Two out of eight providers hit with an Ofsted grade four rating since February last year have been allowed to keep their Education Funding Agency (EFA) contracts, the Department for Education (DfE) has revealed.

It said the two that kept their contracts were given a chance to work with civil servants to improve performance.

The six other grade four organisations — five independent learning providers (ILPs) and one local authority — had their EFA contracts terminated, said the DfE.

But Gloucestershire-based independent specialist college Ruskin Mill kept its contract, as did adult and community learning provider Nacro.

Nacro has 2,655 learners and a current EFA allocation of £8.578m. The London-based national charity was given a grade four rating February last year and had previously been grade three.

Principal Josh Coleman said: “Working with government agencies and local authorities over this last year has given Nacro the opportunity to improve its education provision by getting back to basics and focusing on the individual learners’ experiences.”

It is believed Nacro has been visited by Ofsted again recently and is expecting a more favourable grading soon.

Ruskin Mill has 110 learners and a current EFA allocation of £1.188m. It was rated as inadequate by Ofsted after a visit in March, having previously been deemed outstanding following an inspection in 2011.

The college, which recently demoted its principal Elisabeth Johnson to deputy and drafted in new executive principal Oliver Cheney, declined to comment.

The news has led to a call from the Association of Employment and Learning Providers (AELP) for a review system that might allow ILPS graded as inadequate to also hold onto EFA contracts while working towards improvement.

Paul Warner (pictured), director of employment and skills for the AELP, said: “No such review system exists for ILPs, who normally suffer an automatic loss of contract without the chance of review or remediation.
“This variance in approach remains iniquitous and the AELP will continue to be lobbying for a more equitable system to be devised and implemented.”

A DfE spokesperson said: “We consider each case on its merits and have been working with Nacro and Ruskin Mill after they were given inadequate ratings by Ofsted in an effort to drive up standards.
“Where appropriate we will terminate contracts with commercial and

charitable education providers. Six organisations had their agreements terminated in 2013-14.

“When deciding whether to terminate contracts we take into account criteria such as the best interests of learners, strategic importance of provision, availability of replacement provision, and capacity to improve in making judgments about whether to terminate.”