An apprenticeship provider created by the owners of Learndirect last year could be kicked off the purchasing system used by London hospitals, after a joint investigation by FE Week and The Financial Times found multiple irregularities in a tender application.

In one recent bid to deliver apprenticeships at a London hospital, Learndirect Apprenticeships (LDA), a company owned and operated by the owners of Learndirect Ltd, takes credit for activities that happened several years before it was even set up, which are understood to have been undertaken by Learndirect Ltd.

LDA’s response to a tender in August, seen by FE Week, appears to contain at least six potentially misleading claims.

Despite this, the London Procurement Partnership (LPP), which the NHS uses to manage the capital’s dynamic purchasing system (DPS), said it was happy for individual hospitals to verify claims within bids from providers, and insisted it was not concerned that LDA’s bid didn’t mention Learndirect’s recent Ofsted grade four and Serious Notice of Breach, because they had applied to Learndirect Ltd rather than LDA.

The original tender clearly states that applicants “must meet or exceed the national average achievement rate for all the apprenticeship schemes/levels required in order to pass”.

But when FE Week compared various achievement rate and customer satisfaction claims made in LDA’s bid with official, published figures, we found major discrepancies.

Despite being legally separate companies, Learndirect Ltd and LDA share the same spokesperson, who declined to answer questions on the details of the discrepancies in the tender. Instead, they claimed on Wednesday morning that “the board is planning an extensive statement which I would hope to issue in the next 48 hours”.

LDA has been permitted by LPP to take part in “mini-competitions” to deliver levy-funded apprenticeships, which are listed on the capital-wide purchasing system.

Now, however, it appears that LPP is reviewing LDA’s position as a provider.

Presented with our findings, a spokesperson for LPP said the partnership was “now reviewing the original application” and had been “in contact with LDA”. 

“Reviewing a supplier with a view to removing them from a DPS must follow due process under the Pubic Contract Regulations 2015, and in light of these concerns that review is underway,” they said.

LDA was created by two of Learndirect Ltd’s directors in 2016, and like Learndirect, is owned by Lloyds Development Capital.

It was first formed with the intention of selling off Learndirect’s apprenticeships division, but after a potential sale fell through, in what Learndirect described during its failed judicial review against Ofsted as a “management distraction”, LPP decided that the new firm “met the criteria to be listed under the DPS in March 2017”.

“Since the incorporation of LDA in 2016 and its receipt of a place on the register of apprenticeship training providers, we have been transitioning people and assets focused on the delivery of apprenticeships to large employers from Learndirect Ltd to LDA,” Learndirect’s spokesperson told FE Week.

“Large employer clients of LDA were and continue to be aware of the differentiation between the two organisations and were cognisant of this during procurement.

“There has never been any duplicity in this or the other relationships that LDA has with its major clients – and any insinuation of duplicity is both offensive to the large clients and LDA and obviously driven by self-serving interests of those looking to find issues where none exist.”

LDA is correctly described as a ‘new organisation with no financial track record’ on the government’s ‘find apprenticeship training’ website, and has no published achievement rates.

But its listing does claim it has “more than 23,000 apprentices each year so we’ve lots of experience and knowledge” and that it works “with 1,000s of employers in nearly every industry from dental to retail”.

LPP told FE Week that “the mini-competition process is between the buyer and the bidder, and is the point at which any claims by bidders must be verified”.

“With agreement of Health Education England, the LPP DPS mini-competition documentation includes a warning to buyers to be sure that claims being made related to the bidding organisation and no other body.”

FE Week understands that LDA made multiple bids for non-levy contracts with London hospitals in August, but LPP said that “to our knowledge, to date LDA has not been successful in bidding for any work under the DPS”.

 

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The story behind Learndirect Apprenticeships Ltd

The owners of Learndirect Ltd, Lloyds Development Capital, wanted to sell the apprenticeship division last year, so two Learndirect Ltd directors incorporated LDA at Companies House in March 2016.

At its judicial review earlier this year, Learndirect Ltd described in court that the attempted sale, to Global University Systems, was “a management distraction” that ultimately failed in June.

Learndirect Ltd also said it was unsuccessful in persuading the Skills Funding Agency to transfer its apprenticeship funding allocation to LDA.

In November 2016, LDA applied in the first window to join the SFA’s new register of apprenticeship training providers, and were successfully included as one of 48 companies “with no financial track record” when the register was published in March 2017.

LDA had no direct access to public funding until the levy launched in May, but according to the SFA’s register of subcontractors there has been an £83,000 subcontracting arrangement between LDA and Learndirect Ltd since at least January 2017.

Learndirect Ltd’s spokesperson refused to comment on the subcontracting arrangement or explain when LDA first took on apprentices, but did say: “Since the incorporation of LDA in 2016 (and its receipt of a place on the register of apprenticeship training providers) we have been transitioning people and assets (focused on the delivery of apprenticeships to large employers) from Learndirect Limited to LDA”.

FE Week believes that the details of the subcontracting arrangement and exactly when LDA began taking on apprentices are both potentially significant pieces of information, if it is true that people and assets had already been “transitioned” from Learndirect Ltd.

Ofsted claims, based on evidence during its now-infamous inspection of Learndirect in March 2017, that LDA had not yet taken on any apprentices.

“LDA was listed as a subcontractor to Learndirect Ltd, but information available to inspectors confirmed there were no learners allocated to this subcontract at the time of our inspection,” an Ofsted spokesperson told FE Week.

A few days before the inspection, the SFA issued Learndirect Ltd a Notice of Serious Breach as their 2015/16 apprenticeship provision fell below minimum standards. In court, we heard that 70 per cent of the provision was below the achievement rate minimum standard of 62 per cent (a Notice of Serious Breach is issued if just 40 per cent of provision is below standard).

In mid-March, Learndirect Ltd took the call from Ofsted, and requested that their apprenticeships provision be excluded from the inspection. Ofsted rejected this request the following day, and undertook its inspection resulting in a grade four for Learndirect Ltd.

LDA shares a website and directors with Learndirect Ltd, but as a separate company it was unaffected either by the Notice of Serious Breach or the grade four. And the government has not actively stopped Learndirect Ltd from delivering new apprenticeships since May; they were simply not on RoAPT.

LDA is on RoAPT, so it was able to begin delivering new apprenticeships starts for large levied employers, without the hindrance of the notice or the grade four.

However, LDA wanted to use some aspects of its parent firm’s track record in apprenticeship delivery to help promote it to employers. Evidence of this is seen on the government’s ‘Find apprenticeship training’ website, where LDA is correctly described as having ‘no financial track record’ with no published achievement rates, but nevertheless claims to train “more than 23,000 apprentices each year so we’ve lots of experience and knowledge. We work with 1,000s of employers in nearly every industry from dental to retail.”

LDA does not have its own brand and still shares a website with Learndirect Ltd, but FE Week understands a rebrand is planned.

At the end of 2013, Learndirect Apprenticeships appointed an “ambassador”, David Way, a former senior civil servant who ran the National Apprenticeship Service until August 2013, and who continues to act on behalf of Learndirect Ltd.

In recent weeks, the chair of the Public Accounts Committee, Meg Hillier, has called on the National Audit Office to investigate the special treatment given to Learndirect in the wake of its Ofsted report, and the relationship between Learndirect and LDA has been the subject of a public spat between the skills minister Anne Milton and Labour MP Wes Streeting.

As reported by FE Week, Mr Streeting accused the minister of misleading Parliament when she told an education questions session that Learndirect was no longer offering apprenticeships, without adding that they were being offered by LDA.

“In response to my question in education questions, the minister of state made what I believe to be a factually inaccurate, possibly inadvertently misleading statement, when she said that Learndirect would no longer be providing apprenticeships,” said Mr Streeting in a subsequent statement. “The following day, I rather forensically set out that that was not the case. As she is present, perhaps she might take this opportunity to correct the record and give us some reassurance that ministers have an idea about what they are doing.”

Ms Milton did not correct the record, and even though a DfE spokesperson told FE Week that a statement would be made, it had not appeared by the time we went to press.

Mr Streeting told FE Week he would now be applying for a debate in parliament on the Learndirect “debacle”.

A refugee who fled Afghanistan alone at the age of 16 has been crowned ‘outstanding individual learner’ at this year’s Festival of Learning awards.

The Royal Society of Arts in London will be the setting for today’s prestigious awards ceremony at which nine learners, employers and training providers will be singled out for their “inspirational” lifelong-learning stories.

Among them will be Habib Rezaie (pictured above), who arrived in the UK as an unaccompanied asylum-seeker 10 years ago.

He was taken into care by Leicester City Council, and didn’t speak a word of English because he had not attended school in his home country.

Judges pointed out that Mr Rezaie was forced to work long hours to catch up with his peers – but his hard work paid off and he earned a place on Leicester College’s ICT course.

After that, he eventually achieved a 2:1 in his degree in business computing at De Montfort University.

Alongside his studies, Mr Rezaie volunteers at After18, a Leicester charity which supports unaccompanied asylum seeking children and young people.

“Education is the most important thing in my life as it gives me hope for the future and allows me to make a positive contribution to my community,” he said.

The Festival of Learning, led by the Learning and Work Institute with support from the NOCN, is now in its 25th year.

Jonathan Beebee will be presented with this year’s ‘learning for work award’.

He sustained a severe head injury at 19, and was told he would never fully recover. But defying the doctors’ verdict, he pushed on and enrolled into the Lloyds Bank Social Entrepreneurs programme at the School for Social Entrepreneurs in Hampshire.

Twenty years on he runs a social enterprise called PBS4, which supports people with learning disabilities.

Mark Goodwin will meanwhile receive the ‘social impact award’.

Judges claimed his “determination” to include all types of learners in his sports classes led him to establish England’s first mixed-ability rugby team, and inspire many more across the country.

Under the inclusive model, players with learning difficulties and physical disabilities play full-contact rugby alongside their able-bodied peers.

The ‘project award’ goes to Refresh 2 Impress, a bespoke three-day course designed by South Gloucestershire and Stroud College “tailored for learners over 50 years of age”.

More than 300 adults have benefited from the opportunities this learning presents, according to the judges.

Sabeena Shah will pick up this year’s ‘tutor award’.

The judges said that when growing up, Sabeena was “not encouraged to study, let alone think about teaching”, but when she graduated with a law degree in 2011, she decided to teach students facing similar challenges.

Sabeena now manages and teaches the access to law level three qualification at Barking and Dagenham College.

Taylor Bird will be given the ‘young adult learner’ award.

Bullied at school due to learning and physical disabilities, she left with very few GCSEs. But she “flourished” at Walsall College and worked hard to complete entry-level English and maths qualifications as well as level two and three art and design.

She won a place on a photography degree and has now set up her own photography business with plans to expand into her own studio.

Picking up the ‘employer award’ will be James Electrics Contracting, which works closely with local training providers in Devon to offer “high-quality work experience opportunities for learners”.

It offers training to nine apprentices, trainees or work-based learners each year.

Talk English, a project which helps people with poor English skills improve their spoken and written communication and become more involved in the community, will be handed the ‘president’s award’.

And Stephen Bush will be honoured with the ‘patron’s award’ after he took early retirement from a long career in social services to become his mother’s carer.

He is now a “passionate advocate of adult learning, believing it can play an instrumental role in staving off dementia”.

Anne Milton, the skills minister for skills, said it was “such a pleasure to be able to congratulate this year’s Festival of Learning award winners”.

Stephen Evans, the chief executive of the Learning and Work Institute, added: “I congratulate every one of this year’s winners, and indeed everyone who was nominated.”

Level two apprenticeships should be fully funded by the government at every age group, the AELP has said.

This bold but uncosted recommendation is part of a “major” policy submission discussing the way the apprenticeship reforms are “undermining” the prime minister’s social mobility agenda.

If actioned, it would mean the government was paying for around 70 per cent of apprenticeships.

The AELP also wants 16- to 18-year-old apprentices to receive full funding regardless of level.

To offset this cost, the body wants the government to “raise the employer co-investment on a new sliding scale”.

This would start “with 10 per cent at level three, 20 per cent at level four, 30 per cent at level five, 40 per cent at level six and 50 per cent at level seven apprenticeships for apprentices over the age of 19”.

But in an exclusive interview with FE Week, the AELP’s boss Mark Dawe admitted his association had not fully costed the policy.

“We haven’t done a detailed costing because we haven’t got all of the data to hand but we do know that level twos were fully funded in the sense that there was no employer contribution,” he said.

“Now obviously funding rates have changed so it needs to be run through again and I think the whole point of what we’re saying is that at the higher levels there are clear benefits to the employee and the employer and the real focus needs to be on those first steps at level two.”

Pressed on whether the recommendation would undo the government’s attempts to introduce employer contributions, Mr Dawe admitted it would, “but only for level two”, which he admitted made up a “significant” number of all apprenticeships.

It is too early to simply reintroduce full funding for all apprenticeships

It is also meanwhile “up for debate” as to how the full funding would be rationed at level two, for example by going back to an allocations based model.

He confessed he had not consulted with his members on the policy as it was an “early proposition” for debate.

The plan has not been met with great support from the FE sector’s other top association boss.

“The report raises some important issues which are worth following up, but it is too early to simply reintroduce full funding for all small employers and all apprenticeships,” said David Hughes, the chief executive of the Association of Colleges.

“That’s just one of the many changes to the apprenticeship programme in the last year and it is important that the government monitors and discusses the overall impact of those changes,” he said.

Beyond this proposal, AELP’s paper raises 14 other points it believes the government needs to address in its apprenticeships reforms in order to remove the “obstacles” to social mobility.

For instance, the AELP contends that “the rigid implementation” for 20 per cent off-the-job training is “reducing our recruitment of level two apprentices”, and that the training time for maths and English which is required “in addition” places “the heaviest burden on employers”.

Levy-paying employers are meanwhile “prioritising existing employees for apprenticeships instead of recruiting new entrants and giving young people an opportunity, further restricting opportunities for young people”.

“The message came out from Downing Street over the summer that social mobility was still the number one priority for the government after securing a good deal for Brexit,” Mr Dawe writes.

“Education ministers therefore need to get a firm grip on the apprenticeship reforms to stop a potential haemorrhaging of young talent missing out on opportunities that employers were previously willing to offer.”

Read AELP’s full paper here.