LearnDirect - lessons to learn?

Brown’s dream

I was a Trustee of LearnDirect for many years and played a role in its sale to Lloyd’s Capital and in setting up the Charity from the proceeds of the sale – Ufi. It’s a salutary tale of a political football that was started by Gordon Brown, with great intentions. It was originally seen as a brake on the University system aimed at the majority of young people who were being failed by the system. It’s aim was vocational – hence the name - University for Industry. However, it morphed into something a little different – essentially a vehicle for whatever educational ails the government in power identified as in need of a sticking plaster – numeracy, literacy, ILAs, Train to gain… in this manifestation it was a Charity that delivered on whatever the Government asked it to deliver. Good people doing a good job but straightjacketed by a succession of oddball policies around low-level skills and vocational learning. It was a sort of public/private, hybrid model with a charity at the core and a network of delivery Centres. Eventually, as things went online, we trimmed the network – that was the right thing to do. What it didn't do was stay true to the original aim of having a vocational alternative, with a strong online offer, an alternative to HE. It was basically a remedial plaster for the failure of schools on literacy and numeracy. The lesson to learn here was to have a policy around vocational learning that really does offer a major channel for the majority of young people who do not go to University. Lesson - we now have that with the Apprenticeship Levy. There is no need for a LearnDirect now.

Sheffield factor

Based in Sheffield, it was also a sizeable employer in the North, stimulating the e-learning industry in that town. The city never really exploited this enough, with the hapless, EU-funded Learning Light, that was hijacked by some local who simply turned it into a ‘let’s spend the money’ entity. I was a Director of this and resigned when the Chair was ousted and stupid, local politics caused chaos. Missed opportunity. Nevertheless the city grew its e-learning sector. Interestingly, both Line and Kineo started production studios out of London and Brighton – where the real action was. But it was a good skills base with some really good, local, home-grown companies. Lesson - something should be salvaged here. Lesson - a smooth transition of contracts could encourage companies and organisations to take on redundant staff. The problem would be the terms and conditions, and general practical difficulties.

Gun to the head

Then came the crunch – the Conservative Government came in and the bonfire of the quangos started. LearnDirect (Ufi) was seen as a quango (some truth in this) and the trustees were told that contracts would not be renewed unless it was sold. It was a gun to the head – we had no choice. So we sold the company in 2011 – that was our duty. I remember the day that the Lloyds Capital guy turned up in a red Ferarri – he was an arrogant, asinine fool. Remember that Lloyds at that time were 40% owned by Government. I didn’t like the deal - it stank. 

Phoenix - Ufi

What we did, however, was not simply hand the £50 million plus cheque back to the Conservative Party run Treasury. Out of the ashes, a few of us set up Ufi as a new charity, with a focus on technology in vocational learning. This is still going strong. It has stimulated the sector with MOOCs on Blended learning for vocational teachers, and projects that are now being used in Apprenticeships and vocational learning. Lesson - don't give in - be imaginative in finding new solutions that push innovation and technology. 

LearnDirect and Ofsted

Then came the second crunch – an Ofsted inspection. I don’t have much time for all of those people who whine on about Ofsted, then turn turtle to praise them when it suits their political agenda. Ofsted did what it was meant to do – act as a quality control mechanism to stop these excesses and failures – good for them. It wasn’t as if there was much ambiguity here – LearnDirect was failing to deliver and failing the young people under its care. Lesson - we need Ofted/TEF and quality control across education.

Ugly private equity

What happened to LearnDirect was sad. The private equity guys started to rip out the cash. Their first act was to spend £504,000 on F1 sponsorship (the hopelessly inept Marussia Team, partly owned by Darryl Eales - the LDC guy who did the deal)– probably one of the most dishonest acts I’ve ever seen in business. F1 was his hobby – he should have been crucified. What they did was merge with another weak, almost broken, training company (JHP Group) and tried to rebuild, not by building on what they had, but by cutting costs and being rapacious in stripping out cash in dividends.

What next?

It will limp on. The owners have an asset that has plunged in value and their goal will simply be to salvage the residual value. The contracts will go on for another year but the Government has announced that they will end in July 2018 – so the game is up. The 53 suppliers may be in real trouble but if they failed to deliver, that is their problem. They tried to sell it before this calamity and failed as it was hopelessly overvalued. It is now practically worthless when the government contracts dry up – as they should. That’s a shame, as it could survive if it were taken over by someone in the sector. I don’t mean a College, and certainly not a University. The government should intervene here and effect a transition to another entity to protect what jobs they can but more importantly provide a better deal for the tens of thousands of young people who have had their life chances dented by these clowns. Lesson - for my money City and Guilds would be a great candidate. They have the brand, the financial stability, they're a charity and they know what they're doing.