Public Accounts Committee chair Meg Hillier has described the Department for Education’s continued funding of training provider Learndirect as a “disgraceful” use of public resources in the light of a new report from the National Audit Office.
Learndirect is the UK’s largest commercial provider of further education services and received £121m via central government contracts in 2016-17, but it was handed an “inadequate” rating by Ofsted earlier this year, which usually prompts the Education and Skills Funding Agency to withdraw funding within three months.
However the ESFA – which is part of DfE – decided to continue funding the business for the 2017/18 academic year on the grounds that it would be in the best interests of learners and public bodies. Learndirect was created by the government in 1998 and operated by Ufi Charitable Trust until it was sold off under David Cameron’s coalition government in 2011.
The NAO said its total government funding following its inadequate rating was expected to amount to £105m.
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According to the NAO report, Ofsted first raised concerns about Learndirect’s performance in 2015 because of problems with apprenticeships and other elements of provision that were then regarded as “relatively small”, but which merited an “amber” warning.
In March 2016, it changed the warning level to “red” because of increasing concerns over apprenticeships and other aspects of its service; an inspection of its services in March 2017 resulted in Learndirect being given an “inadequate” rating over the summer.
The NAO said its report did not seek to evaluate the value for money of Ofsted’s and ESFA’s work, or “draw wider conclusions about government funding and oversight” of the further education sector.
But the PAC’s Meg Hillier said it was clear the government had “backed itself into a corner” by allowing itself to become dependent on the provider, which caters for 75,000 learners a year.
“At a time when many further education providers are struggling with funding restraint, it is disgraceful that the department should be continuing to spend millions of pounds of taxpayers’ money on an inadequate provider,” she said.
“I am concerned that it took Ofsted so long to investigate. It knew Learndirect was a risk from as early as Spring 2015, but the inspection took two years to arrive.”
The NAO report said Learndirect now expected most of its government contracts to end in July next year.
It added that the Home Office and the Standards and Testing Agency planned to re-procure services currently being provided to them by Learndirect.
A DfE spokeswoman said the department’s priority had been the protection of learners and ensuring that they do not lose out.
“We set the contract wind down period to July 2018, which will give learners the opportunity to complete their courses, and will continue to monitor performance on a monthly basis to ensure learners and other service users are not affected,” she said.
“This process has demonstrated that where providers do not meet the standards we expect, we will not hesitate to take action.”