NAO report: So which minister signed off on Learndirect's special treatment?

The special treatment afforded to Learndirect after its infamous grade four from Ofsted was actually a ministerial decision, even though the ESFA’s former boss attempted to take “personal responsibility” for it, the National Audit Office has revealed.

The country’s public spending watchdog has this morning published its much-anticipated report into the circumstances surrounding the monitoring, inspection and funding at the nation’s biggest FE provider.

It has for the first time shown that the decision to continue funding Learndirect until July 31 next year was ultimately made by a Department for Education minister, even though Peter Lauener publicly claimed it had been his decision.

The NAO’s report states that between 2015 and August 2017, Ofsted awarded an ‘inadequate’ rating to 26 providers aside from Learndirect. In 23 cases, the ESFA terminated their contracts with a notice period of three months or fewer. The other three cases involved four- or six-month notice periods.

In May this year, around six weeks after Ofsted’s visit to Learndirect, the ESFA concluded that continuing to fund the provider for 2017/18 would “best meet the interests of learners”, allowing the company to wind down and let learners “complete their courses with minimal disruption”.

This was because the agency believed that the provider’s size of made it an “unusual case, to which special considerations should apply”.

The agency however “recognised” that such a decision would “require ministerial review”, which “would not be possible until after the general election”. Accordingly, “ESFA put a formal submission to the minister on July 2017 4”, the report says.

This was the only time ministers have reviewed and approved an ESFA decision to continue funding a provider with a grade four, the NAO found.

The DfE declined to comment directly on which minister took the final decision or when it was made.

During a Public Accounts Committee meeting in October, Mr Lauener said it had been his decision to continue funding Learndirect until next July, after Meg Hillier, the committee’s chair, asked him if the provider “was too big to fail”.

ESFA believed that the size of Learndirect Ltd made it an unusual case, to which special considerations should apply

At the same meeting, Jonathan Slater, the DfE’s permanent secretary, denied that the Learndirect had been given special treatment.

But as the NAO has today confirmed, no other ‘inadequate’ training provider has ever been given a full year to run down its contracts.

After reading the report, Ms Hillier said the government had “backed itself into a corner by letting itself become dependent on Learndirect”.

“At a time when many further education providers are struggling with funding restraint, it is disgraceful that the department should be continuing to spend millions of pounds of taxpayers’ money on an inadequate provider,” she said.

“Our priority throughout has been the protection of learners and ensuring that they do not lose out – a point that has been acknowledged by the NAO,” said a DfE spokesperson.

“We set the contract wind-down period to July 2018, which will give learners the opportunity to complete their courses, and will continue to monitor performance on a monthly basis to ensure learners and other service users are not affected.

“This process has demonstrated that where providers do not meet the standards we expect, we will not hesitate to take action.”

FE Week has pulled out the other main findings of the NAO’s report, which you can read here, along with a statement from Learndirect.