One of the largest apprenticeship providers in England has called in the administrators after the Skills Funding Agency terminated their contract, FE Week has learned.

First4Skills, which holds an annual £15m apprenticeship allocation and is 60 percent owned by City of Liverpool College, this afternoon told around 200 ‘shocked’ staff to pack their belongings and leave.

It is understood as many as 6,500 apprentices will be affected, typically in the retail sector, some with the 14 subcontractors that share £4.7m in contracts.

Matthew Kopanski, an employee in the administration team at First4Skills, described  how “we were emailed today, and a minute later called into an office with the director and the administrator and told we have no job, no notice period and no redundancy pay from the company.

“It’s a massive shock and I’m disappointed with what has happened. I have rent to pay and holidays booked, as well as other day to day expenses.”

One First4Skills manager took to LinkedIn to say “this has been an absolute shock to all concerned. So many talented staff members, not to mention the learners, will be affected by this decision.”

Another this evening said: “I am utterly gutted! I have given First4Skills my all for over 10 years, working with some amazing people. I wish all of my colleagues to come out of this stronger than ever.”

It is believed that First4Skills were inspected by Ofsted in early February and in a few weeks their published report will confirm a grade four, which as a private training provider would typically lead to a funding contract termination.

When asked whether the Skills Funding Agency were aware of the situation, a DfE spokesperson said: “We have exercised our right to terminate First4Skills Limited’s contract.

“We are working to ensure learners’ programmes are not disrupted and that where required alternative training provision is identified and transfer arrangements made.

“We will work with employers through the National Apprenticeship Service to ensure they are fully involved in the transfer process.”

The First4Skills website has been taken down and this afternoon the phone went unanswered.

The majority owner of First4Skills, City of Liverpool College, has itself had “severe financial problems” requiring millions in bailouts according to the government..

In a scathing letter from the Skills Minister in October, the college was informed it was to be placed into “Administered College status with immediate effect.”

The letter said that despite the college spending money on lawyers to challenge the FE Commissioner process the “government has provided £2 million of Exceptional Financial Support to the college as a result of its failures of financial management this year”.

The Minister went on to say “the Commissioner’s initial assessment in April indicated that the existing leadership had failed to exercise adequate financial oversight, and the recent, incomplete stocktake also found that the board had not properly managed senior post holders or held them to account.

Financial mismanagement is not simply a matter of hitting annual budgets, but of proper financial planning which enables the college to invest in outcomes and quality.”

As a result of the ‘administered status’ the college is “required to consult the Skills Funding Agency about any fundamental changes affecting its operations or finances.”

At the time of publication City of Liverpool College had not been approached for comment.