Senior managers at Learndirect “failed to take swift and decisive action to stem the decline in performance over the past three years”, according to an Ofsted report which has given the country’s biggest training provider an “inadequate” rating.

The report, finally published today after the inspection took place in March, confirms that its overall grade has dropped from “good” since its last full inspection in 2013.

The publication comes after the Department for Education this week confirmed that, rather than its usual practice of giving providers three months’ notice of their Education and Skills Funding Agency (ESFA) contracts being terminated, Learndirect’s ESFA contract will end on 31 July 2018. It will be gradually wound down, rather than immediately terminated, in order to protect learners and apprentices, according to the DfE.

A spokeswoman said: “Where providers are failing to meet the required standards it is right that action is taken.”

She added: “We are working with Learndirect and employers to put safeguards in place and ensure no apprentices lose out as a result of the contract ending.”

‘Insufficient training’

The Ofsted report points out that “too many 16- to 19-year-old learners on traineeships do not complete their programmes” and “too few adult learners secure employment when they leave Learndirect”.

“Too many apprentices receive insufficient training to develop new skills, and they do not receive enough off-the-job training,” it adds.

The performance of Learndirect’s 54 subcontractors is “not managed rigorously enough, with the result that apprentices taking qualifications with subcontractors achieve significantly less well than apprentices trained directly by Learndirect”.

The report also raises concerns about “insufficiently robust” monitoring and tracking of apprentices’ progress, the performance of tutors and assessors and the development of learners’ English and maths skills.

Overall, Learndirect - which had 79,457 learners over the last full year - was rated “inadequate” for apprenticeships and outcomes for learners, and given a “requires improvement” grade in five other categories.

‘Early signs of improvement’

The report adds: “The new senior management team has begun to tackle the main weaknesses; early signs of improvement indicate that their actions are beginning to have an impact.”

In 2016, the directors of Learndirect Ltd took the decision to set up two separate companies: Learndirect Ltd for adult learning, and Learndirect Apprenticeships Ltd for apprenticeship and traineeship provision. Both companies are overseen by the board of directors of a holding company, Pimco.

Earlier this week, Learndirect insisted that its business remained “stable” in spite of the turmoil.

‘Financially stable’

A spokesperson for Learndirect said: “We’d like to reassure all our learners, employees, suppliers and partners that Learndirect Limited is financially stable. The business is well-supported by our stakeholders and will continue to meet its contractual obligations and the needs of our learners as usual.

“Like all providers in the sector, we’ve had to manage a reduction in central government funding. For Learndirect Limited this totals a 50 per cent reduction in our adult skills funding over the last five years. These funding reductions were made at short notice and required significant changes to the business for it to remain viable. Our new senior management team, with the support of our stakeholders, has moved quickly to ensure the business responds to the challenges this poses. This includes diversifying our income streams and starting to address areas that require development.

“Ofsted’s report acknowledges the improvements being made in this area and the business has moved on further since the inspection in March 2017, with rising learner satisfaction scores and success rates.”

Learndirect’s levy business, Learndirect Apprenticeships Limited, and the courses it operates for the Department for Work and Pensions, European Social Fund, Home Office, the Standards and Testing Agency and local bodies would be unaffected, the spokesperson added.

Want to keep up with the latest education news and opinion? Follow Tes FE News on Twitter, like us on Facebook and follow us on LinkedIn