The training company that was attacked by MPs for taking more than a third of its public funding as profit and paying its owner a #163;3 million dividend has now posted more modest figures. Elmfield Training's director, Gerard Syddall, took just under #163;900,000 in pay and dividends last year.
Accounts published this week by Companies House confirm Mr Syddall's claim before the Commons Business, Innovation and Skills Select Committee that his profit margin would drop to 13.8 per cent from 36 per cent the year before, a rate that had prompted MPs to accuse him of a "rip-off".
Mr Syddall attributed the fall to a funding rate cut of 25 per cent for training providers working with large companies. Elmfield Training said it exclusively works with large employers, such as supermarket chain Morrisons. "The state was paying too much money because it did not recognise that there were efficiencies in this kind of delivery model," Mr Syddall told MPs earlier this year.
While Elmfield's allocation from the Skills Funding Agency (SFA) rose to #163;42 million - giving it a turnover in the 10-month accounting period of #163;38 million - its costs rose by more than #163;10 million, according to the accounts. This left it with #163;5.3 million in profit, down from #163;12 million the year before.
The company was still able to increase the salary of the highest paid director, Mr Syddall, to nearly #163;408,000 and pay dividends of #163;496,000 (Mr Syddall owns 95 per cent of the company's shares).
By contrast, official accounts for colleges with similar levels of funding body grants, such as City and Islington College and Liverpool Community College, show that the principals were paid #163;168,000 and #163;133,000 respectively.
Despite the reduced level of profits, Elmfield was also able to invest an extra #163;4.7 million in property in 2011. As TES revealed last year, although Elmfield's entire income comes from public funds, it had previously bought family homes worth nearly #163;6 million, one of which was purchased from Mr Syddall himself. Elmfield Training said that the latest property investment is a balance sheet item that should not be considered as part of the company's profit and loss accounts.
Mr Syddall has defended his company's profits, arguing that the company is efficient and that it puts 40 per cent of post-tax profits into "social impact programmes" aimed at helping young people into employment.
"I set the business up. From my point of view, from a conscience perspective, for every #163;1 I have taken out over the last three or four years I have put #163;2 back into helping other people who have not been as lucky as me," Mr Syddall said.
When Elmfield's high level of profits was first revealed, the SFA said that for-profit private providers are entitled to use funding however they choose once they have met their contractual requirements. "As long as they deliver the services in accordance with the terms of the contract then they are entitled to make a profit and use it how they wish," a spokeswoman said.