Public Accounts Committee

Funding of Learndirect ltd inquiry

Inquiry status: open

The Public Accounts Committee will examine the Funding of Learndirect ltd on Monday 15 January 2018.

Scope of the inquiry

In March 2017 Learndirect Ltd, the UK’s largest commercial further education provider, was rated inadequate by Ofsted. As a result the Education and Skills Funding Agency (ESFA) will cease funding Learndirect in July 2018.

In 2016–17 Learndirect received £121 million from contracts with central government. Much of this came through ESFA. Although Learndirect had previously been rated good by Ofsted and its financial health satisfactory by ESFA’s predecessor organisation, its financial rating was downgraded to inadequate in the autumn of 2015.

On 13 March 2017, after a failed attempt by Learndirect to sell its apprenticeships business, ESFA issued the company with a Notice of Serious Breach, citing falling standards in apprenticeship provision. Ofsted performed a full inspection on 20–23 March 2017 and concluded that the company’s provision was inadequate.

Learndirect attempted to challenge the decision legally, but failed. It will receive no further ESFA funding from July 2018 onwards, but is due to receive £95 million from ESFA during the 2017–18 financial year.

As well as the cost implications, there are concerns about the number of learners affected by inadequate provision and by the possible gap following the removal of funding of Learndirect.

We will ask representatives from the Department for Education, ESFA, Ofsted and Learndirect how provision was allowed to slip, whether the Government could have done more to save money and better monitor their contracts with Learndirect, and what will be done to ensure that the removal of funding from Learndirect does not leave apprentices and others without courses.

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