A training provider in the north-east that held subcontracts worth more than £3 million last year is on the verge of collapse.
JB Skills Training Limited, based in Sunderland, is in talks about bringing in the administrators, according to its managing director Dave Macmillan.
He told FE Week it was “highly likely” the provider would be closing down within weeks.
JB Skills Training, set up in 2014, delivered mainly functional skills provision on behalf of 10 lead providers in 2017/18.
According to the Education and Skills Funding Agency’s most recent list of declared subcontractors, these contracts were worth a combined total of £2.8 million, with the largest being £781,150 with HIT Training.
In addition, it held one subcontract to deliver apprenticeship provision worth £378,000 on behalf of one lead, Brooklands College.
It also had its own non-levy contract worth £686,492, having secured a place on the register of apprenticeship training providers in May 2017.
Mr Macmillan told FE Week that the provider’s demise followed an investigation by the ESFA between August and December 2017.
That was prompted by a “whistleblowing” incident, which he said proved to be “unfounded”.
Nonetheless, all the provider’s prime contractors except HIT Training “withdrew funding” while the investigation was ongoing, during which time “we continued to support learners at our own costs”, he claimed.
Although the other lead providers returned once they got the all-clear from the ESFA “it was too late to be able to recover from the period where there were no earnings,” Mr Macmillan said.
Falling apprenticeship numbers were also partly to blame, he added.
The provider has just 11 learners on programme at the moment, all of whom are on apprenticeships, he said.
“We are working with the ESFA to find new providers who will continue with the learners positively.”
Jill Whittaker, managing director of HIT Training, confirmed that JB Skills Training had delivered functional skills training on their behalf.
Their completion rates were “very high”, and HIT’s own internal compliance team “rated them as grade two”.
“I am sorry to see them go as they are a good organisation with the interests of their learners at heart,” she added.
A Department for Education spokesperson said: “We do not comment on any investigations, ongoing or otherwise.”