Lifetime Training taken over by ‘lenders’ amid ESFA investigation

England’s largest apprenticeship provider could be hit with £13.7m clawback

England’s largest apprenticeship provider could be hit with £13.7m clawback

25 Nov 2022, 14:41

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England’s largest apprenticeship provider has been taken over by its “lenders” amid an investigation that could result in the government demanding over £13 million is repaid.

Lifetime Training had been owned by private equity parent Silverfleet Capital since 2016 but has now been sold to Alcentra – one of the provider’s lenders which specialises in credit management, private credit and structured credit strategies.

Jon Graham, Lifetime Training’s chief executive, claimed the sale is part of the “natural cycle of private equity and puts the business on firm, secure footing for the future”.

FE Week understands the Education and Skills Funding Agency is about to commence an audit into the provider after they raised concerns over overclaimed funding.

The provider’s newly published accounts state: “A funding partner of the company communicated its desire to further audit past trading and referenced a figure of £13.7 million.

“The amount and timing of any contingent liability is uncertain and a reasonable estimate cannot be made at this time and therefore a provision has not been included in the financial statements. The company has retained legal counsel regarding this matter.”

Graham claimed Lifetime Training is being audited as part of the ESFA’s “regular audit cycle of all independent training providers” but added that the investigation is specifically looking into the use of additional learning support funding, which is available to meet the costs of putting in place reasonable adjustments for apprentices with a learning difficulty or disability.

Lifetime Training’s accounts show there was an additional £1.46 million clawback, which has already been repaid, to the Student Loans Company after an “error” was identified which was “directly attributable to funding for apprenticeships for the years ended 31 July 2016, 2017 and 2018”.

The reason for the refund was because Lifetime Training’s systems “did not retain sufficient evidence to support their adherence to the requirements of the ESFA for these learners for the periods mentioned”, the accounts state.

Lifetime Training was founded in 1995 and currently trains around 20,000 apprentices and learners. The firm has recruited more apprentices and secured more levy funding than any other provider in the country for several years, delivering to big-name employers including the NHS, KFC, McDonalds, Wetherspoons, B&Q and David Lloyd, as well as the civil service.

The provider was recently hit with a ‘requires improvement’ report from Ofsted, in which inspectors criticised the firm’s focus on financial performance and starts over quality, as well as a lack of off-the-job training and poor achievement rates.

Lifetime Training has made several leadership changes this year, including bringing in Geoff Russell, who used to head up the Skills Funding Agency, as chair and Jon Graham as chief executive.

The firm’s accounts show that its highest paid director received a salary of £430,362.

Lifetime Training has almost 1,000 staff.

The firm’s turnover increased to £71.1 million compared to £59.9 million in 2020. But its EBITDAE (earnings before interest, tax, depreciation, amortisation and exceptional items) fell from £9.391 million in year ended July 31, 2020 to £2.249 million in the 18 month period ended January 31, 2022.

The accounts also reveal the company made a loss for the financial period of £9.2 million, compared to a profit of £6.8 million in 2020.

Graham said the change in ownership will not affect the day to day running of the business, nor will it deliver any changes in personnel.

“We will be continuing business as usual. Alcentra shares our ambitions for organic growth, and we look forward to working together,” he added.

Lifetime Training’s accounts explain that an “agreement” was entered into to restructure, which means its group parent company – MTH Midco 2 Limited – and its subsidiaries are “to be acquired by a new parent entity, a UK registered company jointly owned by certain lenders who currently provide debt financing to the group”.

Alongside the change in ownership, a new financing package is to be put in place that includes the “extension of the maturity of the existing loan facilities to 31 July 2027 and the provision of an additional working capital facility”.

In addition, the “relevant lenders have confirmed that they will support the Company to meet its financial obligations as they become due for at least the next 12 months from the date of approval of these financial statements”.

The ESFA was approached for comment.

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One comment

  1. Phil Hatton

    One thing that this shows is that the largest providers, whether ITPs or colleges, need very strong expert governance and regular robust data sets to be scrutenised quarterly for both quality of training and performance [learners recruited, targets for completion and progress against them]. The ESFA need to be recruiting staff who can monitor what is going on and not doing everything from a desk.