Apprenticeships, Bootcamps, HGV, Skills reform

Large HGV training provider goes bust blaming inadequate funding

Over 100 staff and 2,000 learners, mostly on bootcamps, affected

Over 100 staff and 2,000 learners, mostly on bootcamps, affected

17 Nov 2022, 22:00

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A large training provider for the HGV industry has called in the administrators – blaming inadequate funding levels that are failing to cover the true cost of delivery.

System Group Ltd informed “dismayed” staff today of the business’s closure. It puts more than 100 people out of work and over 2,000 learners, who are mostly only skills bootcamps, having to find other places to complete their training.

System Group delivers transport and logistics apprenticeships to around 500 apprentices nationally and holds adult education budget contracts in the Greater Manchester Combined Authority and West Midlands Combined Authority worth £2 million and £300,000 respectively.

It had become one of the government’s main providers of HGV licence and driving skills bootcamps – a major skills shortage area that ministers are trying to tackle.

FE Week understands large employers such as Sainsbury’s, Next, and Royal Mail will be affected.

System Group, which is owned by investment firm Rcapital, made a loss of £1.1 million in the year ending April 2021, according to its latest accounts.

A spokesperson for Rcapital blamed insufficient government funding rates on the decision to close.

“The directors came to the difficult decision that System Group showed no real prospect of trading profitably, owing to the fact that the costs of training were significantly higher than the grants received from public bodies to train our students,” the spokesperson said.

“Especially given the current economic environment and high levels of inflation, System Group’s business model was therefore not sustainable.”

The comments will resonate with many other providers across the country who have complained that the funding offered for many courses and apprenticeships does not meet the true cost of delivery – an issue that has become particularly acute in recent months.

Association of Employment and Learning Providers chief executive Jane Hickie said: “Many training providers are extremely concerned about what the future holds, and, despite unprecedented inflation, some funding rates have not been reviewed for many years. Unless urgent action is taken, we will sadly see more providers driven out of the market, and therefore unable to deliver critical skills programmes.”

Eddie Williams and Tim Higgins of accounting firm PwC have been appointed as joint administrators of System Group.

PwC said: “Although the business has historically broken even, or has been marginally cash generative, it has been impacted by challenging conditions around a number of key education programmes in the sector and experienced severe liquidity challenges.”

System Group, headquartered in Liverpool, is rated ‘good’ by Ofsted and has delivered transport and logistics training for more than 25 years.

Employees who lost their job today told FE Week of their “dismay” and “anger” and hit out at management for a “lack of compassion” in how they communicated the closure.

“It is just before Christmas and people don’t know whether they’re going to be paid. Staff are rightly upset,” said one staff member who wished to remain unnamed.

System Group currently has 132 full time employees. Of those, 105 have been made redundant immediately, with 27 retained in the short term to support the administrators.

PwC’s Eddie Williams said: “We know that this will be an incredibly difficult time for staff and the learners. Our team will be doing everything possible to support the employees affected. In parallel, we will be rapidly engaging with retained employees and hope to provide them with an update around their position over the coming days.

“Fundamental to this will be the ongoing support of key government customers alongside local councils as a basis for allowing the company to continue to provide ongoing services and support to learners.”

A Department for Education spokesperson said: “We are working with the appointed administrators to minimise the impact on employers and learners.

“Our priority remains finding high quality alternative training providers for apprentices and anyone enrolled on Skills Bootcamps so they can complete their training.”

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13 Comments

  1. I understand that this is devastating for staff employers and students as has been mentioned in the article but what about the partner training providers involved that haven’t been paid for students that have had training and achieved licences – fuel used test fees paid and instructor wages- the sums of money owed are large and small training companies that just about managed to survive covid when DVSA didn’t provide any LGV tests are hit once again – there should be more protection in place to support us. System Group have treated everyone very poorly

  2. Your article does not mention the number of subcontractors that System group used to deliver funded programmes that have not been paid. There are a number of small training providers including charities, that assisted System Group to deliver Bootcamps. These providers are owed tens of thousands of pounds for training that has been completed, where is the money? This will lead to good training providers going out of business. The DFE or ESFA need to address this, they procured and awarded the contracts to System Group. Its strange how, when you consider in the article above you mention System Group made losses. Yet again, government departments favour the ‘large provider’ with slick marketing and expensive bid writers over the local provider that is better positioned to do the job and provides a better service. Although, how are small providers expected to compete in tendering opportunities when they are aimed at large providers? Bigger is not better, it usually means there are far more holes in delivery and compliance. Perhaps the government departments should spend time supporting small providers on a local basis and we might not have to read about large providers and colleges getting in to these situations.

  3. Anthony Chaplin

    Having worked for them, the management showed no leadership, relied on skills coaches to carry the workload, forcing falsification of paperwork to generate income, leaving learners without the courses and promised support, very sad to say the few at the top looked after their own interests without regard for the staff and clients.

  4. I’m one of those 2000 aff6and all I can say is shock. I’ve been signed since December 2021, and my class 1 course was booked since July,and it’s been cancelled. I don’t know qhat to do really.

  5. I was a learner on one such apprenticeship. I can tell you that Systems group were incredibly badly managed and have plenty of other things to say as well I wouldn’t be surprised if the lack of funding was due to the amount of learners that’s withdrew from the course.

  6. Annonymous

    Yes I agree with the learners below. I’ve been on a System Group Skills Bootcamp (supposed to last 12 weeks) since April and it still isn’t complete. There was always a complete lack of communication from System Group to the point that I contacted the DOE who just said basically that they were doing their best. Government funded courses that never got completed, and they have proceeded to not pay the real training companies that they subcontracted to actually teach the students.

    Just read their reviews on Google and spot the obvious fake ones (5 star) and the real ones (1 star). They have held up the repairing of the countries infrastructure during a difficult time and put many people’s careers on hold.

  7. I was a learner I had a resit booked for 1st December. I had email from 2 start my training provider. Stating that resit was cancelled. Absolutely shock. What am I going to do now. Don’t think I can get anymore funding.

  8. I started the bootcamp in February. Finally got round to the 14th Nov to start my driver training with test booked for 21st Nov. Got to the site and was told to go home there would be no driver training or test as system Group was in trouble. I had had no communication from system Group I was so angry! I’ve had very little communication with system Group since, I’ve had to chase them for information but that has not been forthcoming. I’ve asked if I should find another training provider myself or if they will find one for me but no one has said anything. I have no one to contact to find any information totally left in the dark with this what…who do I talk to about this as I want to complete the course.

  9. I started with system groups as a learner around may/June. It’s November now and I have only done the theory test and Im finding out by this article that the business has closed down. I have not been in work since I started the course as I got it through the job centre. This is a nightmare, I can’t believe system group didn’t even message to notify or anything. This is really wrong!

  10. More lies from System Group. They’re complaining that it’s all the government’s fault when they are the ones who should be held to account. They are, or were, a crooked middle-man outfit who took all the funding they could get their grubby little mitts on and didn’t pass it on to any of the training providers. I myself was on a HGV course run by them and in ten months of ‘training’ I received what could have been provided by a legitimate trainer in two to three weeks. Thumbs down to the Civil Service for performing zero due diligence, if they knew their job they should have focused on the level of training and professionalism and not on the fancy marketing pitch. All round shit show.

  11. I have also been affected by SystemGroup and its understandable administration.
    I officially started my training on 20/12/2021

    I was training for my HGV through SystemGroup. I was first introduced to the company by a small business that helped me with some separate issues during the pandemic.

    Firstly. I was told I would be obtaining my full class 1 C+E HGV. This was what I was working towards through SystemGroup, and this is what I tailored all my revision towards for the theory test. It was the subcontractor that SystemGroup put me in contact with that informed me that I was only going to be obtaining a class 2 C rigid 32 tonne licence. I was fuming. SystemGroup denied signing me up for my full class 1 C+E and then told me I was always signed up for a standard class C licence.

    Secondly There was virtually no communication other than via “whatsapp” What professional company uses an instant messenger as a form of communication, and the occasional email.

    Thirdly, and the most surprising to me was my medical. It was performed by a doctor who had been working all night, and had come in straight from work to do an extra job performing medical exams for HGV candidates. There was no medical, it was a few questions and incredibly short, I remember wondering “what was the point of that” I even said to the other candidates waiting outside, “don’t worry you have all passed” I had been hospitalised in September, I had caught covid 19 at the time when the Delta variant was rife. Although I was virus free, I was struggling with my breathing noticeably and I was generally not well.

    Finally, the process, signing up, revising for my theory, passing my theory, passing the medical, finally being allocated a training spot through the subcontract driver training company and subsequently being told my training was over by this company has taken well over a year.

    I have to say, the subcontract company is still in touch with me, and despite them loosing a vast amount of money they are my only point of contact and they are trying to help the numerous stranded trainees including myself.

    But I do not know where I stand. SystemGroup was a terrible company, and if I am honest I am not one bit surprised that they are no longer trading. I wasted a year of my life with this company, pinning all my hopes on that elusive HGV licence that I was working to achieve.

    I only need to pass my practical and obtain my module 4. But I have no clue how to proceed or where to go, all my hopes are pinned on a company that has lost thousands of pounds thanks to SystemGroup and they are a driver training provider, it is not their job to clean up this catastrophe left by a company that was clearly run by non professionals.

  12. Andrew Hawkins

    When did this company go into liquidation I have been told November yet l started my training with Trailer Training UK less than three months ago and l paid for the course with my own money. I was talking to Sarah Davis less than three weeks ago as l was waiting for my license to return from the DVLA so how is this all even happening