The UK government has dropped all contracts and funding from Learndirect, after the adult training provider attempted to suppress reports into its poor standards.
On Tuesday, the Department for Education announced its decision to terminate funding after Learndirect’s owners stood accused of exploiting millions of pounds of taxpayers’ money despite “catastrophic decline” in standards.
Last week, Learndirect sought a court injunction to prevent the publication of a highly critical report by education regulator Ofsted, attracting widespread criticism and eventually prompting the government’s withdrawal of involvement.
Learndirect had said that publication of the aforementioned report would create a risk of “irreparable damage including financial consequences” and government termination of funding.
Ultimately, Learndirect’s request was denied by the court last Friday, allow the damning report to be released on Thursday. According to Ofsted inspections, the organisation achieved its lowest possible rating.
Ofsted have since said they are “pleased” with the courts decision to refuse an injunction against the publication.
In defence of the controversy regarding the company’s financial decisions, a spokesperson for Learndirect said:
“Learndirect Limited’s underlying business remains stable and we continue to be focused on supporting our learners as usual,”
“Normal dividends were paid to our shareholders when the business was growing rapidly, generating significant profits of more than £25m in 2013, and the sector outlook was positive,” he continued.
Lloyds Development Capital, the private equity component of Lloyds Bank (LON:LLOY), which owns 65 percent of the company, said:
“Over the last six years and under private ownership, the business has helped more than half a million learners. We provided £37m of additional funding in the last three years to support the company during a period of severe public sector funding cuts.”
Learndirect is provider of skills, training and employment services, providing courses in IT, English and Maths for more than 73,000 trainees across the UK.
Shares in Lloyds Bank are steady, up 0.03 percent as of 10.58AM (GMT).