Privatisation 'fiasco' threatens skill centres
Sunday 01 August 1993
Astra, formerly the Department of Employment's Skills Training Agency, was given to ex- civil servants in 1990. The department handed over pounds 11m - to cover initial losses - and 45 skill centres, complete with equipment, valued at pounds 63m.
On 22 July the company, which trained 60,000 people in the last financial year, went into receivership. The receivers, Arthur Andersen, and the employment department both maintained publicly last week that most of the 35 skills centres which the company still owned - 10 have been closed to save money - were likely to be bought by other firms, leaving undamaged Britain's ability to produce a skilled workforce.
In private, officials from the National Union of Civil and Public Servants, which represents staff, were told by Arthur Andersen on Friday that the biggest vocational training company in the country was likely to be destroyed.
The receivers expected between a third and a half of the remaining training centres to close, according to the union's spokesman, Ian Taylor. The Deptford centre closed last week and tools were auctioned at Milton Keynes. Trainers at Enfield, Crawley, and Nottingham expected to hear this week that their centres would also be going.
Frank Dobson, Labour's employment spokesmen, said: 'My information is that only 10 of the 35 centres will survive. This was once an organisation that provided desperately needed, high-quality training and should have been kept as a public service. For ministers to stand back and watch now when we need skilled workers to get us out of recession is scandalous.'
Astra was given to Stuart Bishell, Trevor Kent and Philip Wills, who had managed the centres as civil servants. Company House records show that a string of subsidiaries was set up. They also reveal that the directors' earnings rose rapidly from the salaries of about pounds 35,000 they received in the public sector. In 1991, the last year for which returns have been filed, the highest- paid director had a salary of between pounds 55,000 and pounds 60,000 and the other two pounds 50,000 to pounds 55,000.
The company ran into trouble almost as soon as it was privatised. Firms reduced training as the recession bit and what Astra called 'short-term' government policy undermined profitability. Astra told the Commons Employment Committee in February 1992 that state funding for training had been cut.
Meanwhile, the Department of Employment's 102 Training and Enterprise Councils - the quangos staffed by business people which control pounds 2bn of public money to provide training - were giving Astra wildly varying contracts, which made co-ordination impossible.
John O'Brien, 35, taught hundreds of young men carpentry in Astra skills centres for seven years. 'When we were in the public sector we were really proud of our achievement,' he said. 'After privatisation that all changed. First we didn't have a stick of wood to work and had to rummage around in bins for scraps. Then we were told we should not train people too well or they would not come back for more.'
Mr O'Brien was sacked earlier this month. 'I've had a bellyful,' he said. 'A service which the country needs was just pissed around from pillar to post.'
Mr Dobson has called for a public inquiry into the financial structure of the firm. He alleged last week that the property side of the company was 'milking' the trainers. In one case 'rent of pounds 75,000 is paid to the freeholder (of a skills centre) while rent of pounds 150,000 is charged to the trainers (in the same centre)'.
But a spokesman for Arthur Andersen said it had found nothing wrong with this practice. The receivers had a duty to report any financial movements which could be criminal and 'had made no such report'.
Documents released by Labour last week, however, have provoked a Department of Employment inquiry. Astra was taking advantage of Government bounty payments to skill centres of pounds 600 to pounds 1,000 for every ex- trainee who found work within three months, Labour said. It alleged the company claimed the money even for trainees in temporary jobs.
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