Outgoing ESFA chief ‘takes responsibility’ for decision to keep funding Learndirect

Peter Lauener defends “different approach” to contract termination after provider’s inadequate Ofsted rating

DfE permanent secretary Jonathan Slater and ESFA chief executive Peter Lauener were questioned by the PAC on 12 October. Credit: Parliament TV

By Tamsin Rutter

13 Oct 2017

The outgoing chief executive of the Education and Skills Funding Agency has taken “personal responsibility” for the decision to continue giving public money to training provider Learndirect until July 2018 despite its “inadequate” Ofsted rating.

Following the launch of a National Audit Office investigation into Learndirect funding, Peter Lauener told MPs he had decided to “take a different approach” from the usual ESFA policy to terminate the contract of failing providers within three months.

He denied that Learndirect, the UK’s largest single provider of education and skills training, was “too big to fail” and said he had prioritised the “continuity of provision for learners”.

Lauener also said that despite the overall “inadequate” rating, the provider’s Ofsted grade in certain categories – such as leadership and management and adult education provision – was the lesser “requires improvement”.

He said: “It’s not great, but we would not normally take immediate termination action with that kind of grade profile.”


Learndirect provides services to more than 70,000 learners a year and was government-owned until privatisation in 2011, since when it has reportedly received more than £600m in public funding.

The Ofsted report, which was published in July, was particularly critical of provision for apprentices – it said too few of them had achieved their target qualifications, completed their programmes of study or received their legally required on-the-job training.

Lauener told MPs at a Public Accounts Committee hearing on Thursday that the ESFA, which sits within the Department for Education, did have contingency arrangements that could have been enacted, had Learndirect’s contract been terminated.

“I take personal responsibility for this, I looked at the case very carefully and I felt that the right thing to do in terms of continuity of provision for learners and other service users… [was to] take a different approach,” he said.

Learndirect will receive £18m for its work in the period from July to September and a further £29m for the nine months to the end of July 2018, he said.

There are now tighter monitoring arrangements in place, he added.

DfE permanent secretary Jonathan Slater was also questioned by the PAC yesterday. He said Learndirect had not taken on any new apprentices since May.

Slater said that before the report had been published the department had already reduced the level of spending on Learndirect by around a third because it believed it was receiving “too big a proportion of the total”.

Slater reiterated his department's claim that the provision giant had not “received special treatment”.

The NAO agreed to investigate Learndirect's finances after a referral from PAC chair Meg Hillier. She said yesterday that the provider had promised to open up its books to the NAO.

Lauener is due to retire in November having been chief executive since the agency was created following a merger in April 2017 of two departmental bodies – the Education Funding Agency and the Skills Funding Agency, both of which he also headed up. Eileen Milner, formerly of the Care Quality Commission, has been appointed his successor. 

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