‘Shocked’ staff sent packing as huge apprenticeship training provider goes bust


One of the largest apprenticeship providers in England has called in the administrators after the Skills Funding Agency terminated their contract, FE Week has learned.

First4Skills, which holds an annual £15m apprenticeship allocation and is 60 percent owned by City of Liverpool College, this afternoon told around 200 ‘shocked’ staff to pack their belongings and leave.

It is understood as many as 6,500 apprentices will be affected, typically in the retail sector, some with the 14 subcontractors that share £4.7m in contracts.

Matthew Kopanski, an employee in the administration team at First4Skills, described  how “we were emailed today, and a minute later called into an office with the director and the administrator and told we have no job, no notice period and no redundancy pay from the company.

“It’s a massive shock and I’m disappointed with what has happened. I have rent to pay and holidays booked, as well as other day to day expenses.”

One First4Skills manager took to LinkedIn to say “this has been an absolute shock to all concerned. So many talented staff members, not to mention the learners, will be affected by this decision.”

Another this evening said: “I am utterly gutted! I have given First4Skills my all for over 10 years, working with some amazing people. I wish all of my colleagues to come out of this stronger than ever.”

It is believed that First4Skills were inspected by Ofsted in early February and in a few weeks their published report will confirm a grade four, which as a private training provider would typically lead to a funding contract termination.

When asked whether the Skills Funding Agency were aware of the situation, a DfE spokesperson said: “We have exercised our right to terminate First4Skills Limited’s contract.

“We are working to ensure learners’ programmes are not disrupted and that where required alternative training provision is identified and transfer arrangements made.

“We will work with employers through the National Apprenticeship Service to ensure they are fully involved in the transfer process.”

The First4Skills website has been taken down and this afternoon the phone went unanswered.

The majority owner of First4Skills, City of Liverpool College, has itself had “severe financial problems” requiring millions in bailouts according to the government..

In a scathing letter from the Skills Minister in October, the college was informed it was to be placed into “Administered College status with immediate effect.”

The letter said that despite the college spending money on lawyers to challenge the FE Commissioner process the “government has provided £2 million of Exceptional Financial Support to the college as a result of its failures of financial management this year”.

The Minister went on to say “the Commissioner’s initial assessment in April indicated that the existing leadership had failed to exercise adequate financial oversight, and the recent, incomplete stocktake also found that the board had not properly managed senior post holders or held them to account.

Financial mismanagement is not simply a matter of hitting annual budgets, but of proper financial planning which enables the college to invest in outcomes and quality.”

As a result of the ‘administered status’ the college is “required to consult the Skills Funding Agency about any fundamental changes affecting its operations or finances.”

At the time of publication City of Liverpool College had not been approached for comment.

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  1. Mandie willis

    It is always a terrible shame when something like this happens, especially off the back of an Ofsted inspection! I really empathise with the staff that have lost their jobs

  2. Chris

    Yet another provider going to the wall. Financial difficulties and a grade 4 ofsed being sited.
    The landscape of FE is certainly changing and I have been surprised by the number of providers who are either buryingtheir head in the sand and hoping the levy and new standards will go away. Or literally doing nothing.
    Learners and Assessors are yet again the people that suffer when these all too frequent events happen.

  3. Reader

    What will happen in this situation post levy when employers have contracts with providers? Will the government continue to let independent training providers go to the wall while still bailing out failing FE colleges? Or will we start to see bigger closures and staff redundancies when employers hold the power and stop paying providers regardless of their OFSTED grade but for other customer service and quality concerns?

    • Graham

      I think the situation is more complicated. Post May 2017 all providers must be approved on RoATP and in the process they all become subject to OfSTED either directly or indirectly as part of a supply chain. Employers can only purchase from approved providers (ITPs, employer providers in their own right or colleges) – those who have not been graded as inadequate. Of course employers will still purchase commercial provision but it won’t help them spend their Levy payments.

      I’m also wondering whether some providers will still be able to operate as efficiently as they currently do. The requirement for 20% off-the-job training post May will hit some providers (and employers) hard in terms of increased costs. And we all have to sign up to contracts to confirm the 20% is being adhered to.

      The closure of First4Skills is an awful blow to the sector. Terrible for employees and devastating for learners and also for the subcontractors involved – some of whom had very large comnracts.

  4. Interested Party

    Interesting that employer satisfaction results from the inspection show high levels at 96% for recommending to other employers and 90%+ for all others. So First4Skills is delivering what employers want but not what Ofsted want – wonder how that will play out once the levy starts.

  5. Confused and bewildered

    There seems to be a lot of upheaval in the training sector at the moment.
    I was directly effected by the closure of First4Skills and right now I am questioning the effectiveness of Ofsted as none of the inspectors who came out to us had any background in work based learning, therefore would be unable to give a fair reliable judgement on what we do.

    An acquaintance of mine is a head in a primary school, during their Ofsted, none of the inspectors were from a primary background, and they called for a halt in the inspection until someone with the required experience was part of the inspection team – Should training providers not be met with the same consideration?
    We are duty bound to provide consistent levels of service across all regions when in a national company, supported through standardisation, how is this same standardisation met within Ofsted when the disparity of inspectors experience is so great?