Learndirect was indeed given special treatment because the government considered it too big to fail, the Public Accounts Committee has concluded in its final report on the saga.
The scandal engulfing the nation’s biggest FE provider has engrossed the sector for nearly a year, and the PAC’s round-up asserts that it still “holds the whip-hand” over Whitehall and demanded more definitive action.
The PAC’s chair Meg Hillier (pictured above) told FE Week that there had been a “shocking message” to taxpayers and learners when the government “propped up” a “failing education provider” instead of stopping its funding.
She had put the wheels in motion for an investigation back in September when she referred the case to the National Audit Office.
It was a shocking message to taxpayers and learners when the government propped up a failing education provider
The Department for Education then allowed it to retain its contracts for almost a year – much more than the usual three-month termination period – and Learndirect is expecting to receive over £105 million in 2017/18.
The government and Learndirect have attempted to defend themselves ever since, denying it received “special treatment” and claiming it acted in the best interests of the tens of thousands of learners involved.
Seven months on and after the NAO’s report on the debacle, Ms Hillier has laid waste to this flimsy defence insisting that the provider leveraged its sizeable contracts across Whitehall to stay afloat.
She believes Learndirect’s failure should act as a wake-up call for the government to get a grip on individual contractors that grow so large they become too big to fail.
“In the case of Learndirect, thousands of learners have been let down amid poor oversight by the government and at significant public expense,” Ms Hillier said.
“There has been disruptive legal action and, finally, a scathing Ofsted report. Yet still Learndirect appears to hold the whip-hand.”
Having awarded the provider several vital contracts for a variety of public services, including with the Home Office, the PAC found the government had been restricted in its ability to take “decisive action” when the company’s apprenticeships provision began to fail.
Its achievement rate has dropped considerably over the last four years: since 2013/14, Learndirect has trained 58,283 apprentices but 24,712 of them have failed to achieve their qualifications.
During this time the provider was given over £150 million to deliver apprenticeships.
Ms Hillier said it “cannot be right” that individual contractors should command such large sums of public money regardless of their performance.
“No commercial provider should be allowed to become so essential to the delivery of services that it cannot be allowed to fail,” she continued.
Thousands of learners have been let down amid poor oversight by the government
“The government has a duty to manage taxpayers’ exposure to risk diligently and we urge it to act on the recommendations set out in our report.”
Learndirect’s funding comes to a halt at the end of July, but it remains to be seen as to whether the provider will even survive until then.
Its latest set of accounts, published in November, it showed that its long-term survival hinges on the success of its sister companies, including Learndirect Apprenticeships, over the next 12 months, as it is saddled with debts of more than £50 million.
In February, Learndirect entered redundancy talks with an unknown amount of its staff.
The PAC used its report to publish five recommendations for government and Ofsted to take action on to ensure a scandal like this is not repeated (which you can read here).
A DfE spokesperson said Learndirect’s contract to provide apprenticeships and adult education was coming to an end “because of its failure to meet the high standards expected”.
She reiterated that the department’s priority “has always been to protect learners” and make sure they “do not lose out and get the opportunity to complete their courses”.
Learndirect declined to comment.