The UK’s strict redundancy laws may have been breached when one of the largest apprenticeship providers in England unexpectedly called in the administrators last week, according to a major union.

First4Skills, which received £15 million every year to run apprenticeships, told around 200 ‘shocked’ staff on Friday, March 3 that it was closing down.

Now Unison has come forward to say that the company might have acted unlawfully by hiding the degree of problems it was experiencing from its staff.

“The closure of First4Skills will cause uncertainty for staff and apprentices as jobs are lost and learners are moved to new training providers,” said Jon Richards, the union’s head of education.

“It’s now clear there will be redundancies. Unison believes redundancy laws may have been breached because the company failed to share the extent of the company’s woes with the workforce.”

First4Skills specialised in retail apprenticeships and operated from offices in Liverpool, Birmingham and Kilmarnock. It employed around 200 staff and supported approximately 4,500 apprentices around the UK. Discussions broke out on social networking site LinkedIn after its collapse, as other employers offered opportunities to former First4Skills staff, and sector members gave their condolences.

Judith Jackson, who was a strategic account manager at First4Skills, mentioned how little staff knew about the provider’s struggles before it was forced to call in the administrators.

She wrote: “It’s really shocking when staff and clients learn more via LinkedIn than from the [senior leadership team]. Amazing staff in parts, and fantastic clients with levy plans hopefully all which can still be fulfilled.”

The firm’s apprenticeships and skills senior leader Phil Hedley also posted a message, saying: “First4Skills (the largest retail apprenticeship provider) went into administration today after many years in the WBL sector.

“I am very touched by the reaction I’ve received, and it reinforces my belief that work-based learning is such a different environment to the other operators in FE, and this surely should be recognised by the governing bodies.”

First4Skills was rated ‘requires improvement’ by Ofsted in May 2015, and FE Week understands that the provider was inspected again in early February, this time receiving the worst possible ‘inadequate’ grade.

According to the latest Ofsted report, First4Skills was acquired by City of Liverpool College and a private training provider called 3AAA in September 2012, but became wholly owned by City of Liverpool from November 2014.

In City of Liverpool’s financial statements for 2015/16, First4Skills is described as a 60-per-cent-owned subsidiary of the college, after a 40 per cent interest was sold to an external training provider for £500,000 in July 2016.

FE Week understands that this external provider is Sysco Business Skills Academy Limited, where Ian Smith, a director of First4Skills, has held another a directorship since 2006.

We asked Mr Smith to comment on the situation, and to explain what would happen now to learners and staff.

However, he said: “Sysco will not be making any comment at this time.”

We also asked City of Liverpool College for a comment but were twice directed to the administrators, RSM UK.

A spokesperson for RSM UK gave us the following statement: “Lindsey Cooper and Chris Ratten of RSM Restructuring Advisory LLP were appointed Joint Administrators of First4Skills Limited on March 3, 2017.

“The decision to appoint administrators was made by the directors of First4Skills Limited due to the withdrawal of its key contract with the SFA.

“The move impacted the financial stability of the business, which called into question the company’s ability to continue to trade.”

Ms Cooper said: “We are working with the SFA and Skills Development Scotland and our professional advisors to assist in the process of transferring the learners to new training providers, whilst maximising the returns to creditors.”

Main image:  First4Skills head office at Princes Dock, Liverpool Waters

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  1. I am shocked that staff are saying they knew nothing of the problems. Surely as an inadequate provider they will have been fully aware that they were not meeting the apprentices needs adequately, they were not achieving, progressing, or learning!
    Even if the grade 4 report had not yet been published and the SMT had decided not to disclose the fact they had been graded as inadequate to staff, professionals will have known that they were not doing enough.

    • Elena Chapman

      I guess this may be a case of SAR not being realistic, if the staff claim not to know about the problems.
      However, from putting company into administration viewpoint, the company is closing down not due to financial problems, so I am not quite sure whether the Union has a point.
      I do feel for the staff and the company.

      We had an inspection ending on February 13, 2015. We have received a grade 4 on a technical point. We did not give up and wind the company down though. We fought it, got re-inspected within 6 months and the company has survived.
      My husband and I had to fund the operation from personal funds to survive the period of time in between inspections. It was a gamble that paid off.

    • Anyone who works in the training industry knows that if you receive a Grade 4 from ofsted that your days are numbered, as your contracts will be pulled, no contracts = no money!

      I find it hard to believe that people at the business were shocked, heads in the sand i think or perhaps they thought everything will be alright because they are so big with so many learners!