A national training organisation that claims on its website to have “created more opportunities than any other apprenticeship provider” has entered administration.
Derby-based 3aaa’s receivership puts at risk about 4,500 apprenticeships and 500 jobs at 42 sites across the country. The company received more than £31m in government funding last year – the seventh highest allocation of any provider in the UK.
The Department for Education has passed on the findings of an investigation into the company to police officers at Action Fraud and said its priority was to “protect the apprentices and to ensure minimum disruption to their learning.
“We will source high-quality alternative provision as quickly as possible and support apprentices and employers to enable them to continue with their apprenticeship programme.”
A DfE spokesperson told FE Week: “We have terminated our contracts with 3aaa. We have put a specialist team in place to identify new providers and help learners with as little disruption as possible.
“We will look very carefully at what lessons can be learned as a result of this investigation.”
The apprenticeship organisation was put up for sale earlier in the month after its recruitment was suspended while an Education and Skills Funding Agency (ESFA) investigation of its achievement rates was undertaken. It hired accountancy firm BDO to seek potential bidders but no sale was progressed.
The training provider made a £2.5m post-tax loss in the 18 months to January 2018 and was loaned £5.5m by Beechbrook Capital in April this year.
Because of an earlier ESFA investigation into 3aaa, Ofsted declared its latest inspection of the provider, which was expected to result in another “outstanding” rating, as incomplete in June. ESFA does not comment on investigations and their sources but told FE Week that it had issued notices to terminate all contracts with 3aaa by January 2019. “During the notice period, the suspension on apprenticeship enrolments remains in place,” it stated.
A statement issued on behalf of 3aaa’s directors yesterday said: “The directors of 3aaa (the company) have today requested receivership to administer the business arrangements of the company with immediate effect.
“This follows a meeting with the ESFA on Wednesday, October 10, at which the ESFA confirmed there would be no further progress payments for learners on programme. This immediately removes the ability for the company to continue to operate.
“This affects the employees, apprentices and clients with whom 3aaa has a relationship and to whom each employer of the apprentice must now determine with whom they wish the apprentice learning should take place in the future.
“The new management had hoped that the ESFA would have allowed it to have transferred the business to another qualified operator or in the worst case arranged an orderly closure of the business.
“The ESFA has opted not to allow that to happen so, in these extreme circumstances, the directors have no option but to take this course following this ESFA decision.”
Peter Marples and Di McEvoy-Robinson, who set up 3aaa in 2008, resigned from their roles as the company’s chief executive and main director respectively in September.
According to national achievement rates tables, 3aaa is the largest provider of 16-18 apprenticeships and in 2016-17 had 1,720 apprentices in that age range leave or finish their apprenticeships. 3aaa had about 1,700 active customers, 1,500 non-levy clients and 165 levy customers.
According to the Derbyshire Live website, another East Midlands apprenticeship provider, CT Skills, has set up a hotline for 3aaa employees, learners and employers to contact. Chief executive Alex Ford said: “We know there are very many good people at 3aaa. We know that these good people are not the cause of 3aaa entering into administration.”
Derbyshire Live also contacted several apprentices about the company’s demise. One told the website: “Our tutor was called away and 10 minutes later came back with the news that we were to go home because 3aaa was no more. Everyone was pretty upset about it and it came totally out of the blue for everyone. I am lucky because my employer will help me to find another provider. It won’t be the same because I had a good relationship with my tutor and mentor, which has now ended very abruptly.”