The directors of a provider that had its government funding contracts terminated following an FE Week exposé only have to pay back £200,000 following its liquidation, despite owing nearly £3 million to creditors.
Furthermore, the amount, which is likely to go straight into the pockets of the insolvency practitioners to cover their fees, has been arrived at even though the directors’ new business is producing millions in profit.
In 2016, Paul and Joe Alekna switched the ownership of a successful provider they ran from one parent company – eResponse – to another, before transferring out £6 million, liquidating it and leaving learners and creditors on the hook for millions of pounds.
Meanwhile, the brothers continued to run another provider called Options 2 Workplace. But when FE Week exposed the situation, the Education and Skills Funding Agency cancelled its contract and eResponse – which changed its name to ER Training & Development Limited after the revelation – went insolvent in August that year.
A liquidator’s statement published in October 2018 shows the company owes £2,783,953 to creditors. The HMRC alone is owed £614,861.
FE Week has now learnt that a “settlement agreement” has been reached, which will see the directors pay £200,000 to the liquidation.
In January 2017 it was agreed that the liquidators would be paid a “set fee” of £125,743 for their work, according to the statement published in October.
It goes on to state that these fees have now been “exceeded”, and that the liquidator will “review the position as regards fees when the prospects of realising the remaining assets becomes clearer”.
The total fees being claimed by the insolvency practitioners are not known, but they are likely to be close to the £200,000 settlement – meaning there won’t be much left for creditors.
The insolvency practitioners and the directors were approached for comment but none provided a response at the time of going to press.
Since the insolvency of eResponse, the Aleknas have launched a recruitment firm called Workforce Solutions Group Ltd.
Its latest accounts show its turnover grew from £9.5 million in the five months from April 2016 to September 2016, to £26.75 million in the 2016-17 financial year.
The company made a gross profit that was just shy of £5 million in that year.
Workforce Solutions Group Ltd hasn’t gone without controversy since opening. In November FE Week revealed its links with a mysterious training provider called SCL Security Ltd, which has taken £16.5 million from Brooklands College over the past three years to deliver hundreds of level 3 IT apprenticeships, for mostly 16-to-18-year-olds, despite having fewer than 10 staff.
SCL Security, which has since been suspended from recruiting apprentices following the launch of an ESFA investigation into its operations, claims on the government’s Find Apprenticeship Training website to “operate training centres nationwide”, but its own website makes no reference to any training venues – the only address is for a head office in Kent.
However, a Google Maps search locates one of their training sites as “9 Church Road, Redditch” – the same building that Workforce Solutions Group operates out of.
Paul Alekna previously told FE Week that Workforce “specialises in temporary and permanent staffing, focusing in the manufacturing, logistics and transport, food manufacturing and office appointments sectors”, and insisted “that’s all we do”.
But he refused to deny that Workforce and SCL Security have a working relationship.
The investigation into SCL Security is ongoing. The principal and chief executive of Brooklands College, Gail Walker, has since resigned.