A training provider has laid off all 30 staff and shut its door to hundreds of young engineering apprentices, FE Week can reveal.
West Yorkshire-based Kirkdale Industrial Training Services Limited (KITS), an Ofsted grade 2 registered charity that is more than 50 years old, informed their staff and the government of the decision to close on Tuesday.
A total of 278 young apprentices, typically in the engineering and manufacturing sector, have now been left without a training provider.
The decision also impacts 62 learners on study programmes taught by KITS through a subcontract with Calderdale College.
While this publication did not receive comment from the charity’s owners about the situation at the time of going to press, it is understood the main reason for pulling out of delivery was coronavirus related.
KITS website has been taken down and its phone went unanswered.
The Department for Education said their officials are now working with the company to help make sure their apprentices are able to continue their studies with alternative providers.
Calderdale College, which declined to comment, will be responsible for making alternative arrangements for the young people on study programmes so they can complete their learning.
While KITS is understood to be one of the first apprenticeship providers to shut up shop as a result of the Covid-19 pandemic, it did report a healthy financial position in its latest accounts for the year ending March 2019.
They show a £122,259 surplus and state that the charity’s financial position “remains strong” with cash in the bank of £2.2 million.
KITS decision to cease trading came in the same week the Institute for Apprenticeships and Technical Education published their latest board minutes and warned of up to 300 “at risk” providers.
The minutes, for a meeting in March, state: “The chief executive outlined the anticipated impact of Covid-19 on the apprenticeship programme. It was noted that 300 independent training providers/ colleges are estimated to be at risk, and that there were reports of disruption to apprenticeship assessments.
“It was further noted that a poor economic outlook for employers may reduce levy receipts, affecting apprenticeship starts and completion rates.”
A spokesperson for the quango told FE Week the 300 figure was an “early possible estimate” of what the impact of Covid-19 might be, based on a consensus of other informed stakeholders, such as the Association of Employment and Learning Providers.
Since March, the AELP has been warning government that providers could soon go bust as a result of the pandemic, without extra financial support as apprenticeship starts drop off.
Data published last week by the DfE showed that from March 23 – when lockdown began – to May 31 there were 26,090 starts compared to the 50,050 reported between those months in 2019 – a fall of 47.9 per cent.
While the ESFA has offered providers some form of Covid-19 supplier relief, in which they receive payment in advance of delivery, it excludes the majority of apprenticeships – those offered by levy-paying employers.