Annual report reveals Government's Learndirect brand has underperformed, despite huge spending on marketing and administration.
Steve Hook reports
Funding chiefs are to put a tighter rein on the finances of Learndirect amid growing concern about the performance of the Government's heavily advertised online learning programme.
The annual report of the Learning and Skills Council shows that training provided via the University for Industry's Learndirect brand, which offers distance learning by computer, was 65 per cent of what was expected in its first year.
Of total Learndirect-related spending for the same year, more than a third (pound;62 million) went on administration costs.
Like the ill-fated Individual Learning Accounts scheme, UFILearndirect is a flagship in the drive to boost skills, but the LSC is loath to discuss its finances.
From August, funds paid directly to UFI by the Department for Education and Skills for head office costs will be channelled through the LSC along with funding for courses.
In 2001-2, the UFI received pound;85m, mostly from the Government, to support its head office in Sheffield.
Its courses attracted pound;87m in LSC funding, paid directly to providers - colleges or private firms which have contracts with Learndirect.
UFI's costs included providing learning materials and computer equipment as well as an advice line. But the company admits that 36 per cent of its expenditure was on activities that were "not in the front line".
Even so, it says Learndirect has been good value at pound;249 per 15 hours of learner time in the first year. It says this cost will fall as the number of students increases.
Pablo Lloyd, UFI's deputy chief executive, said: "With Learndirect, students can learn where they want, so pound;249 is something we are very comfortable with."
Mr Lloyd said the 36 per cent of expenditure on non-front-line actvities fell to 25 per cent for 2002-3, when Learndirect will be shown to have provided 80 per cent of what was expected by the LSC. But Learndirect's staffing bill has reached pound;12m a year with a rise in employee numbers from 260 to 350 since its inception.
Colleges would expect severe criticism from the LSC if they only achieved 80 per cent. The figures have caused dismay among principals, many of whom provide Learndirect courses but say they are set higher standards by the LSC than have been set for UFI.
Peter Pendle, general secretary of the Association for College Management, said: "A lot of colleges experience administrative difficulties with Learndirect, particularly with rationalising and reorganising learning hubs.
"Then there is the whole process that has to be gone through to secure provision and extra funding. There's a lack of coherence."
Learndirect spent pound;8m on advertising in 2002-3 and a further pound;10m on other marketing. This amounts to 8.8 per cent of Learndirect spending, compared with the 3 per cent which colleges would typically spend on these activities. Certainly, marketing is the most expensive item on the company's balance sheet.
The firm is being touted as a possible sponsor for the next conference of the Association of Learning Providers, many of them private companies which run Learndirect courses.
The ALP said it was not aware of its members having any problems dealing with Learndirect.
FE editor's comment 4