Learndirect Apprenticeships Ltd, a separate entity created in September 2016, has won contracts to train about 3,000 people

This article is more than 3 years old

This article is more than 3 years old

The owners of Learndirect are continuing to win government-approved apprenticeship contracts despite their original company failing to meet the government’s minimum standards.

The private equity owners of Learndirect Limited, which is expected to be given the lowest possible grade by the education watchdog Ofsted and to lose all its Department for Education contracts, created Learndirect Apprenticeships Limited, which has gone on to win contracts to train about 3,000 people.

Learndirect Apprenticeships Ltd was created in September 2016, and its training is funded by a levy on companies rather than directly by the government.

Department for Education pulls all Learndirect contracts and funding Read more

Ofsted is expected to accuse Learndirect Limited on Thursday of allowing standards to slide to a “very low” level and say its management of apprenticeships is ineffective. The report, which Learndirect asked a high court judge to suppress, is understood to give the company a grade four rating, the lowest possible, for its overall effectiveness, apprenticeships and outcome for learners.

Learndirect, which was privatised by David Cameron’s coalition government in 2011 and is majority-owned by the private equity arm of Lloyds Bank, told the court that if it was given a grade four it could lead to the “catastrophic” withdrawal of funding and it may be forced to call in the administrators. Providers given a grade four rating are prevented from being listed on the Education and Skills Funding Agency (EFSA) register of apprenticeship training providers.

The DfE said Learndirect has not been granted new contracts since May, but Learndirect Apprenticeships has contracts to train about 3,000 people. Learndirect Apprenticeships applied to the EFSA register independently of Learndirect Ltd so it is not affected by the grade four rating.

Learndirect branded inadequate in Ofsted report it tried to suppress Read more

The DfE, Ofsted and Learndirect pointed out that the damning Ofsted report did not relate to Learndirect Apprenticeships and said the two companies were completely separate entities.

An Ofsted spokesman said: “Ofsted inspected Learndirect Ltd under the common inspection framework 2015. All apprenticeship provision offered by Learndirect Ltd was inspected, graded and reported under apprenticeship provision type in the inspection report, which will be published tomorrow.

“Learndirect Apprenticeship Ltd was a separate company with no funding or apprentices at the time of the inspection so was not relevant to the inspection.”

A DfE spokesperson said: “Learndirect Apprenticeships ltd is a separate legal entity on the register of apprenticeship training providers. Only those providers who meet our rigorous quality assurance make it on to the register to deliver quality apprenticeships.”

Learndirect said: “Levy apprenticeships [employer-owned apprenticeships] are delivered by Learndirect Apprenticeships Limited, an independent business. This part of the business is supporting 60% of the 5,000 apprenticeships enrolled to date as part of the government’s apprenticeship levy. The Ofsted report does not relate to any of this provision.”

According to the ESFA’s register Learndirect Limited said it had subcontracted £83,000 worth of work to Learndirect Apprenticeships Limited.



The DfE said on Tuesday that it would withdraw all funding from Learndirect, which is responsible for almost 73,000 trainees, by July 2018.



After the DfE announcement Learndirect said: “The [Education and Skills Funding Agency] issues 12-month adult education budget contracts to the sector, with the current round scheduled to end in July 2018. This is just one source of funding into Learndirect.”

An FT/FE Week investigation this week found that in the four years since privatisation, Learndirect’s parent firm had spent 84% of its mostly taxpayer-provided cash generated by the operating business on payments to managers and financiers.

• This article was amended on 17 August 2017. An earlier version referred to Learndirect’s parent firm’s income, when cash generated by the operating business was meant.

