A Public Accounts Committee report out today has criticised the government’s continued commitment to its multi-million pound contract with Learndirect.
The report shows that the Education and Skills Funding Agency and its predecessor the Skills Funding Agency gave Learndirect almost £500m in the academic years from 2013-14 to 2016-17.
However, the PAC also notes that the quality of Learndirect’s apprenticeships have been in steady decline - Ofsted gave it a rating of ‘good’ in March 2013 but downgraded this to the lowest possible rating of ‘inadequate’ in March 2017.
Learndirect instigated a legal challenge challenging the ‘inadequate’ rating, which delayed the publication of Ofsted’s inspection report.
The Department for Education would normally cancel an ‘inadequate’ provider’s contract and withdraw funding immediately, but Learndirect warned that this would impact its 75,000 learners.
The government has since said it is ending Learndirect’s contract to provide apprenticeships and adult education.
Learndirect received £121m from central government in 2016-17 and is expected to get another £105m in the current financial year, the PAC pointed out.
PAC chair Meg Hillier said: “It cannot be right that individual contractors should command such large sums of public money regardless of their performance.
“No commercial provider should be allowed to become so essential to the delivery of services that it cannot be allowed to fail.”
She added: “Government has a duty to manage taxpayers’ exposure to risk diligently and we urge it to act on the recommendations set out in our report.”
The PAC’s recommendations include the Department for Education and other government bodies developing a framework that identifies the risk of any commercial body becoming too big to fail.
Additionally, it has been suggested that EFSA should publish its expectations about the services that should be offered to subcontractors, in time for the next academic year.
ESFA provides no guidance on the support that providers should offer their subcontractors or the levels of support that might be merited by different levels of management fee, the PAC noted.
Ofsted has also been asked to develop a specific deferral policy for commercial providers by June 2018, to ensure that learners’ interest always take priority over the pursuit of profit.
The National Audit Office found the government continued to fund Learndirect, even after it had been judged ‘inadequate’, because it feared the loss of such a large provider. The NAO report was published in December last year.
A DfE spokesperson said: “The government is ending Learndirect’s contract to provide apprenticeships and adult education because of its failure to meet the high standards expected.
“Our priority has always been to protect learners and make sure they do not lose out and get the opportunity to complete their courses, a point previously acknowledged by the independent National Audit Office.
They added: “We continue to monitor Learndirect’s performance on a monthly basis and will respond in detail to the PAC’s report in due course.”
