ELWa

I want to make a statement today about the way ahead at ELWa– National Council.  This is both in relation to deficiencies in the application of the proper procurement procedures required by the Assembly Government, and in relation to problems affecting a number of projects commissioned by the Council at broadly the same time which are being independently investigated by the Auditor General.

There was a pattern in what occurred over a number of projects late in 2001, and early in 2002.  The common thread concerns weaknesses in the operation of important business systems - notably those bearing on contract, compliance, project, risk, and payment management.  All were marked by an absence of the usual business standards which we expect in any Assembly Sponsored Public Body.  

I welcome the acting Chief Executive’s decision to undertake a comprehensive review of other Council contracts. The advice I have at present suggests that this wider review has raised no new issues.
What happened was truly regrettable - notwithstanding ELWa's excellent record of achievement for learners.  Although the problems affect only a very small percentage of the Council's overall expenditure and activity, control and compliance failures of the sort that existed at the time cannot be disregarded or dismissed.  That goes particularly for up front payments which absolutely contravene Government Accounting rules.  However, Members can be reassured that the robust audit systems which the Assembly Government has put in place will ensure that lessons are learned and acted upon.

The audit process must now take its course to ensure that the appropriate lessons can be learnt and operational practical changes implemented.  It may be helpful to lay out the timetable for all members. I understand that the Auditor General is likely to publish his independent report in September.  The contents and timing are matters for him, not for the Assembly Government.

The Assembly’s Audit Committee will then conduct its own hearing when that report is available and take evidence. It will then publish its report, and the Assembly Government will respond to the Committee's recommendations within 30 days as required by Assembly Standing Orders.

Since I first reported the Council’s concerns to ELL Committee in May last year, the Assembly Government has taken a number of specific actions to ensure the Council is fit for purpose.

Firstly we sought immediate reassurance from the Council about action to be taken to ensure a proper control framework was in place.

Secondly, the Assembly Government agreed to the Rawlings recommendations that the Council should have a separate Chief Executive and Finance Director and I reported this to the ELL Committee on 21 November last year.

Thirdly, in my remit letter this year I required the Council to review urgently its key business systems to ensure key aspects of its project management, contract practices, procurement procedures, payment and treasury arrangements, risk management and compliance are in a sound condition.

Fourthly, I required the Council to prepare a prioritised action plan for dealing effectively with all areas of weakness; for full implementation by September.

The Action Plan covers measures to restructure and reshape the organisation; to overhaul business systems; to institute a training and development programme to secure the Council's management of projects; and to buttress its compliance regime.  Milestones and targets have been agreed with Permanent Secretary.

Measures are now in hand to recruit a permanent Chief Executive and Financial Director, and to appoint a successor to Enid Rowlands who has decided not to seek a second term.

The sponsor division is monitoring the Council’s progress against its action plan through monthly meetings with the interim Chief Executive.  The Assembly Government has made it a requirement that quarterly reviews of the Council’s business systems are carried out by its internal auditors to ensure compliance with control documents.  Checks include project management, contract practices, procurement procedures, and payments.  The Council is also now required to provide an annual statement of compliance with the control documents.

Meanwhile, Sue Essex and I have agreed to commission an independent examination of the Action Plan to provide assurance on the Council’s ability to discharge the plan effectively and confirm delivery to time.  This work will be dovetailed with the Council’s roll out of its Plan, and completed in line with the Council’s progress.

The Assembly resolved that the Council should be established from 1 April 2001, with clear aims in view.

 to bring coherence to a disjointed system for learners post-16.  

 to do away with unnecessary competition between providers and the duplication of investment and work in partnership at local, regional or national levels.

 to improve choice.

 to bring a level playing field to funding for learners in sixth forms, FE and work-based settings.

We are at the point at which those benefits are within our grasp.

That means better provision for skills; parity of treatment for academic and vocational pathways; higher standards of learning; fewer dropouts; higher quality of provision; and more choice.  It means breaking down the barriers to learning for individuals, communities, and business.  It means increasing the number, and the attainments, of learners in Wales.

The Council has made an important and valuable start.  It has achieved a very great deal for learners - in a very short time.  

It has important housekeeping to complete.  But there can be no doubting the commitment of Council Members.  They are determined to ensure that a painful experience is turned to good effect, and that the Council builds on its strengths.  

Members of ELL Committee will have the opportunity in the autumn to hear directly from the Council about progress with its action plan.

I look forward to rapid progress on the delivery of the Action Plan and on being able to assure Members on the strength of the independent study that will report to me in the autumn.