LearnDirect, the adult learning and apprenticeship provider, has lost its government contracts following a High Court battle.
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The organisation, which currently has over 70,000 trainees on its books, has also been banned from taking on new apprentices.
The move follows a joint investigation by the Financial Times and Further Education Week into collapsing standards at the provider.
Asset stripping allegations
LearnDirect was privatised in 2011, and is now owned by Lloyds Bank. According to the FT investigation, its owners have received tens of millions of pounds in payouts from the company since its sale.
Meanwhile the organisation has attempted to suppress the publication of a highly critical report from Ofsted, which LearnDirect said would cause “irreparable damage including financial consequences.”
However, in an unusual move, the government has given LearnDirect an extra eight months’ notice that it will be cutting contracts, in addition to the standard three.
The court heard that the number of LearnDirect apprentices who did not complete their training on time had increased “steadily over the last three years.”
Crucially, it was also alleged that around one in three apprentices was not receiving their off-the-job training, a key part of an apprenticeship scheme.
According to the Institute for Public Policy Research, LearnDirect has received £631 million since its privatisation.
But LearnDirect have been critical of the Ofsted report, suggesting that its sample size was too small to give a representative picture of its training.
In a statement, a spokesperson said: “LearnDirect Limited’s underlying business remains stable and we continue to be focused on supporting our learners as usual.”
Thinking about taking on an apprentice? Read our guide to hiring an apprentice for your small business.