Moves to tackle poor provision by Elmfield were ordered personally by Skills Minister Matthew Hancock before its inadequate grading from Ofsted had even been published, FE Week can reveal.

The minister is understood to have been furious with the provider following success rates, as reported in FE Week two months ago, showing just 47.5 per cent of Elmfield’s 13,420 leavers in the retail and wholesale sector, aged 25+, walked away with an apprenticeship certificate in 2011/12.

He wanted action to protect learners, which resulted in the Skills Funding Agency issuing a notice of serious breach this month after the Ofsted report, and stopping Elmfield taking on new learners.

Ofsted found outcomes for learners were inadequate and the majority of apprentices did not complete their framework within the planned time.

A spokesperson for the Department for Business, Innovation and Skills said: “We decided to invoke the right to impose additional conditions of funding within the breach notice and stopped Elmfield taking on any more learners.

“This underlines our tough approach to protect students and root out poor performance wherever it occurs.”

An agency spokesperson confirmed action against Elmfield, which delivers training for more than 11,000 learners, including apprentices at Barclays, UK Mail and Eon, had been agreed before the publication of the Ofsted report and discussed with the provider.

“Prior to the report being published and due to the serious nature of the concerns, the agency decided in advance to invoke its right to impose additional conditions of funding within the breach notice,” she said.

The Ofsted grading also resulted in the resignation of Elmfield founder and chief executive Ged Syddall, although he is believed to remain its majority shareholder.

The agency spokesperson added: “We have instructed Elmfield that while under a notice of serious breach it will not take on any new learners, work with any new employers or be awarded growth, until we can be assured provision has improved to an acceptable standard.

“Failure to make satisfactory progress may lead to termination of the contract. An inadequate re-inspection would lead to contract termination.”

Despite the grading blow, Ofsted acknowledged Elmfield’s success rates in newer areas of provision, accounting for around 20 per cent of its delivery and including banking, were good, although some elements required improvement.

Barclays said it was standing by Elmfield, even though it would be unable to take on new apprentices.

A Barclays spokesperson said: “While these Ofsted results predate our programme, the Ofsted report itself is highly complimentary of the success rates Elmfield has achieved for Barclays.

“We therefore look forward to demonstrating the strong results that our programme is delivering in future inspections.”

UK Mail and Eon declined to comment.

A spokesperson for Elmfield, which has 413 staff, said: “Elmfield is continuing to work closely with the Skills Funding Agency and can confirm our contract allocation for 2013/14 is currently under review.

“This is due to our contract with Morrisons coming to an end later this month. A revision of our contract arrangements for the forthcoming year is expected shortly.”