Arbitration judge clears ‘ruined’ provider over fraud allegations

A Berkshire provider left in ruins after the Skills Funding Agency terminated its contract amid allegations of fraud has been cleared by an arbitration judge.

The agency severed its funding of NTQUK in March last year, saying it had “not submitted the requisite evidence” to support funding claims.

The move resulted in almost the entire 100-plus workforce at NTQUK losing their jobs, before the firm, which delivered apprenticeships in health and social care, customer service and business administration, went into administration.

However, its two former directors, Allan Bate (pictured left) and Alex Mackenzie (pictured right), and former HR manager, Jackie Rippington (pictured below), challenged the agency through arbitration.

They wanted to defend the 1,400-learner firm against agency claims, published at the time by FE Week, that there had been “significant errors and missing data which constitute a serious breach of contract”.

And the trio won rulings that the agency’s termination of contract without notice was unlawful and uncontractual.

It was also ruled that none of the breaches alleged by the agency amounted individually or collectively to a serious breach and that there had been no fraud or irregularity.

Mr Mackenzie told FE Week: “The original termination listed 23 breaches. By the time we got to the hearing in October that had decreased to three. By the time we left the hearing that decreased to two, and then by the end of the verdict, we ended up that there were no breaches at all.”

A number of arbitration rulings remain confidential, along with the financial details of an out of court settlement reached between the agency and NTQUK, he added.

An agency spokesperson said: “NTQUK and our chief executive agreed to resolve this dispute using arbitration.

“The clear legal position is that arbitration is confidential between the parties except in limited circumstances, for example, where the parties have agreed to waive confidentiality. We have not agreed to waive confidentiality.”

Nevertheless, the arbitration judge’s decision means the trio at NTQUK, rated as good by Ofsted in late 2009, are now looking to resurrect the firm having cleared its name.

“Here we are with a shell — nothing left compared to 18 months ago. There’s nobody left now,” said Mr Mackenzie, who said he had been legally advised to announce elements of the case in the public interest.

“The company has disappeared — it has gone into administration, but we’re trying to re-establish it with the same name…for the good name of the people who used to work for us.

“We’ve had some lovely emails from staff saying that they were really pleased to see that our name had been cleared with the verdict.”

He added: “Initially, a stigma suddenly appeared when you have your contract terminated, and then very quickly 100-plus people lost their jobs being made redundant. Then myself, Allan and Jackie were left to fight the arbitration — it was a very David and Goliath situation.

“It’s not been personal. It’s been obviously a business thing, but you do feel a little bereft knowing that a really good company and 100 people have lost their jobs and all that kind of thing.

“We had 13 years of developing a really good company that got to be in the top 10 per cent in the country in terms of quality, great provider, really good feel to the company.

“Thirteen years gone up in smoke — you have this reputation in the sector, in the industry and suddenly that’s taken away from you.

“So it’s one of the things that drove us to actually take the agency and ourselves through the arbitration process because we knew that it was wrong.”

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  1. Clive Dudley

    I just hope that, through the Federation of Small Businesses, they have sufficient funding to take this all the way to full compensation and will be back in business again soon! This sort of thing is happening too often to people who cannot fight back because they lack the funding.

    Good luck to them.

  2. Malcolm Tovey

    I think many public institutions need to stand up and take responsibility instead of hiding behind bureaucracy. No one seems to see the bigger picture. Just look at the disaster with the Information Authority causing 1000’s of people to spend months trying to run their businesses yet not knowing what funding they can expect to receive. Let alone the 100’s of FEConnect blogs that we all need to read – at least these bloggs keep us sane!

    What happens to the information authority – it gets abolished and now BIS have direct control. Wow! is that going to improve things – possibly not and, in the meantime, 1000’s of working hours are being lost by providers trying to sort out a National Disaster. Providers should be focusing on Apprenticeships, Traineeships, the learner, the employer and the Richard Review, (don’t get me started).

    Who is going to audit the auditors? Who is going to take responsibility for the millions spent on inadequate software? Who appointed the project mananagers? Whose head is going to roll? Where is the hidden agenda for the meetings where all this is planned.

    I am delighted that NTQUK have proved their case and I, sincerely, hope they can salvage something from their experiences.