Training and apprenticeships provider Intraining made a pre-tax loss of £1.39m in 2014 — the same year it lost a key contract to deliver part of the Government’s controversial Work Programme.
The North East firm, which is a subsidiary of NCG, the parent company of Newcastle College, saw profitability tumble during the year to the end of July 2014, despite an increase in turnover.
Pre-tax profit in 2013 had been £1.7m but that swung to a pre-tax loss of £1.39m during the following year.
Intraining managing director Linda Dean said: ''NCG our parent company hit all its financial targets for the last financial year and made its target budget surplus of more than £5m.
"This record makes it one of the most financially robust performers in the Further Education sector.
“Two key parts of Intraining’s work are apprenticeships and providing training for people on the Government’s Work Programme.
“During this period the number of apprenticeships nationally fell almost 14%, and as the Work Programme progresses and finds jobs for more people there are fewer people being referred for training, so overall income from these areas is falling.
“Like many organisations in the current financial climate, we have been reviewing our operating costs and looking for greater efficiencies, while at the same time looking to get extra income from new contracts and bids so we can look forward to a return to profitability in the long term.”
In March 2014 Intraining’s parent company, NCG, was served 12 months notice of termination on the Work Programme contract in North East Yorkshire and Humber by the DWP.
Employment Minister Esther McVey said the firm was the “lowest performing” of all delivery partners in the UK.
The £5bn Work Programme is a compulsory scheme for the long-term unemployed which provides careers advice, training and work experience placements.
At the time NCG’s Phil Bonell said the firm was extremely disappointed that DWP had taken the decision based on the long-term performance of the contract, and argued that significant improvements had been made prior to the termination.
In a report accompanying the accounts filed at Companies House, Intraining director Joe Docherty said: “Initial disappointing performance relating to delivery on the Work Programme contract in North East Yorkshire and the Humber was addressed during 2013/14 with performance significantly improved.
“Despite this, the contract was terminated by the Department for Work and Pensions under a clause that provided for either party to terminate the agreement with one years’ notice.
“Our key objectives are to minimise disruption to customers, ensure our customers secure employment and to maintain strong and effective relationships with DWP for the future.
“We are committed and determined to hand this contract over in the best possible condition and with the highest levels of performance. We believe this is the right thing to do for our people, for our customers and for the funder.”
Turnover increased from £61.6m to £68.9m and Intraining shed around 100 support staff from its ranks but boosted teaching and learning staff numbers by 107.
During the period Intraining set up the ESF/SFA co-financed Skills Support for the Unemployed and Skills Support for Redundancy contracts in the North East region and Birmingham/Solihull.
Through the contracts Intraining said it had delivered support to over 46,000 learners and customers.
This year the firm began to deliver the Skills Support for the Work Programme contract in the North West and a Tier 2 provider.
NCG group encompasses Intraining, Newcastle College and Newcastle Sixth Form College as well as West Lancashire College, and a charity, Rathbone, which helps young people back into education, employment or training.
NCG as a whole hit all of its financial targets for the financial year and made a budget surplus of more than £5m.