Government dependent on 'inadequate' education provider, finds audit report

Commons select committee says it is 'disgraceful' that education department continues to spend money on Learndirect Ltd, despite its 'declining performance'

Ofsted earlier this year described the education provider’s performance as ‘inadequate’ (iStock)

The Government has become dependent on an education provider that has been rated inadequate, an audit report warns.

The Public Accounts Committee (PAC) said it was “disgraceful” that the Department of Education should be continuing to spend millions of pounds of taxpayers’ money on Learndirect Ltd despite its “declining performance”.

A National Audit Office (NAO) investigation published on Thursday looked into the circumstances surrounding the monitoring, inspection and funding of the nation’s biggest further education provider. It found that Learndirect Ltd received £121m from all of its central government contracts last year.

This is despite the fact that the company, which engages with around 75,000 learners annually, has been rated “inadequate” by Ofsted.

The NAO also raised concerns that Ofsted failed to act in a timely manner when the company was first flagged as a risk in Spring 2015, after the Education and Skills Funding Agency (ESFA) downgraded its financial health rating from “satisfactory” to “inadequate”.

When the Ofsted inspection did take place in March 2017, the watchdog identified poor management of subcontractors’ performance, weak oversight of learners’ progress and insufficient focus on apprenticeship training.

In most cases where Ofsted rates a commercial training provider’s overall effectiveness as inadequate, the ESFA withdraws funding within three months.

But the ESFA decided that funding Learndirect Ltd for the 2017-18 academic year was in the best interests of learners and the other public services that the company delivers.

Meg Hillier MP, chair of the PAC, said the Government had “backed itself into a corner” by letting itself become dependent on Learndirect Ltd.

“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.

“I am concerned that it took Ofsted so long to investigate. It knew Learndirect was a risk from as early as Spring 2015, but the inspection took two years to arrive.”

A Department for Education spokesperson 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.

“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.”