that work. The Department will work with the Committee on the next stage of the project, which is the workforce-development strategies for those staff who deliver the programme on the Department’s behalf. At present, all college staff must be qualified to at least level 4, which is roughly degree level, as well as having industrial experience in the business area. They must also become trained teachers within three years of taking up post. The Department also want to build on that, so that there will be a programme of continuous professional development. It is currently considering a similar model for the training organisations that deliver contracts on its behalf.

Several key players on the quality-improvement strategy are crucial to ensuring that there is quality for learners. The ultimate responsibility for improvement lies with the relevant organisations. The inspectorate can inspect every day of the week, but it cannot make a difference if an organisation is not committed to improvement. The Department also has a responsibility because it funds the organisations either through mainstream, further education or contracts with training organisations. The Education and Training Inspectorate has a responsibility because it inspects the programmes on the Department’s behalf and gives an independent assessment. The other group that is involved in quality improvement is the Learning and Skills Development Agency (LSDA) for Northern Ireland, with whom the Department has a contract to help it support organisations in the promotion of quality and quality improvement.

There are two main strands to the Department’s attempts to improve quality. The first strand involves its working with the inspectors. Each year, every organisation that the Department funds through for example, Jobskills, Training for Success, New Deal, or, indeed, further education colleges, must submit a self-evaluation report.

That self-evaluation, in which those organisations evaluate their own quality, is based on indicators that have been set up and used by the inspectorate. The organisations are also required, at the same time, to submit an improvement plan to address any weaknesses that they have identified. The inspectorate receives both of those documents on DEL’s behalf and gives us a judgement. However, that is not just a paper exercise. The Department carries out follow-up visits to those organisations to test the improvement plan against what is actually happening. Every organisation that falls within our remit is expected to complete those exercises annually.

The second strand of the quality improvement programme involves the normal inspection regime. The Department and the inspectorate agree a programme of inspections across further education colleges and training providers for 12 months. Inspection focuses on the quality of teaching — or training — and learning, standards achieved, and outcomes. Departmental officials are present when the governing body or management committee of an organisation receives its report in order to hear first-hand what the inspectorate has to say.

DEL, in conjunction with the inspector seconded to it, will then work with the Learning and Skills Development Agency to help the organisation in question draw up an improvement plan to address any weaknesses. The inspectorate assesses the robustness of the subsequent plan to determine whether it will address any weaknesses sufficiently. The inspectorate returns to the organisation within 12 months to 18 months to assess whether the organisation has adhered to the improvement plan and to determine whether it has raised its standards. That is the norm; however, if the Department discovered a badly performing organisation, it would not wait as long as 18 months to act.

When the chief inspector published her report in 2004, 66% of Jobskills organisations received grade 1 or grade 2 assessments, which are very good grades. That figure had risen to 80% by the time that the chief inspector’s most recent report was published.

The Department also has a role on the contracting side, and Mrs Kerr will talk about that. Departmental officials monitor the organisations to ensure compliance with the operational guidelines. Quality is one consideration, but we must also ensure that the organisations follow the rules.

Mrs Kerr:
As Mrs Bell has said, our approach to quality improvement is two-pronged. The first is to increase quality, and the other is to ensure that, in managing contracts, we can take action when organisations fail to meet the required standards. Until September 2006, our contract managers were distributed throughout the Department. They were responsible for Jobskills and New Deal providers, for example, but the skills and expertise of the individuals who were involved were fragmented across the Department, and we had concerns about the consistency of the approach.

In support of the strategy, we brought those people together to form a new team, which is responsible for ensuring that the contracts for Jobskills, New Deal, and Training for Success, are delivered in accordance with our intentions and within the terms of the contract. Any contract relationship comprises the contract itself and several guidelines that support its implementation. We discussed that in previous evidence sessions, in which we have examined how individual elements of Training for Success are implemented.

A team of inspectors regularly visits our providers: every organisation that has a contract with us is visited twice in a financial year. Depending on the outcome of those visits, a further visit may be required to ensure that the providers are compliant with the contract. The intention is to ensure that the young person who is being trained receives the proper training in the right environment, that they are present for the proper number of hours, and that the contractor adheres to all the guidelines that we have set out to support the implementation of the contract.

The contractual side of the approach gives us the teeth to allow us to drive up our quality improvement strategy. Therefore, we receive the inspectors’ report and the report from our contract managers, who ensure that the guidelines are being adhered to. We have taken action to remove or suspend the contracts of those organisations that have been asked to improve but have shown no signs of doing so. Mrs Bell talked about the improvements that we have seen, particularly those of the past year, and the implementation of the two elements of the quality improvement strategy.

Mrs Bell:
I should say that we also have a financial team that is separate from the inspection unit; however, we are talking only about monitoring the operational guidelines and quality.

The Deputy Chairperson:
You mentioned the early stage review on risk management of providers. When does the Department expect to conduct that review? Will the feedback from such a review be made available to the Committee?

Mrs Bell:
We are in negotiations with the inspectorate to establish the programme for next year. Obviously, organisations that are new to Northern Ireland will be included in that. The inspectorate works on a programme of rolling inspections and also suggests ideas for inspection to the Department. All that information can be made available to the Committee.

The Deputy Chairperson:
What is the Department’s role in and relationship to the Learning and Skills Development Agency? The website is unclear about that.

Mrs Bell:
We have been in a relationship with the Learning and Skills Development Agency for some time. The preparation for that started following the incorporation of the colleges in 1999. At that time, colleges left the control of the boards and there was no support for them, either in curriculum or in staffing. The Department of Education examined the support that was given to further education colleges — rather than to training organisations —in England, Scotland, Wales and the Republic of Ireland. Quite a lot of work was done at that time. The assessment was made that if the Learning and Skills Development Agency in England set up an arm in Northern Ireland, its expertise would provide the best possible support. A similar model was adopted in Wales. The English body has changed somewhat, and the organisation there is now called the Learning and Skills Network. However, because the brand was so widely understood in Northern Ireland, we kept the original name — the Learning and Skills Development Agency. We have informed the Learning and Skills Development Agency that although that arrangement was fine in the early days, given that we have now extended the support to our training organisations, it is likely that DEL will go out to contract for this support. Therefore, we will have to bid for the contracts, and whether we win them remains to be seen.

We currently have a memorandum of understanding and a service level agreement with the LSDA.

The Deputy Chairperson:
Is next year the earliest that any reviews can take place?

Mrs Bell:
Do you mean the reviews of Training for Success?

The Deputy Chairperson:
Yes.

Mrs Bell:
No. Unlike our policy on any other programme, given that there has been a great deal of controversy Training for Success, we have committed to an ongoing review of it and to making any necessary changes. In fact, we have had discussions with the inspectorate in order that it can help us. The inspectorate will consider not only quality, but it will examine other aspects that it thinks affect the programme. Therefore, we will not wait for a year.

The Deputy Chairperson:
The Committee needs a formal line of communication about that. You need to keep the Committee informed of that issue.

Mrs Bell:
We will keep you informed.

Mr McClarty:
The systems that are in place to maintain quality seem to be rigorous. In the event of an organisation consistently failing to reach or maintain the required quality, what sanctions or penalties are in place? Has the Department had to use those sanctions and penalties in the past?

Mrs Kerr:
The contract enables us to take action when an organisation fails to maintain the quality standards. We have the power to end the contract with the deliverer. Indeed, we have done that in the past.

Mr McClarty:
Would you — or have you — ever been able to recoup some of the money from the financial aspect of a contract?

Mrs Kerr:
We pay on achievement, so the manner in which we pay against contracts or against milestones has not arisen. Therefore, we pay when a contract has been delivered to a certain specification. The Department has the power to recoup money; however, as yet, that situation has not arisen.

Mr Newton:
A great deal has been made about the contractual arrangements with Carter and Carter plc, and you have told us how that situation is being monitored. Although Carter and Carter plc has been mentioned, several other contracts exist, and I imagine that the same observational monitoring occurs with all the organisations that have been awarded a contract. I presume that monitoring occurs across the board, regardless of whether an organisation experiences financial problems, or, indeed, as David has just mentioned, whether it is about the delivery of quality. I do not want Carter and Carter plc to think that it is being singled out in any way, shape or form. As you have rightly pointed out, that company is not in difficulty and there is currently nothing financially wrong with that company.

One of the big criticisms of the Jobskills programme was the cost of the job that was delivered. It was thought that only 13% or 14% of the people who entered that programme actually got a full-time job at the end of their training. The cost of that was thought to be approximately £26,000 for every job that was gained. I am not sure whether those figures are exactly right, but they are not too far off the mark.

What does the Department expect the job cost or success of Training for Success to be? Would you expect each trainee to gain full-time employment across the range of levels?

Mrs Bell:
First, the apprenticeship programme means that the apprentice will be employed from day one.

Mr Newton:
Would you expect that 100% of the apprentices would get or maintain full-time employment at the end of their apprenticeship?

Mrs Bell:
The Electrical Training Trust, which is our flagship programme, has a success rate of over 80%.

Mr Newton:
Therefore, 80% would be the benchmark.

Mrs Bell:
If we in Northern Ireland are serious about upskilling and about maintaining a skilled workforce, the apprenticeship programme must have exactly the same status for a young person as studying for A levels, or, indeed, going to college to complete a further education course.

Therefore, we must aim at a 75% to 80% success rate. That is where quality improvement in the organisation, the Education and Training Inspectorate, the Department for Employment and Learning, our contracting managers, and LSDA are so important.

We have explained that there are four strands in the other programmes, which have been designed for those young people who are furthest from the labour market and who face significant barriers. The cost of them getting a job will be a significantly higher than we would expect for young people who do not have a job and who are not ready to take up an apprenticeship but who could get a job after a year’s training and work experience at regular intervals. Although I do not have the figures on that at present, I can forward them to the Committee at a later date. Training for Success is not a one-size-fits-all programme; that is the mistake that we made with the Jobskills programme.

Mr Newton:
That would be useful information to have.

The Deputy Chairperson:
As there are no other indications that any other member wishes to speak —

Mr Attwood:
I apologise, Mr Deputy Chairperson. Would it be possible to furnish the Committee with an anonymised copy of the standard contract that is awarded to the training organisations? I am sure that there are variations on that contract, but can the Committee have a copy of what you consider to be the most appropriate model?

Although Carter and Carter plc is still trading, have you asked the Education and Training Inspectorate — even at this early stage — to inspect the way in which the company is fulfilling the terms of the contract?

Mrs Bell:
We have asked the Education and Training Inspectorate, as a matter of priority, to carry out informal inspections. They have inspection days when specialists, or district inspectors, go out to organisations. We had a full day’s session with the inspectorate, and we have asked it to pay particular attention to new organisations.

Mr Attwood:
How will that pan out over the next weeks and months as regard the new organisations and Carter and Carter plc in particular?

Mrs Kerr:
The contract is another aspect of the matter. Our contract managers have met already all the people who are delivering contracts in order to explain the guidelines and to ensure that those are fully understood so that they know what are expectations are. Therefore, the standard contract and the guidelines make up the contractual relationship.

Our contract managers have been in close contact with Carter and Carter plc, in particular to ensure that at the beginning of the contract it was ready to go. Therefore, we already have a history of discussions and meetings with that company. Close monitoring of the implementation of the contract will continue so that we can be assured of the kinds of numbers that are performing. That, together with the inspections, will decide our view.

As we have said, we have taken a risk-based approach to the programme. Our initial focus will be on those who are new to operating those systems with us — including Carter and Carter plc. It will also include those who have newly acquired contracts, as well as those who have past experience. For example, some organisations had a contract with us under the old Jobskills programme but are now operating under Training for Success. If their organisation is due for an inspection, they will be prioritised. Therefore, we have a programme that matches risk against our inspection regime.

Mrs Bell:
We work very closely with the Education and Training Inspectorate, from whom we receive feedback. The inspector who has been assigned to us is based in the Department. Equally, if an inspector has a concern about an organisation — not necessarily Carter and Carter plc — there are several ways in which they can get that information to us. They always write a report for the file. If they had serious concerns about a particular organisation, they would share them with us. However, we would not receive run-of-the mill information.

Mr Attwood:
Are inspectors highlighting matters in respect of the new contracts, five weeks into the new regime?

Mrs Bell:
No. I am not —

Mrs Kerr:
They are not highlighting any material issues. Some small matters are being raised, but they are not hugely significant. Some of the issues relate to the guidelines and how people are interpreting them. We are being given some early indications about the length of time that young people are with employers and how long they are off the job. Therefore, those types of issues have been raised already, and we are dealing with those in individual organisations.

Mr Attwood:
Moving to the far end of the contract, under the most recent grading assessment, 20% of trained providers did not get a grade 1 or a grade 2. Given that the Audit Office said that the Department did not impose penalties or sanctions, and given that Mrs Bell said that the Department has not opted to remove or suspend contracts, what measures have been taken against the 20% of providers who did not receive a grade 1 or a grade 2?

Mrs Bell:
The Department has taken action against organisations that, after a follow-up inspection, did not show significant improvement. The 20% that I mentioned were not unsatisfactory; I was merely citing grade 1 and grade 2 as the top grades. Regardless of whether an organisation is awarded a grade 1, there is still room for improvement. We expect the inspectorate’s response on a grade 1 provider to detail its areas of weaknesses. There are always weaknesses, and always room for improvement. The inspectorate pays particular attention to the organisations that get below a grade 2. In the first year after an inspection, and before the follow-up, the inspectorate will carry out a number of informal visits to make sure that action is being taken. If, during that time, the inspectorate were to inform the Department that those providers were not taking their situation seriously or that things had got worse, the Department would act — and it has done so in other areas. There is no reason to doubt that it would not take action.

As we say in every document, our prime responsibility is not the organisation: it is the young people or adults going through the organisation. We regard them as the people to whom we are responsible.

Mr Attwood:
Whatever measures were taken against those of the 20% who were failing, they were short of suspension or the loss of a contract.

Mrs Bell:
The contracts were taken away in the case of two organisations that were not up to standard. I do not want the Committee to think that the entire 20% were unsatisfactory: that is not the case.

Mr Attwood:
You will not be able to answer my final question, so please send the information to the Committee. Who, from the 80% of training providers who got grade 1 and grade 2 and who bid for contracts over the recent procurement exercise, were unsuccessful in their contract bid?

Mr Newton:
Acting in my capacity as a politician, I remember doing an exercise on Jobskills, and I am sure that you were at the meeting with Will Haire. We were concerned about the lack of input from the top 100 companies in Northern Ireland, and when we surveyed the companies, many of them said that they did not know that they were eligible to take part. In respect of the quality assurance of the programme, most of the top 100 companies will be likely to give a better quality base from which to start. Has any work been done to penetrate that quality of company?

Mrs Bell:
It would be wrong of me to say that any specific work had been done on that. When we launched the Training for Success strategy, we attempted to significantly raise its profile by engaging with the Institute of Directors and the Confederation of British Industry (CBI). However, unless Nuala knows something about this, I am not aware that any specific initiatives were undertaken with the top 100 companies in Northern Ireland. However, that is not a bad idea.

Mr McCausland:
In its 2005 report, the House of Commons Committee of Public Accounts outspokenly and repeatedly stated that inspections had shown that the Department had been taken for a ride but that it did nothing about it. Is there any indication that previously failing companies that had not had their contracts terminated are providers in the new regime?

Mrs Bell:
I will not give a definitive answer to that question because, as sure as I say that they are not providers, someone will point out one that is. We must check.

Quality was one criterion that we took into consideration. During the tendering process, it would have been lovely to have insisted that companies produce evidence of a grade 1 or grade 2 inspection report. However, that was not possible under European legislation, which required us to open the process to organisations that were not subject to inspections. Therefore, companies were required to produce other evidence to demonstrate their quality. Although I hope that the answer to your question is no, I cannot say that such companies are not involved, but we will find out.

Mr McCausland:
It would be excellent if you could come back to us with your findings.

The Deputy Chairperson:
There appears to be no further questions. In order to provide feedback, the Committee will ask the Clerk to instigate formal communications with the Department about review processes. I also point out to members that the Education and Training Inspectorate will brief the Committee on 24 October.

I thank Catherine Bell and Nuala Kerr for attending today’s meeting and for answering questions about Carter and Carter plc and about quality improvement. Thank you both very much.