Is it Wrong to Give Learndirect Special Treatment?

Much has been said about Learndirect’s infamous Grade 4 inspection, and the train of events which led to it. It’s not for me to comment on the inner workings of Learndirect, beyond the obvious recognition that standards have fallen. What has, however, rankled with many is the perception that Learndirect have received “Special Treatment” by the DfE and ESFA. But is it necessarily wrong to treat Learndirect a little differently under the circumstances?

Contractually, the ESFA may terminate if a provider is awarded a Grade 4, giving notice of at least 30 days, with 3 months having become the precedent. The ESFA state that 3-months “allows us to ensure learners are protected through a managed transfer to providers with good quality provision with employer agreement.” It is far from clear, however, that 3-months is sufficiently long enough to achieve this, or if it provides enough incentive for the terminated provider to play ball.

First4Skills went into administration earlier this year, immediately following a Grade 4. They were only given the obligatory three-month notice period, leaving little incentive to delay the inevitable. Immediate staff redundancies were instigated. The extent to which First4Skills estimated 6,500 learners may have been adversely affected by the relative haste of termination may perhaps never be fully known.

A lesson is surely that the length of notice should be proportionate to the number of learners affected, balanced against the imperative of removing learners from poor provision swiftly. I am not suggesting here that Learndirect’s extended notice through to July 2018 is necessarily the correct duration, but I do think it is right that the ESFA have some flexibility, rather than a one size fits all approach. By putting a carrot of extra time and money on the table, the ESFA will be hoping that Learndirect will apply its best endeavours to support an effective transition. Some might call this Special Treatment, others may call it prudent risk management.

The real lessons are less about what happens next, and far more about what should have happened before. Learndirect were a Grade 2 provider when last inspected in 2013. All was seemingly well. At some point since, standards dropped to a level of contractual unacceptability, but this wasn’t brought to light until this year’s inspection. Learndirect did not previously appear on the ESFA’s list of “Current Notices of Concern”. The trend towards Grade 4 could well have been long term, but seemingly with no sufficient mechanism to flag and redress this. Once the Grade 4 was awarded, it was too late. Arbitrary termination kicked in and learners’ futures became even more uncertain.

This issue is compounded by the diversity of funding allocations. In August, Norfolk Training Services, with an ESFA funding allocation of £1.3m and around 400 apprentices, went into administration following a Grade 4 inspection. A regrettable story, but one where the redeployment of learners should be eminently manageable. In contrast, Learndirect’s 2016/17 overall funding allocation was over £150m – more than 100 times that of Norfolk Training Services, and a bigger single allocation than that of the 400 providers with the smallest allocations put together. Of course, this should warrant “Special Treatment”. You cannot simply turn off a £150m contract without consequences.

The bigger question is surely how any single provider should be awarded such a colossal allocation in the first place. If Learndirect are perceived as being “too big to fail”, it is only because of the scale of funding afforded to them. There are currently 30 providers with funding allocations over £20m, and almost 100 with over £10m each. Any of these could be the “next” Learndirect or First4Skills. If, however, the ESFA awarded more uniformly sized allocations, it would be far easier to apply consistent treatment to all, and the risk of financial exposure would be much reduced. The bigger the allocation, the greater frequency of monitoring required to negate the risk of a nasty surprise Grade 4.

Learndirect are certainly not getting it all their own way. The Public Accounts Committee are threatening an investigation, an arguably unprecedented response to a Grade 4 inspection, and perhaps Special Treatment of a different kind. Meg Hillier, Chair of the Committee, has already said: “There is no real prospect, it seems to me, of Learndirect surviving this scandal.” The pitchforks and torches are clearly out! But before we all too readily condemn Learndirect, let’s not lose sight of the important wider lessons needed to prevent a similar fate for any other provider.

Jim Carley, Managing Director, Carley Consult Ltd