This evening the Department for Education said that it will not, as would typically be the case, serve a three-month termination notice on Learndirect contracts when its Ofsted grade four is published on Thursday.

During the judicial review hearing, as reported in FE Week, the Learndirect lawyer said they expected to be given a three-month termination notice, based on a conversation between the managing director, Andy Palmer, and the Education and Skills Funding Agency.

The conversation was described as ending with the ESFA saying they would not give Learndirect special treatment.

However, in a move that appears to be an intervention from the highest levels within the DfE, Learndirect has been given an additional eight and a half months, on top of the typical three months, so will receive funding until July 2018.

The DfE spokesperson told the Financial Times the special treatment is to minimise disruption for learners. 

A spokesperson said: “Following the publication of Ofsted’s report ‎we are working closely with Learndirect, employers and apprentices to find a course of action that ensures learners can complete their courses with minimal disruption.”

All adult education budget contracts end in July 2018 and the DfE spokesperson said that Learndirect would not get the opportunity for an extension.

But in a move that looks contrary to the claim that special treatment is simply to avoid disruption to existing students, the DfE spokesman also said “yes” when asked if Learndirect would be permitted to the recruit new and additional adult education budget funded learners until July 2018.

The move will come as a surprise not only to Learndirect, but to the rest of the further education sector.

In March, another very large provider with thousands of apprentices, First4Skills, was served with a three-month termination notice following a grade four.

On receiving the notice, they immediately brought in the administrators, despite having over £700,000 in the bank and three months remaining on their ESFA contract.

It is understood the Learndirect funding will end in July 2018, for apprenticeship and adult education budget funding.

However, it seems despite the termination, this will not stop Learndirect receiving funding for apprentices beyond July 2018.

In March 2016 the owners of Learndirect Ltd incorporated Learndirect Apprenticeships Ltd and successfully applied to the Register of Apprenticeship Training Providers with the new company.

Learndirect Apprenticeships Ltd also acts as a subcontractor, according to the latest ESFA list, contracting with Learndirect Ltd, as well as the supermarket giant Tesco.

As previously reported, when Learndirect were told in March they were to be inspected, they failed in an attempt to persuade Ofsted to exclude the apprenticeship provision on the basis they were moving it all to the new company.

FE Week understands that despite the grade four and the ESFA Notice of Serious Breach for Learndirect Ltd, this does not apply to the new company Learndirect Apprenticeships Ltd, so apprenticeship delivery is expected to continue.

The DfE has confirmed that neither of the two Learndirect companies have a non-levy funding allocation.

Mark Dawe, chief executive of the Association of Employment and Learning Providers, to which Learndirect is a member, told FE Week: “If special treatment has been given, then the government must be clear about what it is and whether in future it will apply to all providers whatever their size.

“Protection of the interests of current learners may be a sound motive for adopting this approach, but not if the quality of provision is poor.  There are a large number of high quality providers ready to take on the affected learners and potentially offer them an improved learning experience.”

FE Week has sought clarification from the DfE as to whether Learndirect Ltd will be permitted to recruit any new apprentices or adult education budget funded learners.