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Major training firm walks away from £5.5m deal because of city region business bosses’ demands

The country’s largest skills provider has walked away from a £5.5m contract to help train employees in Merseyside after local leaders demanded businesses put their own cash in to the deal.

Learndirect has withdrawn from the Skills Support for the Workforce programme – which aimed to use nearly £5.5m of European funding to help fill the skills gaps of employers across the Liverpool City Region.

Learndirect said the “difficult decision” to walk away from the contract was taken because the Liverpool City Region Local Enterprise Partnership (Liverpool LEP) had decided that any training delivered on the programme should be funded by a 20% cash contribution from the employers involved.

It said this requirement had proved “a real barrier” for many of the firms it was working with and was something it hadn’t encountered elsewhere.

But the Liverpool LEP – which is the city region’s economic development company – said the requirement for employers to “co-invest” in training was not a unique one and insisted that the funding has not been lost.

The cash was awarded to our region through a co-financing arrangement between the European Social Fund and the Government’s Education and Skills Funding Agency.

Learndirect was the successful applicant and was due to deliver the training over the next three years.

But it has now pulled out, blaming the Liverpool LEP’s requirements.

Liverpool City Region logo

A spokesman said: “At Learndirect we’ve had to take the difficult decision to step away from delivering the Skills Support for the Workforce programme in Liverpool City Region. This great programme aims to fill the skills gaps of employers in priority sectors across Liverpool by delivering funded, accredited training to employees.

“This decision was made as the Local Enterprise Partnership felt any training delivered on the programme should be funded by a 20% cash contribution from employers. Unfortunately, this contribution has proved a real barrier for many of the employers we were working with, so sadly we’ve had to hand the contract back.”

He added: “We are delivering this kind of contract in conjunction with Local Enterprise Partnerships in other areas of the country and we haven’t encountered this requirement elsewhere.”

But Mark Basnett, managing director of the Liverpool City Region Local Enterprise Partnership suggested his company’s requirements were nothing new.

He explained: “Through a European Social Fund (ESF) co-financing agreement with the Education and Skills Funding Agency the Liverpool City Region set out a specification to deliver training for local employers with a requirement that employers co-invest in training.

“This is not a unique requirement and indeed this model has already been adopted in the City Region and in other UK cities.


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“The successful applicant (Learndirect) subsequently felt they could not meet the terms of the agreement and chose to terminate the contract with the Education and Skills Funding Agency.

“It must be stressed that this funding has not been lost and will be re-invested back into the City Region via the Education and Skills Funding Agency for the benefit of employers and learners.”

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