Underlying learndirect business stable, insists training firm slammed by Ofsted

August 15 2017, 8.26amUpdated: August 16 2017, 12.17am
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The UK’s largest adult training and apprenticeship provider has insisted its underlying business “remains stable” following reports its future is in doubt after a damning Ofsted report.

The education regulator confirmed the report will be published on Thursday after a court injunction obtained by learndirect was lifted.

The company, which was privatised in 2011, was given the lowest grade possible after an inspection in March, according to the Financial Times.

Ofsted found no evidence in a random sample of apprentices of learning plans or progress monitoring, said a third of apprentices had not received off-the-job training and that 70% of learndirect’s apprenticeship services were below the success threshold set by the government, the paper reported.

A spokesman for the watchdog said “we are very pleased with this outcome” after an application for a judicial review to overturn the report was refused.

Learndirect said it was “extremely disappointed” with the verdict, but added in a statement: “Learndirect Limited’s underlying business remains stable and we continue to be focused on supporting our learners as usual.”

The company said it challenged Ofsted’s inspection over concerns the process did not give a “true reflection” of the company’s training quality and performance.

“In particular, we felt that the sample size of 0.6% used by Ofsted to arrive at its conclusions is not sufficient to judge the quality of learndirect’s training,” a spokesman said.

But the regulator stood by its methods and said in a statement: “Seventeen inspectors took part in this inspection over four days when they spoke to learners and apprentices.

“Inspectors interviewed employers, apprentices and learners in person and over the phone, reviewed portfolios of work, and looked at progress reviews when they gathered evidence.

“As well as visiting apprentices in their workplace, inspectors also reviewed a wide range of evidence to ensure that both the judgments and inspection grades were secure.”

Learndirect said it would continue working with the Education and Skills Funding Agency (Esfa), adding the report did not affect parts of the business which are not reliant on the government department.

Joe Dromey, a senior research fellow at the Institute for Public Policy Research (IPPR) think-tank, described the situation as “truly shocking”.

He said: “While this is shocking, it’s perhaps not surprising.

“The Government has pushed competition between private providers in adult skills, it has eased controls on quality, and it has slashed funding in the system.

“This looks more like a systemic failing than an individual scandal.”

Learndirect, which is owned by private equity firm Lloyds Development Capital (LDC) – an arm of Lloyds bank – employs 1,645 people.

There are 16,800 people on apprenticeships through the company and another 56,000 adults on other training programmes.

The Government confirmed it has given learndirect contracts worth £158 million for the year to July 2017.

Responding to criticisms that millions of pounds of public money had been spent on shareholder dividends , a learndirect spokesman said: “Normal dividends were paid to our shareholders when the business was growing rapidly, generating significant profits of more than £25 million in 2013, and the sector outlook was positive.

“In addition to this there were significant intra-group dividends paid as part of a group reorganisation. None of these resulted in cash leaving the group. No further dividends have been paid since.”

An LDC spokesman said: “Over the last six years and under private ownership, the business has helped more than half a million learners. We provided £37 million of additional funding in the last three years to support the company during a period of severe public sector funding cuts.

“We remain a supportive shareholder and will continue to work closely with learndirect’s management team to take the business forward from this point.”

From an analysis of government data, the IPPR has calculated that learndirect received £631 million in public funding over the past four years.

Calling for an investigation by the Public Accounts Committee, Mr Dromey said: “If learndirect goes down, (the) Government should seek urgently to reclaim as much public funding as possible from their irresponsible owners.”

He added: “It was the Government which privatised learndirect, encouraged competition, reduced controls on quality, and slashed funding in the system.

“They set the conditions in which this disaster played out.”

David Hughes, chief executive of the Association of Colleges, said questions over learndirect’s ability to operate need to be resolved quickly.

“The most pressing concern must be for the students and the impact this will have on them,” he said.

“The continuity of their learning has to be pre-eminent now for Esfa as it works with learndirect.

“Colleges across the country stand ready and able to assist in securing on-going learning opportunities for those students and apprentices affected.”

Shadow Education Secretary Angela Rayner urged the Government to intervene to resolve the unfolding crisis.

The Labour MP said: “It is clear that something has gone seriously wrong since the coalition government privatised this service, and the future education and training of thousands is now at risk.

“If necessary, ministers should be prepared to step in directly and ensure that trainees and apprentices are protected, their courses are completed and adult education is placed on a sustainable footing.

“Relentless cuts and incompetence by successive Tory governments have left adult education in a mess. The next Labour government would introduce free, lifelong further education, enabling everyone to up-skill or re-train at any point in life.”

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