An investigation into Elmfield Training will continue despite part of the company having been sold to a nursing homes training provider, FE Week can reveal.

Elmfield, which was slapped with a notice of concern in June following a grade four Ofsted inspection result, contacted staff more than two weeks ago to say it was taking steps to put the company into administration.

Last week it announced that it had appointed Deloitte as administrators and the majority of the company would be sold to EQL, a subsidiary of CareTech.

The move followed allegations against Elmfield of malpractice, in relation to its apprenticeship contract with supermarket giant Morrisons, that featured in a BBC investigation.

It was alleged that Elmfield signed Morrisons staff up to apprenticeship programmes they had declined, enabling the provider to claim public funding for training.

A separate probe into such allegations was launched by the Skills Funding Agency which, it said, was continuing despite the sale of Elmfield’s non-Morrisons business.

An agency spokesperson said: “Our investigation into the allegations we have received concerning Elmfield is ongoing and we are currently reviewing additional evidence which has been supplied to us.”

A Deloitte spokesperson said the sale had secured more than 300 jobs and would ensure that around 5,700 learners on former Elmfield programmes would have continuity.

A CareTech spokesperson said the acquisition has been completed as part of a pre-pack insolvency of Elmfield for a total “cash consideration” of £1.5m. The on-going working capital costs of the business would be funded from CareTech’s cash, they said.

Farouq Sheikh, CareTech’s executive chairman, said: “CareTech is a principled provider of social care with a strong public service ethos.

“Our support services for young people in transition to adult life are well known for their outstanding results and for some time we have felt that a new division focusing on apprenticeships would enhance and support many aspects of our outcomes-based approach.”

Meanwhile, all new Morrisons apprenticeships are provided by NCG (formerly Newcastle College Group), but Elmfield still has responsibility for the learners it started.

But with Elmfield’s contract to provide training to staff at supermarket giant Morrisons not included in the sale, a number of staff working on the contract now face redundancy if no buyer can be found.

However, Elmfield staff working on the Morrisons contract were told by administrators, in an email seen by FE Week, that: “We are in advanced discussions with another provider with a view to transferring this contract to that provider. We hope to complete this transfer in the next few days.”

At the time of going to press, no buyer for Elmfield’s Morrisons contract had been found. There is no suggestion of wrong doing on the part of Morrisons, EQL or Care Tech.