Ann Limb knows that the challenges facing learndirect over the coming 18 months will be as tough as any in its five-year history. But she remains as optimistic and undaunted as she did the day she took over directorship of New Labour’s training flagship.

The University for Industry was the vision of Chancellor Gordon Brown, who wanted it to do for skills training what the Open University had done for higher education, free of ideological constraints.

At the launch of Ufi\learndirect, Tony Blair described it as “one of the most innovative learning developments for years”. It would “help anyone anywhere get online and start using the internet to learn new skills”.

For Dr Limb, this remains the raison d’etre. “What started out in 1997 as an innovation has come of age five years on,” she says. “The recent review that the Government conducted, and the decisions it came to, have given learndirect a sustainable future.”

The organisation is embarking on radical reform to expand its public-service work and reach a wider commercial market. After an exhaustive review, the Government has approved measures to enable this, including the creation of a new com-mercial arm and greater control for the organ-isation over its own finances. From next April, Ufi will separate its commercial and public-service activities, with the creation of a new company. And from August 2004, its complex funding will be simplified. “We need this if we are to achieve what is expected of us,” Dr Limb says.

“The evidence of our success is there for all to see. In the past three years we have engaged 800,000 learners and reached nearly 70,000 small businesses. We also have a crucial role as training consultants, carrying out training needs analyses and identifying what it is that companies want.”

There have been big pressures on learndirect to sign up some of the hardest-to-reach and most resistant learners - at home, via college, in the workplace or at specialised centres. At the same time, the Government wants it to target some of the most basic skills needs of industry and commerce.

“There is a clear need to expand commercial activities without detracting from learndirect’s key role as a public-service provider,” says Dr Limb. “I am very impressed and increasingly surprised by the willingness of small to medium enterprises to pay for training that can be done flexibly.

“We have a crucial role to play with employers, providing them with information, advice and guid-ance through our national learning advice line. It is now providing such services on behalf of the sector skills councils to 7.5 million employees.”

Nevertheless, there is much more to do in the light of the Government’s skills strategy, which will be unveiled in a White Paper next month. “We must expand to meet the needs of industry, but there are limitations beyond our control,” Dr Limb says, pointing to the findings of an independent report by PricewaterhouseCoopers on the relationship between learndirect and the Department for Education and Skills.

At the outset, learndirect was encouraged to generate revenue and become partly self-funding, but had limited powers to borrow or invest commercially. “We have ownership of materials and expertise we could develop and sell to businesses for workforce development but cannot exploit them because of the funding methodology.”

The PWC report, which came in advance of the government review, was unequivocal. It said:“Without reform, Ufi will be unable to develop its volume and range of activities without a significant degree of financial risk.”

The DfES and the Learning and Skills Council fund learndirect, with no clear distinction between the purposes of funding streams and dispute over responsibility for quality control. The review called for learndirect to be funded directly, making it more accountable and cutting bureaucracy.

There are strong allies within government for the reforms Dr Limb wants.

“John Healey, when he was adult skills minister, said we were accountable for what we did not fund and responsible for what we had no management control over,” she says.

“The LSC was funding learndirect through colleges. We were responsible for their learning hubs but had no management control over them.

“David Sherlock, head of the Adult Learning Inspectorate, argued that it made a nonsense of his work. He asked how he could hold learndirect accountable for quality and standards in the hubs when it had no control over the funds. When we take control of the budget from the LSC (this year it was pound;159 million), I will then be the chief account-ing officer, as I should be.”

Dr Limb is comfortable in the role, having been principal and chief executive of Cambridge Regional College. Her experience also equips her to over-see the creation of the new commercial company. As to how the public and private firms would work together, the report suggested basing the relationship on the BBC, which is funded through the licence-payer but operates through separate companies. Dr Limb says: “It is similar to the BBC model, but also it is like the colleges going into incorporation.

Universities and colleges similarly set up commercial arms to develop and sell services at a commercial rate to the corporates.”

A profitable commercial wing must be of benefit to the wider Ufi\learndirect interests and consequently to the taxpayer, she insists.

“You cannot expect the public purse to pay out, indefinitely, huge amounts of money for post-16 education. Where work is targeted at public-policy initiatives, it needs one kind of organisation. But where it can work for a profit, it would be absurd not to get leverage out of that.”

When BBC Worldwide was launched in the 1990s, there was much scepticism; now it makes pound;600m a year. Similarly, the new Ufi private company will purchase the rights to sell learndirect materials to companies at home and abroad.

For Dr Limb, the key to getting public and private delivery right is the links with partner organ-isations. “We are creating premier business centres (see page 8) to develop our work and see the sector skills councils as an important development as they set the industry training standards.

For example, Semta, the engineering and manufacturing skills council, has developed an online one-stop shop for information and learning.

“What we have learnt from employers is that you cannot have a one-size-fits-all solution. Courses have to be tailored and designed in partnership with industry and local colleges, which are key players in recruiting learners and providing con-tinuing programmes. Two of the best examples of our tailored work are initiatives with Barclays (see page 9) and Tesco (see page 12).

“We need to work ever harder to target individual needs,” she says.

“It may be hard to reach small companies without a training ethos, but what about the self-employed? There are 1 million in London alone.

“That is why the way we are structured and funded is crucial. We will continue to work through the hubs, which manage things locally and are crucial to our network. There was criticism of some of these in the early days and it was necessary to put some on recovery plans. But many of those were coalitions of enthusiasts, with goodwill and interest in transforming a community through training without really knowing whether in the long term the Government would back learndirect.

“That has changed in recent years. I have been firm about what they must do and as a result we have seen a surge of interest in learndirect activities.

With the new Ufi companies, the clarity of funding rules and hubs working directly to meet the targets of the 47 learning and skills councils, we will see that surge of interest continue.”