What a waste

6th April 2012 at 01:00

There's nothing quite like hearing someone from your line of business confirming outsiders' worst suspicions about your work. For us hacks, that moment came during the Leveson Inquiry, when rumpled former News of the World reporter Paul McMullan declared that "privacy is for paedos".

Those who want to see greater private sector involvement in education may have felt a similar horror when they saw the boss of Elmfield Training, Ged Syddall, appear before the Business, Innovation and Skills Select Committee.

Along with Norman Pickavance, the human resources director of Morrisons (whose staff Elmfield train), he tried to convince MPs of the importance of their work. But the abiding memory is of Mr Syddall's attempts to justify the #163;3 million dividend he collected in 2009-10, first revealed in TES last year. This, to put it in context, is bigger than the bonus Royal Bank of Scotland boss Stephen Hester was forced to turn down after a public outcry.

His company also bought luxury homes worth #163;6.5 million. And the only explanation was "we were paid too much". Well, quite. Or as Conservative MP Brian Binley put it, it was a "rip-off".

Mr Pickavance responded by attacking FE colleges, saying that none of them was able to deliver the scale and nature of the programme that Elmfield had. Excuse my scepticism. Newcastle College, for one, carries out more adult skills training and a similar number of under-19 apprenticeships.

After TES pointed out that the company was explicitly offering to get public funding for employers' existing training, Elmfield was asked to change its marketing. So one reason why colleges might not have taken the Morrisons deal is that they were unwilling to waste public funds on duplicate training.

"We would have done it anyway," Mr Pickavance conceded. There has been no clearer admission that FE minister John Hayes has presided over exactly the kind of waste and duplication for which he attacked Labour's Train to Gain programme.

Colleges have another advantage. If the government pays too much, the money cannot be extracted for private gain. Everything has to be reinvested. Elmfield claims that its "surpluses" also fund good causes. "Forty per cent of our post-tax profits go into a social impact programme," Mr Syddall said. But a breakdown he gave indicated that these projects received most of their funding from the taxpayer. Elmfield's latest published accounts show a charitable donation of only #163;99,000.

One reason why this all matters, beyond the shocking waste of public money, is that the government believes that employers should "own" the budget for skills, and is betting #163;250 million on its conviction. Will we be hearing from more businesses rueing how they were "paid too much" in a couple of years' time?

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