Agency losses top £6m mark

More than £6m of Skills Funding Agency cash was written off last year, an increase of nearly 50 per cent on the previous year.

The agency’s annual report and accounts show a 43 per cent increase, £1.871m, in its losses for the 2012/13 academic year.

The overall loss of £6.192m was largely accounted for by dealings with just four providers, who either went into liquidation or administration. They were responsible for £5.989m of taxpayers’ money being lost.

They were named in the report, because they were over the identification threshold of £250,000, as Leicestershire-based UK E-Learning Limited (two cases totalling £2.253m), which went into liquidation in June last year; and Rotherham-based Mymar Training Limited (one case at £1.585m), which went into liquidation in February.

London-based Apprenticeship Training Limited (one case at £1.289m), which went into liquidation in October, was also listed, along with Bury-based Real Time Training Limited (two cases totalling £862,000), which went into administration in June last year.

A spokesperson for the agency, which was recognised last year by the Chartered Institute of Public Finance and Accountancy for outstanding financial management, said: “It is important to note that although the gross value has increased, the overall number of cases has reduced by 55 per cent from 51 in the 2011/12 academic year to 23 last year.”

The report shows that £5.877m of the losses related to funding for workplace training and apprenticeships, including Train to Gain. The rest applied to European Social Fund provision (£313,000) and administration expenditure (£2,000)

The agency spokesperson added: “The agency has done everything it can to ensure the recovery of funds is maximised and only writes off debts . . . where necessary and as a last resort.

“While £6m is a significant amount in absolute terms, in relative terms to the actual budget it represents approximately 0.15 per cent of the total funds — £4.1bn — allocated to more than 1,000 colleges and training providers during the year.”

According to the report, the agency can write off individual losses of less than £10,000. Above that figure, and up to £2m, they can only be signed off by the Department for Business, Innovation and Skills (BIS). Losses above £2m need to be run by the Treasury.

The report says BIS allowed 10 cases to be written off (totalling £6.174m — so financially almost all of the losses). There were 13, totalling £18,000, written off by the agency. The Treasury’s permission was not required in any of the cases.

A BIS spokesperson said: “The department only considers writing-off losses after careful appraisal of the facts and is satisfied that there is no feasible alternative.”