The monitoring, inspection and funding of Learndirect Ltd. Contents

2Inspection

Planning and prioritising inspections

14.We asked Ofsted about its risk assessment process, and how this influences the timing of inspections. Ofsted told us that it carries out a risk assessment of providers each year. The assessment is based on outcome data typically made available around six months after the end of the academic year to which they refer, along with any other intelligence received.21

15.Ofsted inspected Learndirect Ltd in March 2013, and rated the company’s overall effectiveness as ‘good’. This meant that, unless subsequent risk assessments gave cause for concern, Ofsted would next conduct a short (rather than a ‘full’) inspection in 2018. Ofsted did not carry out a risk assessment of the company in 2014, because it took assurance from the outcome of its 2013 inspection.22

16.Ofsted explained that it first saw the decline in Learndirect Ltd’s apprenticeships outcomes in early 2015, which reflected results from the 2013–14 academic year, during which the company engaged with over 20,000 apprentices. It therefore gave Learndirect Ltd an amber risk rating in spring 2015, based on a ‘poor’ score for apprenticeships and a ‘fail’ for some small elements of provision. However, at that point the company’s performance was still above the benchmark average, so Ofsted “did not see it as an urgent case for inspection”.23

17.Ofsted explained how, in early 2016, it saw that Learndirect Ltd’s performance on apprenticeships in the 2014–15 academic year placed it below the sector average for comparable provision. In March 2016, Ofsted changed its assessment of Learndirect Ltd’s risk rating to red, due to poor performance in a number of areas including apprenticeships. In July 2016, Ofsted concluded that, based on this risk assessment, it should amend its plan to conduct a short inspection by August 2018 and instead schedule a full inspection for November 2016.24

18.We asked why Ofsted did not schedule a short inspection in spring 2015, given the company’s decline in performance and the large number of apprentices involved. Ofsted told us that even a short inspection, when conducted on a provider as large as Learndirect Ltd, requires a substantial team and would have entailed postponing other planned inspections. Ofsted further explained that a full inspection of Learndirect Ltd requires the organisation to commit around 15% of its total capacity to inspect further education and skills providers.25

19.Ofsted also stated that the introduction of the apprenticeship levy in April 2017 may lead to significant growth in the provider-base in the further education sector, which will present Ofsted with a resourcing challenge. Ofsted told us that it is conducting particularly careful risk assessments of new providers, and is using data about the use of subcontractors to give it additional perspectives on provider risk.26

Deferring inspections

20.We also asked about Ofsted’s approach to deferring planned inspections. Ofsted explained that it has a formal deferral policy, which it applied in the case of Learndirect Ltd.27 Ofsted told us that, in September 2016, Learndirect Ltd asked some hypothetical questions about whether the sale of its apprenticeships business would trigger the deferral of any planned inspection. Ofsted explained that, in October 2016, around a month before it had planned to inspect Learndirect Ltd, ESFA provided notification that negotiations for the sale were in progress. Ofsted said it had examined its deferral policy, which states that an inspection may be deferred if “the provision is due to merge, close or move, and it is decided that no useful purpose will be served in inspecting it.” Ofsted concluded that, if it were to notify Learndirect Ltd of an imminent inspection and the company formally applied for a deferral, a deferral was likely to be granted under the policy as it stood.28

21.Ofsted told us that, in December 2016, it heard that the proposed sale of Learndirect Ltd’s apprenticeships business had fallen through. It therefore initially re-scheduled its inspection for February 2017. However, a subsequent delay in the production of final performance data for the 2015–16 academic year, which was important for the inspection, prompted Ofsted to put the date back to 20–23 March.29

22.On 16 March 2017, Ofsted notified Learndirect Ltd about its planned inspection. The company immediately asked Ofsted to defer the inspection, because it was in the process of transferring its apprenticeships activity to another company in the Group, Learndirect Apprenticeships Ltd. The transfer meant that Learndirect Ltd would not be delivering any more apprenticeships training after 1 May 2017. Ofsted rejected the request, based on: uncertainty about the timing of the transfer; the large number of learners involved; and the apparent decline in performance. It carried out a full inspection on 20–23 March, as planned.30


21 Qq 40, 53

22 Q 40; C&AG’s Report, paras 3.1–3.3

23 Qq 40–41, 44; C&AG’s Report, paras 1.5, 3.3

24 Q 40; C&AG’s Report, para 3.4

25 Qq 42, 45

26 Qq 53–56

27 Q 45

28 Qq 27, 45, 51; C&AG’s Report, para 3.5

29 Q 45; C&AG’s Report, paras 3.6–3.7

30 Q 14; C&AG’s Report, paras 3.7–3.8




28 February 2018