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Millions given to inadequate Learndirect 'disgraceful', says PAC chair

National Audit Office report concludes the Department for Education's decision to continue funding Learndirect was unusual

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National Audit Office report concludes the Department for Education's decision to continue funding Learndirect was unusual

The Department for Education’s decision to award Learndirect £45 million after it had been graded "inadequate" by Ofsted has been branded “disgraceful” by an influential MP.

In response to a report by the National Audit Office (NAO) into the monitoring, inspection and funding of the country’s largest training provider, chair of the Public Accounts Committee Meg Hillier has claimed that the government “backed itself into a corner by letting itself become dependent on Learndirect”.

On March, the former Skills Funding Agency issued Learndirect with a notice of serious breach in relation to the standard of its apprenticeships provision, after its achievement rates had dropped below the 62 per cent threshold.

Later that month, Learndirect was inspected by Ofsted. It was rated inadequate, but Learndirect submitted a  legal challenge on “the timing and basis of the inspection – and the evidence gathered to reach conclusions about the quality of apprenticeships provision”.

The challenge was unsuccessful, and the report was finally made public in August.

'Special considerations'

The NAO report points out that while the standard practice is for providers rated inadequate by Ofsted to have their contract terminated with three months’ notice, the Education and Skills Funding Agency (ESFA) decided that Learndirect was “an unusual case, to which special considerations should apply”.

“Specifically, ESFA concluded that continuing to fund Learndirect Ltd for the 2017-18 academic year would best meet the interests of learners, allowing the company to wind down and let learners complete their courses with minimal disruption,” the report adds.


In response, Ms Hillier said: “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.

“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 company is estimated to have received more than £600 million of public funding since 2011. It expects to receive an income of around £105 million from its main government contracts in 2017-18. This includes funding for apprenticeships, adult education, European Social Fund contracts and the Work Programme, as well as for the Home Office’s Life in the UK citizenship test.

The NAO report also reveals that Learndirect’s contracts with the Home Office and the Standards and Testing Agency – collectively worth almost £10 million in 2017-18 – will be re-procured in “an open competitive tender” in which Learndirect will be able to bid.

'Failure' of oversight

Shadow skills minister Gordon Marsden said: “The NAO investigation into the monitoring, inspection and funding of Learndirect corroborates in grizzly detail all the concerns expressed by the Labour Party and others when Ofsted produced their verdict of inadequacy on the company’s apprenticeship activities.

“It highlights the failure of this government to maintain proper oversight of a company given huge amounts of public money and underlines the growing systemic failure of this government’s marketised approach in higher and further education."

A Department for Education spokesperson said: “Our priority throughout has been the protection of learners and ensuring that they do not lose out – a point that has been acknowledged by the NAO.

“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. This process has demonstrated that where providers do not meet the standards we expect, we will not hesitate to take action.”

An Ofsted spokesperson said: “We have no concerns about the management of the inspection of Learndirect, including the timing of the inspection and follow up monitoring visit. We stood firm in the face of legal challenge in order that our findings could be made public at the earliest opportunity.”

Learndirect has been contacted for comment.

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