Learndirect special treatment update: will it be less than £1m or over £30m to ‘wind-down’ AEB?


Learndirect’s Adult Education Budget “wind-down” allocation value to July 2018 hangs in the balance, after they failed to tender for funding, FE Week can exclusively reveal.

Based on a government contracting presentation (see image below) their AEB allocation should now automatically fall from £60m last year to under £1m, or £589,148 to be exact.

FE Week has heard that the Education and Skills Funding Agency, in light of contract extensions, were reviewing the policy for all providers that had not tendered and that this might involve a minimum allocation of 75 percent of the 2016/17 figure, meaning £45m for Learndirect (which over nine months would be around £34m).

Learndirect was eligible to tender for AEB funding and remains unclear why Learndirect did not conclude the tendering process. However, given their recent Ofsted grade four the likelihood of being successful was slim.

The tender specification says the “SFA reserves the right not to award a contract to any Applicant awarded Grade four for Overall Effectiveness, after an inspection by Ofsted.

“This also applies if the inspection takes place between the evaluation of ITT responses and the SFA’s decision to issue a contract.”

Learndirect, along with all private training providers, has been given a three month extension to their 2016/17 AEB contract, until October 2017, after the tender evaluation process was dogged by delays.

And, as reported by FE Week, the notification of tender result process on 4 August, originally planned for 19 May, has descended into chaos after many providers with high scores failed to win any funding.

There is then a “mandatory 10 day stand still period” before contracts are awarded, but when FE Week asked about the tendering a DfE spokesperson yesterday said: “We are unable to comment on this due to outstanding queries received in the standstill period.”

After waiting for nearly a week for a response concerning Learndirect’s AEB funding from November 2017 to July 2018, a spokesperson for the DfE told FE Week this afternoon that this was currently commercially sensitive but they were still to tell Learndirect, and all other providers that did not tender.

Learndirect’s allocation for the AEB was just over £60m last year, ten times larger than the AEB for the second largest private training provider. 

The AEB tender for private training providers was launched on 27 January and originally £110m for 2017/18.

Questions over Learndirect’s AEB allocation and contract extension values, follow the Department for Education admitting last week it will continue to fund the nation’s biggest FE provider for current and new students until July 31, 2018, following its ‘inadequate’ Ofsted rating.

The ESFA updated their AEB funding rules, which now includes a section from paragraph 282 for: “Existing contract for service providers that did not enter, or were unsuccessful in the AEB procurement”. Click here

UPDATE on 25 August: The AELP is reporting that the “ESFA have confirmed that providers who did not participate or who were unsuccessful in the recent AEB procurement will be notified of the value of their November 2017 to July 2018 contract extension next week (w/c 29 August).”

A Skills Funding Agency presentation, dated 2 February 2017. https://youtu.be/5ZMvRRqNeDc

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