A group of leading training providers is gearing up for collective action against the government’s adult education budget procurement process, FE Week can reveal.
The coalition is made up of organisations which say they’ve suffered financial loss and damage to their business as a result of the recent tender – and they believe they have sufficient grounds to launch a judicial review against the Secretary of State for Education, Justine Greening, or even appeal to the EU Commission.
They even allege that the Education and Skills Funding Agency was negligent of – or even complicit in – corrupt practice under the Public Procurement Act 2015, which states that a procurement must not be interfered with once underway.
They also believe the ESFA has breached the Public Contracts Regulations 2015, specifically with its “failure to treat bidders equally and without discrimination, failure to act in transparent and proportionate manner and artificially narrowing competition by unduly favouring or disadvantaging bidders”.
The ESFA significantly changed its original tender rules this week, almost at the end of a tender process that has been going on for much of 2017 in various guises.
Its original policy, published in January 2017, stipulated that providers which did not bid or were unsuccessful would be offered a contract worth no more than £589,148.
But the ESFA this week sent letters to such providers, telling them that they would now receive 75 per cent of the value of their previous contract to use in 2017/18.
Among them is the nation’s biggest FE provider, Learndirect, which the DfE admitted this week had at first applied for funds, but which later withdrew its tender.
Learndirect had a contract worth £60 million last year, and stands to receive roughly £45 million to recruit and train adult learners until July 2018, even though it was recently slapped with an ‘inadequate’ rating from Ofsted – a situation which usually prompts the DfE to terminate a provider’s funding.
Other providers which made successful bids, on the other hand, have seen their AEBs slashed.
Somerset Skills & Learning, a provider rated ‘good’ by Ofsted, and which has been running in various forms for more than 100 years, has been awarded a contract for November 2017 to July 2018 worth just three per cent of its previous budget and faces catastrophic repercussions.
Another independent provider which did not wish to be named, received 30 per cent of the money it had at its disposal last year, even though it delivers “priority provision in priority local authority areas”, forcing it to lead the legal charge against the entire tender.
Had it been known the ESFA would change its rules and reduce allocations by just 25 per cent for those that did not participate, many providers may well have found themselves ignoring the bidding round to secure sufficient funding to survive.
The unnamed provider told FE Week it had “fully believed” that unsuccessful or non-bidders would receive a maximum of £589,148 when it applied.
“After protecting grant funded institutions and Learndirect, the ESFA contrived to open up £65 million of AEB to the near 4,000 organisations listed on register of training organisations,” a spokesperson said.
“Existing contract holders have been discriminated against at every step of the process and now face having to make large scale redundancies, with the ESFA absolving itself from their legal TUPE responsibilities, despite explicitly stating TUPE applies in the three-month contract extensions.”
The spokesperson alleged that the procurement process had been “unfair, inconsistent and illegal” from start to finish.
The AEB tender for private providers has been dogged by delays. Results were supposed to be released on May 19 after it was first launched on January 27, for a sum that originally came to just £110 million.
The organisations involved in the legal challenge do not wish to be identified at this stage for fear of government retribution, but they are seeking to get in touch with others in a similar position.
Mark Dawe, chief executive of the Association of Employment and Learning Providers said: “We understand the anger and frustration of many of our members and we hope to reach a resolution with the ESFA shortly without court action being necessary.”
The Department for Education was not contacted for comment.
Providers that wish to get in touch with the group can do so in confidence by emailing email@example.com.