The man who wants the numbers to add up

15th May 2009 at 01:00
The new head of the LSC is on a mission to bring improvements to further education at a time of change. Alan Thomson reports

Value for money is a recurrent theme when talking to Geoff Russell about his role as chief executive of the Learning and Skills Council.

Historically, he says, public sector organisations focus on getting policies to work and pay less attention to measuring what the policies actually deliver.

"People can always tell you what they have spent, but not what they are getting for that spend," he says. "That's a really important question. It sounds easy, but the public sector is hard to measure, though that's not a good enough reason not to do it."

It is the sort of answer one might expect of a former partner at the global financial consultancy KPMG.

The implications of Mr Russell's approach for the learning and skills sector promise to be far-reaching. He wants to restructure college funding so that money is distributed according to the quality of provision, not just on the basis of learner numbers. He has also built a value-for-money test into the assessment criteria for capital projects.

"The other week I got around to having chats with the people who measure the performance, who are a little bit separate from the people who measure the money," he says. "I asked them to get talking to each other and they were excited about it. It is a real culture shift for almost any public sector organisation."

An organisation accountable for its money is closer to the commercial sector, he says: "Then you can ask questions like, `Can you do it less expensively this year than last?'"

Perhaps questions like this were being asked before Mr Russell arrived at the council, but it seems that the answers were harder to come by. The debacle of capital funding for colleges, the underestimation of demand for 16-19 education next year and the ongoing concerns over Train to Gain budgets all point to an organisation that had, in Sir Andrew Foster's words, taken its eye off the ball.

"On college capital, I am not sure anyone added up the costs," he says.

"Part of it was a cultural thing. People thought this was the policy and that it would always be funded. But suddenly it stopped.

"It was extremely fortunate the Government found some money."

The issue with 16-19 funding was different, although connected, he says, with demand exceeding expectation: "We had a pretty good idea that demand would increase, but it was not easy to predict precisely. When the figures came in, they were more than budgeted for.

"Unfortunately, the Budget came out after the letters about funding had to be sent out to course providers, so we were in a difficult position. We took the view that, `We know that this is not enough to cover the number of kids you have.' But we could not say we were hoping to find the cash."

Again, the LSC and providers were spared pain thanks to extra government money, and Mr Russell's gratitude for this and the extra for capital is indicative of the seriousness of the situation that faced the council.

For him, the idea of the state always being there to bail out a public body that gets its sums wrong is problematic and must be challenged.

"When there was a lot more money and investment in public services, it was less important to have accurate management and information, both in terms of analysing the history and forecasting," he says. "But the surpluses are disappearing and the need to manage is becoming greater. The flexibility we have to deal with problems is diminishing.

"The money is slowing and demand for services is rising. We have to move away from budget management to performance management."

He adds: "We are moving away from a demand-led approach to a needs-based approach. Needs-based criteria is another way of saying best value for money."

The application of five criteria to assess college capital projects is a prime example of this. The criteria attempt to balance the educational and economic importance of a project with the state of a college's buildings and assess whether the plans represents value for money.

There will be winners and losers in the competition for capital funding, just as there will be when quality criteria are applied to the distribution of teaching money.

As Mr Russell puts it: "Educating children and training and upskilling adults is crucial, but so is funding health, dealing with terrorists. We have a finite amount in the kitty, so we need to have adult discussions."

As if the day job were not challenge enough, Mr Russell must also oversee the transformation of the LSC into its successor bodies: the Young People's Learning Agency and the Skills Funding Agency. LSC staff are to be redeployed with the two agencies, and negotiations with the staff trade unions are apparently going well.

"It was always the plan to have shadow organisations that looked like the YPLA and SFA up and running by September at the latest, and that they would start working with organisations and government," he says. "What I have asked to happen is that we move to those organisations as fast as we physically and operationally can."

While Mr Russell remains responsible for the LSC until March next year, his desire to accelerate arrangements reflects the volume of work. He is determined to leave a useful legacy for the fledgling agencies.

Mr Russell has certainly found the big public sector challenge he was looking for. He must also be pretty sure that there is little danger he will cross his self-proclaimed low boredom threshold.

CV: Geoff Russell

1985: Qualified in Canada as a chartered accountant

1988: Joined KPMG as an audit manager

1992: Involved in emerging markets in Central and Eastern Europe, the former Soviet states, the Middle East and Latin America

1994: Appointed a partner in KPMG London's Financial Services Practice. Worked on rescue and purchase of Barings Bank

1998: Executive partner KPMG for Global Banking and Finance

2002: Joined KPMG International as the head of practice development

2005: Accepted a secondment to the Treasury as director of financial management change

2007: Partner in KPMG's financial management solutions group in its government advisory practice

2008: Retired, aged 50

2009: Appointed chief executive of the Learning and Skills Council.

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