Learndirect’s multimillion-pound contract to deliver the Home Office’s Life in the UK test is to be put out to tender for a “new” provider, FE Week can reveal.

The nation’s biggest FE provider has since November 2014 held the contract to operate the tests, which are a crucial component for obtaining British citizenship, on behalf of the UK Border Agency.

It also had a contract for an older version of the service for an unknown number of years before 2014, and had the agreement extended at least once.

But it appears that the nation’s largest provider, which has endured a chaotic end to 2017, what with its grade four from Ofsted, the subsequent losses of government funding and a National Audit Office investigation – the outcome of which is due tomorrow, will not continue with the tests when its current Home Office contract ends in June next year.

A “prior information notice” was released by the Home Office on November 30, spelling out the department’s intention to put the £21 million contract out to tender and recruit a new provider.

“In preparation for the current contract coming to an end, it is the Home Office’s intention to launch a competition in early 2018, in order to find a new provider or providers to deliver the service throughout the UK,” the document, brought to the attention of FE Week by Tussell, a database of UK government tenders and contracts, said.

Learndirect’s previous contract was extended in 2013, when it issued a press release suggesting it had worked with the Home Office on the service since its launch in 2005.

“We’re very proud of the work we’ve done with the UK Border Agency to deliver Life in the UK tests since they were launched in November 2005,” said Suzana Lopes, its senior vice-president of sales at the time.

The Home Office told FE Week that announcing its intention to tender the test was part of its usual procurement procedures, and confirmed it began working with Learndirect on the “new” Life in the UK Test service on November 1, 2014.

The department would not, however, tell FE Week how many years it had worked with Learndirect on the older version of the service.

Learndirect also declined to comment.

Life in the UK tests are carried out on computers around the UK, with separate arrangements for those carried out abroad.

The Home Office’s tender page says bids for the contract, which will initially run from July 1, 2018 to July 31, 2021, will be “welcomed from single organisations or consortia, although it is the intention that a single contract will be awarded for provision of the service UK-wide.

“Indicative timescales are of competition launch towards the end of January 2018, with a final bid submission date at the end of March 2018 and a service commencement date in July 2018. These dates are indicative only, and may be subject to change.”

There will be a “supplier event” after the launch to “engage with potential bidders and provide further information, and to afford prospective bidders an opportunity to ask questions”.

The public accounts committee has scheduled a hearing to review the Learndirect saga on January 15 in the New Year, FE Week understands.

The meeting will dissect the findings of tomorrow’s National Audit Office report, which was called for by the PAC’s chair, Meg Hillier (pictured above), and looks into the circumstances surrounding the monitoring, inspection and funding of the nation’s biggest FE provider.

It is understood that witnesses to be called to the hearing will include Ofsted chief inspector Amanda Spielman, Learndirect boss Andy Palmer, former ESFA chief Peter Lauener, and the Department for Education’s permanent secretary, Jonathan Slater.

Learndirect was offered special treatment after the government allowed it to retain its contracts for almost a year – much more than the usual three-month termination period – even though the provider was given an ‘inadequate’ rating by Ofsted in a report published in August.

The special treatment afforded to Learndirect after its infamous grade four from Ofsted was actually a ministerial decision, even though the ESFA’s former boss attempted to take “personal responsibility” for it, the National Audit Office has revealed.

The country’s public spending watchdog has this morning published its much-anticipated report into the circumstances surrounding the monitoring, inspection and funding at the nation’s biggest FE provider.

It has for the first time shown that the decision to continue funding Learndirect until July 31 next year was ultimately made by a Department for Education minister, even though Peter Lauener publicly claimed it had been his decision.

The NAO’s report states that between 2015 and August 2017, Ofsted awarded an ‘inadequate’ rating to 26 providers aside from Learndirect. In 23 cases, the ESFA terminated their contracts with a notice period of three months or fewer. The other three cases involved four- or six-month notice periods.

In May this year, around six weeks after Ofsted’s visit to Learndirect, the ESFA concluded that continuing to fund the provider for 2017/18 would “best meet the interests of learners”, allowing the company to wind down and let learners “complete their courses with minimal disruption”.

This was because the agency believed that the provider’s size of made it an “unusual case, to which special considerations should apply”.

The agency however “recognised” that such a decision would “require ministerial review”, which “would not be possible until after the general election”. Accordingly, “ESFA put a formal submission to the minister on July 2017 4”, the report says.

This was the only time ministers have reviewed and approved an ESFA decision to continue funding a provider with a grade four, the NAO found.

The DfE declined to comment directly on which minister took the final decision or when it was made.

During a Public Accounts Committee meeting in October, Mr Lauener said it had been his decision to continue funding Learndirect until next July, after Meg Hillier, the committee’s chair, asked him if the provider “was too big to fail”.

ESFA believed that the size of Learndirect Ltd made it an unusual case, to which special considerations should apply

At the same meeting, Jonathan Slater, the DfE’s permanent secretary, denied that the Learndirect had been given special treatment.

But as the NAO has today confirmed, no other ‘inadequate’ training provider has ever been given a full year to run down its contracts.

After reading the report, Ms Hillier said the government had “backed itself into a corner by letting itself become dependent on Learndirect”.

“At a time when many further education providers are struggling with funding restraint, it is disgraceful that the department should be continuing to spend millions of pounds of taxpayers’ money on an inadequate provider,” she said.

“Our priority throughout has been the protection of learners and ensuring that they do not lose out – a point that has been acknowledged by the NAO,” said a DfE spokesperson.

“We set the contract wind-down period to July 2018, which will give learners the opportunity to complete their courses, and will continue to monitor performance on a monthly basis to ensure learners and other service users are not affected.

“This process has demonstrated that where providers do not meet the standards we expect, we will not hesitate to take action.”

FE Week has pulled out the other main findings of the NAO’s report, which you can read here, along with a statement from Learndirect.

FE and skills will have a major role to play in a new social mobility action plan being launched by the education secretary this morning.

The plan, which will be unveiled by Justine Greening at the Reform social mobility conference in London today, outlines four social mobility “ambitions” – two of which focus on post-16 education and training.

It promises to offer “real choice at post-16” and “rewarding careers for all” as part of its overarching aim to focus on the areas of the country that have been left behind.

“Today I’m launching a plan which puts improving social mobility at the heart of all our education policy,” Ms Greening is expected to say.

“The reality is that in modern Britain, where you start too often decides where you finish.

“This is a defining challenge for us as a nation. We have talent spread evenly across this great country – the problem is that opportunity is not.

“And for some people it’s a whole lifespan of missed opportunities.”

The new plan, she is expected to say, will “provide a structure and an architecture to enable us to work in a more coordinated way” to tackle the social mobility challenge.

Her four ambitions will encompass important stages in people’s education.

The first two, “closing the word gap” and “closing the attainment gap”, will focus on early years and schools.

“Real choice at post-16”, the third, will involve “creating world-class technical education, backed by half a billion pounds in investment, and increasing the options for all young people regardless of their background”.

The fourth, “rewarding careers for all”, promises to boost “skills and confidence to make the leap from education to work” and raise “career aspirations”.

Ms Greening will say she wants to build a “new type of partnership with businesses to improve advice, information and experiences for young people”.

The Social Mobility Commission’s annual state of the nation report, published last month, raised concerns that the apprenticeship levy would adversely affect social mobility.

It warned that the levy could “lead to disproportionate levels of apprenticeship spend in cities, where many big businesses are located” which may “widen the disparity in available opportunities between urban and rural areas”.

It recommended the government target “any unused apprenticeship levy funds at regions with fewer high-level apprenticeships”.

The Skills Commission, an influential group of MPs and education and business leaders, launched a major inquiry in August into the impact of the government’s apprenticeship reforms on disadvantaged young people.

Update at 9.30am: 

The action plan has now been published, including the following announcements that will be of interest to the sector:

• Employers to take part in regional skills advisory panels, which will help ensure that the local provision of skills, and the delivery of skills policy in local areas, responds to local employer needs
• Introduction of an entitlement to full funding for basic digital courses. The government has said it will do this several times before, so we have asked the DfE if it can now confirm when this will be introduced from
• Employers to be incentivised to “provide quality apprenticeships through the apprenticeship levy” – though its not clear how this would be done, for example by raising the levy or lowering the £3m threshold. FE Week is enquiring about this
• T-level transition year to be piloted to “test different offers to make sure we are providing the best possible options to all young people” – but no details yet. FE Week has requested further information

The report made the following admission about long-term under-investment in FE:

“Historically we have not done enough to invest in FE, which is the sector responsible for delivering training from basic skills to postgraduate degrees, including the bulk of technical education.

“The hard work and dedication of teachers and college leaders has not been matched by successive governments who have overlooked further education.

“This is a major problem given that the sector disproportionately serves students from disadvantaged backgrounds and challenging areas.”

The AELP wants the education secretary to review the “controversial” outcome of the non-levy tender before ‘good’ and ‘outstanding’ providers are “wiped out”.

Results of this much-delayed procurement were released last week, and many Ofsted grade one and two providers were denied an ESFA contract to continue delivering apprenticeships for smaller employers until April 2019.

As a result, many of them could now go into administration or be forced to cut experienced staff, the AELP wrote in a letter to Justine Greening.

Today’s Ofsted annual report found that four out of five independent training providers are currently rated ‘good’ or ‘outstanding’, a feat which AELP believes is a “significant achievement” given the weight of reform that has affected delivery over the past 12 months.

“Today we should be celebrating the chief inspector’s confirmation that so many training providers and colleges are delivering high-quality learning to employers and individuals,” said AELP’s boss Mark Dawe.

She needs to act fast before lasting damage is done

“Instead we are angry that a significant proportion of them may not be trading in a few months’ time because of an arbitrary decision to cull the market when employers will soon have the opportunity to decide for themselves which providers should benefit from the apprenticeship reforms.

“Justine Greening’s own social mobility agenda will be seriously undermined if she disregards the Ofsted ratings in favour of the ESFA’s procurement decisions, leaving parts of the country without specialist apprenticeship provision in key sectors. She needs to act fast before lasting damage is done and the government’s three-million apprenticeships target becomes an embarrassment.”

One ‘good’ provider that has been training learners for over 33 years has threatened the ESFA with legal action after it was declined a non-levy contract.

Yorkshire College of Beauty, which claims it is the country’s largest beauty therapy apprenticeship provider, failed in its request for a £1.1 million allocation because it achieved 1,225 marks in the ESFA’s scoring criteria instead of the 1,275 minimum.

The provider hit out at the government’s “shambolic” procurement process which it says is a “paper-based exercise” with “no consideration” to the standard of training, Ofsted grades, awarding body reports or achievement rates.

My whole team have found the whole process to be shambolic and unfair

“I am challenging the marking and have instructed lawyers,” said Christine Tilley, the college’s owner.

Ms Tilley said she has the “support of local councillors and businesses” and has already written to her local MP, Stuart Andrew, to fight her battle in Parliament.

“We have approximately 150 apprentices on contract to train in what is a specialist area being the beauty therapy sector,” she said.

“It takes a certain kind of learner to be able to be placed in a levy-based business and this makes up less than five per cent of the learners we historically recruit.”

Ms Tilley added that because the college didn’t win a non-levy contract, she has 75 apprentices currently undertaking a level two qualification who are being prevented from progressing onto level three and continuing their training.

“My whole team have found the whole process to be shambolic and also unfair,” she protested.

Ofsted’s deputy director for further education and skills spoke to FE Week after its annual report was unveiled this morning. Paul Joyce reflected at length on the unease at the way funding cuts are narrowing the learning experience of sixth-form learners, and even backed campaigners asking the government to invest more.

The Support Our Sixth-Formers campaign, backed by among others the Association of Colleges, Sixth-Form Colleges Association and FE Week, wants the 16-to-18 per-pupil funding rate to increase by at least £200.

Asked if he supports the campaign, Mr Joyce diplomatically explained that his boss, chief inspector Amanda Spielman, “has said she believes until 16-to-18 funding rates are increased, the sector will continue to face significant challenges, and I certainly support that view and share that opinion”.

She explicitly warned in her speech that the sector will struggle unless it is given more funding.

“We’ve become aware through inspection of a number of sixth-form colleges, for example, that no longer offer four A-levels in the first year, and then drop into three,” Mr Joyce said.

“Also, we’ve seen where enrichment activities have been reduced because of the constraints to funding or staffing that institutions experience.

“Historically, where learners would get additional care, support and guidance, we have seen those activities, tutorials, preparation for work, for interviews, debating societies, that kind of thing, reduce gradually over time.”

He stressed that to run quality provision, “there has got to be some sort of link between funding and the provision that’s on offer”. Such considerations will increasingly be taken into account by inspectors.

“We already report about the curriculum. What you can expect to see in the reports is a little more focus on the curriculum, about what’s changed, and we will start to look at the reasons for some of that change,” he said.

“This is around funding for 16-to-19 provision generally. We will report on the curriculum in the round, but the issue of core funding-rates for that age group certainly will be an area of exploration.”

The annual report also declared that the “case of Learndirect case has shown that no provider is too big to fail”, after it was given a grade four in August. It has still arguably received special treatment from the Department for Education that has so far allowed it to retain its skills contracts much longer than is usual for ‘inadequate’ providers.

It begs the question, do does he think Learndirect should have been allowed to fail?

“From our perspective, if we inspect a provider, regardless of its size, if it’s ‘inadequate’ we will say so,” he said. “What others do with that, that’s entirely up to them. It does raise the question of when markets grow, whether there is enough scrutiny and consideration.

“Growth needs managing carefully, quality needs to be a key consideration, and big is not always better.

“This, at the end of the day, is taxpayers’ money we are dealing with, and levy money. We need to make sure that is used appropriately to provide quality training.”

He also reflected on questions in the report on where money generated from the apprenticeship levy is being directed, and connected changes to the wider apprenticeship system.

“We have some concerns about how these apprenticeship reforms are playing out. It is early days but we are worried that the majority of new standards that have been approved are at higher levels,” he admitted.

“That clearly means that older apprentices are likely to start those programmes. We have seen a reduction in the number of apprenticeship starts, a reduction in the number of 16- to 18-year-old starts, and clearly we would want to see some level two and three standards approved, and for those numbers at level two and three and for 16-to-18s grow.

“That’s what we mean about the use of money.”

An independent training provider that has slumped two grades to ‘inadequate’ is trying to get taken over.

Chesterfield-based NLT Training received the lowest possible grade across the board from Ofsted – down from ‘good’– in a report published today.

Sarah Temperton, its chief executive, wants to be taken over by WEBS Training Ltd, a Nottingham-based furniture training provider rated ‘good’ in April this year.

She hopes that the takeover, which she said is agreed between the companies but is still subject to Education and Skills Funding Agency approval, will help to secure continued apprenticeship training at NLT’s Chesterfield and Scunthorpe centres.

Providers that receive a grade four usually have their funding cancelled by the ESFA, which can force them to close.

“If the takeover does not gain approval, there is a real risk that valuable bridge between education and employment may now be taken away from a number of disadvantaged young people across Scunthorpe and Chesterfield,” she said.

Ms Temperton said she was “extremely disappointed” at the verdict, and that she would be “challenging them at a number of levels”.

Samantha Jones, the managing director of WEBS, said the two providers had already “worked together for a number of years and combining forces provides many opportunities”.

Declining achievement rates at NLT, which specialises in engineering and manufacturing apprenticeships and study programmes, were among the issues dragging it down in the report published this morning.

“A large proportion of apprentices have not completed their apprenticeship by the planned end dates, many of which were unrealistic,” it said.

Achievement rates among study programme learners were deemed to be “very low”, as was the rate at which these learners “successfully progress to further education, training or employment”.

“A significant number of learners leave or are dismissed from the programme without achieving all their learning goals,” it said.

NLT Training had 252 learners and apprentices at the time of inspection, as well as a 2017/18 ESFA allocation of £600,979 for apprenticeships and £333,924 for study programmes. It is on the register of apprenticeship training providers.

The standard of apprentices’ off-the-job training was criticised in the report for failing to “focus sufficiently on developing their understanding of engineering principles”.

Inspectors found that apprentices’ on- and off-the-job training wasn’t well-coordinated, and that “training officers fail to exploit workplace activities fully so that apprentices can practise and apply learning they have developed at the training centre”.

“Not all training officers have sufficiently high aspirations for apprentices and learners.”

Leadership was heavily criticised in the report, with strategic and operational management deemed “inadequate”.

“Decision-making is uncoordinated. Senior leaders, managers and directors are not taking sufficient action to ensure that learners on the study programmes and apprentices receive high-quality training,” it said.

Directors had received inaccurate information in 2015/16 which meant they were “unaware” of the decline in performance and were “insufficiently active in identifying and challenging weak performance and actions that could lead to reputational damage”.

But it noted that “the reports that directors now receive are appropriate to inform effective scrutiny”.

And it said that Ms Temperton, who was appointed in late 2017, was “ambitious for the company” and “under her guidance, directors and senior managers have started to identify key actions to improve standards”.

While safeguarding at the provider was “effective”, the report found that “apprentices’ and learners’ understanding of fundamental British values is often underdeveloped”.

NLT Training is the third independent training provider to receive the lowest possible grade from Ofsted since September, after Activ8 Learning and First City Training both received a grade four in reports published in October.

A Department for Education spokesperson said: “We are aware that Ofsted has published its inspection report on NLT Training. We will take swift action to work with NLT Training to ensure that impact on learners and employers is minimised.”

The first annual Ofsted report delivered by Amanda Spielman has warned that the ignominious fall of Learndirect shows that “no provider is too big to fail”.

The chief inspector unveiled her report for 2016/17 this morning, confirming FE Week’s predictions that it would warn of declining performance for both general FE and sixth-form colleges.

It drew attention back to Learndirect, which was rated ‘inadequate’ over the summer.

“This year, the case of Learndirect has shown that no provider is too big to fail. That raises questions for us and for government about failure in market regulation and whether incentives drive the right behaviour,” the report said.

This reflects comments made during an exclusive interview with the chief inspector in the wake of the scandal.

The report appeared in August, in the wake of a failed legal attempt to quash it, and a gagging order which FE Week successfully overturned.

The report has also commented on the apprenticeship levy, which was introduced for large employers by the government in April.

“The apprenticeship levy is raising a very substantial amount of money to fund training,” it said. “This carries the risk of attracting operators that are not committed to high-quality learning.”

Since the levy launched, there have been fears that it is driving a massive rise in higher or degree-level apprenticeships at the expense of lower levels, as employers are keen to upskill existing staff.

“Most apprenticeships delivered in 2016/17 were at levels two and three, yet over a third of the standards ready for delivery were at level four and above,” Ms Spielman wrote.

“If this trend continues, there will not be enough approved standards at levels two and three. This could have a detrimental impact on the recruitment of 16- to 18-year-olds into apprenticeships.”

The report added that Ofsted will over the coming year review how it inspects apprenticeships “in the context of the new apprenticeship levy, including how we inspect sub-contractors”. This will come as a relief to many in the sector who are frustrated that Ofsted has still not started directly inspecting subcontractors, despite an apparent change in the rules last September to allow for this. 

It also confirmed FE Week’s analysis from last month, which showed an eight-point fall compared with the previous year in sixth-form colleges with a grade one or two in 2017.

Until 2017, the proportion of SFCs receiving the top two grades had climbed every year since 2012. It rose from 72 per cent five years ago to an impressive 89 per cent in 2016.

But figures to September this year show that the proportion rated ‘good’ or ‘outstanding’ had dropped to 81 per cent.

Our analysis also found that 69 per cent of general FE colleges were rated ‘good’ or ‘outstanding’ by August 31, amounting to an overall decline for the third year running.

Seven general FE colleges subsequently managed to dig themselves out of failing grades in the early part 2017/18, but this success is not expected to be recognised in the report, which will only look at inspections published in 2016/17.

The findings backed up Ms Spielman’s recent comments to the education select committee, when she admitted that colleges “have the biggest funding challenge” and said Ofsted had seen “disappointing outcomes” in FE.

Meanwhile, 80 per cent of independent training providers received the top two grades.

This year’s annual Ofsted report recognised the “important role” that ITPs play in FE.

Former chief inspector Sir Michael Wilshaw delivered his fifth and final annual report last December, when he warned that the government’s maths and English compulsory GCSE resits policy, which has placed huge added pressure on colleges having to lay on extra classes and delivered poor results, was not working out.

Spielman accepted this time that “this has not changed”.

“In seven out of 10 colleges that improved to ‘good’ this year, English and maths were still weak,” she wrote.

“While the policy’s intention to improve literacy and numeracy levels is well intentioned, the implementation of the policy is not having the desired impact in practice.”