Did the government advise Learndirect to withdraw their AEB tender?

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The Learndirect saga has taken a fresh twist today, after a government spokesperson admitted that the nation’s largest FE provider submitted and then withdrew a bid to the adult education budget tender, contrary to previous briefings.

It emerged yesterday that despite its recent ‘inadequate’ from Ofsted, Learndirect would receive another £45 million from the AEB budget for use until next July.

The Department for Education insisted at the time that the provider was getting the money even though it hadn’t submitted a bid under the tender process.

Now, however, a trusted source has informed us otherwise, and a DfE spokesperson has corroborated following pressure from FE Week today.

When exactly the bid was cancelled is unknown, but this now leaves serious questions over whether it was withdrawn on the advice of civil servants, in order to avoid future legal challenges as part of a public procurement process.

The Education and Skills Funding Agency’s rules are clear on funding tenders: providers with Ofsted’s lowest rating are much less likely to receive any cash.

Instead, Learndirect will receive 75 per cent of the £60 million it was allocated in 2016/17.

This new rule was also confirmed yesterday after the ESFA sent letters to providers informing them that if they did not participate in the procurement or were unsuccessful, they would receive three quarters of the value of their previous contract to use in 2017/18.

This is a significant change to the original tender rules, published in January 2017, which stipulated that providers which did not bid or were unsuccessful would be offered a contract worth no more than £589,148.

FE Week has learned, meanwhile, of other providers which were successful in the AEB tender, and which have ‘good’ Ofsted ratings, which have had their allocations slashed by up to 97 per cent.

Some providers are even gearing up to launch a judicial review against the government’s decisions regarding Learndirect.

In a statement, the DfE wrote: “Learndirect Ltd did originally submit a bid for the AEB procurement but then decided to withdraw it. They were treated in terms of contract award like any other provider not taking part in the procurement.”

The tender deadline was in February, Learndirect was inspected in March and the results, subsequently delayed, were due out in May.

It remains unclear how online bids can be withdrawn once submitted, given the communication facility is disabled and tender rules state that bidders cannot actively pursue any communication with the ESFA by other means.

FE Week is continuing to seek clear answers from the DfE on when, how and why Learndirect withdrew its AEB tender bid.

Learndirect Ltd had not responded to our request for comment at the time of publication.



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11 Comments

  1. Simon Hughes

    Is that the distant sound of ‘successful’ providers rushing to ‘withdraw’ their bids that I can hear? The 75% run down contract for unsuccessful and non-bidders has materialised mid process to reverse engineer a £45m farewell ‘deal’ for Learndirect. There was certainly no mention of it at the start of the process. This is unfair. This is illegal. This is inconsistent. This is a national scandal.

  2. Simon Jones

    I feel sorry for the LD subcontractors as even if they are good providers will be damaged by their scandal.

    I assume that LD will continue their massive top slice.

    I remember a few years back when LD was given an extra £5m just because the SFA had it left over. Its never been a level playing field.

  3. It is time for a root and branch review of the process. Community based and main stream providers are deeply concerned at the way contracts are now awarded. There should be an independant enquiry into the whole opprocess and external scrutiny to verify the
    tendering decisions have been fair and consistency applied in the awards in line with stated criteria at the time if tendering. To introduce new criteria during the process is unfair.

  4. Matt Garvey

    I have a feeling of a cosy consensus among the ESFA and certain provider types. The ESFA want a free market for most while at the same time offering extra help and protection for others. The laughable ROATP process that saw colleges hastily added and this LearnDirect tragedy is evidence that the system is a feudal hierarchy with some institutions receiving grace and favour while everyone else gets short shrift. The class system is alive and well in the WBL sector.

  5. This is exactly what i said may of happened in my comments yesterday, on the learn direct special treatments article. this is now becoming a whole joke and the Serious Fraud Office should get involved as something is not right and some people think they can get away with anything

  6. Sandra Chambers

    “We have agreed to extend Learndirect’s contract for adult education in order to protect the large number of learners and avoid disruption to other government services delivered by this provider.” And with this, Ann Milton invalidates the entire AEB procurement process. And puts the ESFA in grave trouble. I don’t think she realised the wider implications of publishing this response. The Minister has just inadvertently confessed to colluding with Learndirect to keep them financially viable as well as breaching Public Contracts Regulations and the Public Procurement Act.

    • THE AEB CONTRACTED PART OF LEARNDIRECT DID NOT RECIEVE A GRADE 4 OFSTED. THE HIGH COURT JUDGE REJECTING THEIR APPEAL ON THE GRADE 4 ONLY DID THIS ON THE BASIS THAT LEARNDIRECT DID NOT PRESENT EVIDENCE FROM AN INDEPENDENT EXPERT. THERE HAVE BEEN QUESTIONS OVER OFSTEDS SUITABILITY TO INSPECT FE PROVIDERS AND THE RESULTS OF THE INSPECTIONS THAT THEY HAVE CARRIED OUT. PERHAPS FE WEEK WOULD LIKE TO INVESTIGATE THIS MORE?

      • Dave Spart

        No need to shout Tim, we cam hear you perfectly well. Let me just correct some errors in your post. When you say “the AEB contracted part of learndirect did not receive a grade 4 Ofsted” I presume you mean that their adult learning programmes were graded as ‘requires improvement’. However, the supposed rules relate to the provider as a whole, and the Inadequate grade for Outcomes for Learners clearly relates to all aspects of provision. Your statement that their appeal was “only” thrown out because “they did not present evidence from an independent expert” is both inaccurate and hilarious. They did not present *any* evidence, and chose not to cross-examine the allegedly biased inspector; it is clear their allegations and their case had absolutely no merit and were a desperate attempt (apparently at least partially successful) to prevent the government turning off the money tap.

        You appear to resent the fact that FE Week has investigated whether a provider – operating for private profit – has benefitted from preferential treatment. Do you have a vested interest in this I wonder?

  7. The New Minister came in and was we are told going to be a person to do things quickly! Well in this case she appears to be not very quick, in fact slow. Also the logic of what was it Open Fair and Transparent well Minister Mrs May is very bust with Brexit what are you doing.
    I can show 12 things that are 100% wrong and that is about 2 a month in the commercial world she would have to be calling in the staff and saying sorry we are closing down. However she is not in business she is paid by the tax payers and we are the tax payers. I concur with WhattheButlersaw
    Time for Panorama to do a special – or should it be Watchdog/Rogue Traders….??