October 24 will go down as “Black Wednesday” in the history of Individual Learning Accounts. There is a real sense of “before” and “after” about the suspension of ILAs in England. But to understand their future, we must recollect their past.
The starting point is Labour in opposition and the build-up to the 1997 general election. Two views had emerged on ILAs. The first was that they might operate in the higher education sector, but Labour had other plans including the introduction of tuition fees and income contingent loans. The second was their role in training policy or what is now called “workforce development”.
Just before the 1997 election, Labour found itself supporting three perceived “taxes” on business - the social chapter, the national minimum wage and the training levy. Something had to go. It was the levy.
This left a big hole in Labour’s skills policy. The debate moved on to the idea of compulsory employer contributions to ILAs, but this was found to be less appealing to employers than the training levy. The stocking filler was a system of one million “voluntary” ILAs based on pound;25 from the individual and pound;150 from training and enterprise councils, which were in effect public grants.
After May 1997, it became clear that ILAs would operate in the post-19 further education and training system, well away from 16 to 19 and higher education policies. A national framework was developed to manage the accounts - since financial institutions were less than interested - and a discount system was introduced to offer another way for individuals to use an ILA as well as “sustain” their use once the pound;150 grant had been spent. But throughout Labour’s first term, the policy objective was simple:
“Get rid of the million.” A manifesto commitment had been made. It had to be met. And it was, two-fold. This success paved the way for ministers to commit a second Labour Government to “extend” ILAs.
Against this background, some fraud was inevitable. So too was dead weight, but it is important to remember that the Learning Age Green Paper shaped the implementation of ILAs. A 70-year-old grandfather who gained a degree from Oxbridge in the 1940s but who, today, has no idea about computers, should be eligible for an ILA to learn how to use the world wide web with his grandchildren, in the same way as a 25-year-old with poor ICT skills.
But it was also known that the first-come first-served principle would help get to the target more quickly. Thankfully, Black Wednesday has liberated ILAs from the politics of target-setting. It has also created a window of opportunity for the Government to assess their long-term role. The front-runner is for ILAs to operate within workforce development for low-skilled adults and move towards company-based collective accounts to engage non-learners with low qualifications. Equally, “individual” learning accounts might cover adult and community learning.
Yet, ILAs remain a potential vehicle to manage most publicly-funded and some private funding of post-16 further and higher education. Putting learners first is one thing. Putting funding into the hands of the learner is another. The current ministerial team at the Department for Education and Skills should not lose sight of the fact that the 1997-2001 ILA experiment tested, for the very first time, the principles of “putting funding into the hands of the learner” and empowering individuals rather than institutions.
Of course, the use of ILAs as a universal mechanism for post-16 further and higher education would need to operate in a more regulated system than the 19972001 experiment. But many of the building blocks for a universal ILA are in place.
On the savings front, the Government is committed to taking forward Baby-Bonds. On student finance, the Government is considering extending education maintenance allowances and income contingent loans. And there is the potential for the Learning and Skills Council and Higher Education Funding Council for England to develop a publicprivate partnership to route funding council cash via ILAs.
A universal ILA combining these savings, borrowing and cash for the funding councils is the way to achieve the much sought-after goal of a demand-driven system. It is a project for the Cabinet’s Performance and Innovation Unit if ever there was one.
Mark Corney is director of MC Consulting
