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Skill Centres

Volume 175: debated on Wednesday 4 July 1990

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To ask the Secretary of State for Employment if he will give details of the negotiations with the Lakin consortium for the purchase of four skill centres, listing significant dates.

[holding answer 25 June 1990]: The Lakin consortium's original bid for part of the STA was unsuccessful. However, the consortium contacted Deloittes on 14 February to register that it was interested in purchasing some of the skill centres which remained unsold following the announcement of the sale on 13 February. Negotiations then took place and the consortium's offer for the purchase of Cumbria, East Lancashire, Ipswich and St. Helens skill centres was accepted on 28 February.

To ask the Secretary of State for Employment what was the expenditure, income and surplus or deficit forecasts from the skill centre sold to (a) Astra Training Services Ltd., (b) Training Business Group Ltd., (c) METEL and (d) the Lakin consortium.

[holding answer 25 June 1990]: The income, expenditure and operational deficit for skill centres grouped by purchaser for the year 1989–90 were:

Income £,000Expenditure £,000Deficit £,000
a. Astra Training33,01346,89413,881
b. The Training Business4041,036632
c. METEL548786238
d. The Larkin Consortium1,1492,108959
The expenditure figures relate to skill centres only and take no account of the contribution which skill centres were normally expected to make towards the cost of STA's head office and regional offices. They therefore understate the true deficit.

To ask the Secretary of State for Employment what was the sale price of Liverpool skill centre and the asset value of the site.

[holding answer 25 June 1990]: No sale price was fixed in advance for this or other centres. Bids were invited for the training business and associated assets, and the ones that best met the Government's objectives for the sale were accepted. In the case of Liverpool this involved a payment to the Government of £65,000.However, I am assured that the asset value given by the Government's advisers compares favourably with the value ascribed to it by the successful purchaser and was taken fully into account in arriving at the final consideration.

To ask the Secretary of State for Employment whether the directors of Training Business Group Ltd. and purchasers had any previous experience of providing training prior to their bid for the Lambeth skill centre; what were the names of the predecessor companies to Business Training Group Ltd; and whether the accounts of these companies have been examined at Companies House.

[holding answer 25 June 1990]: The Training Business Group had experience of providing training prior to its bid for Lambeth skill centre.

My Department's advisers, Deloittes, investigated the standing of all purchasers including the Training Business. I have no knowledge of any predecessor companies.

To ask the Secretary of State for Employment (1) what assessment was made of the potential purchasers of the skill centres before the recent privatisation;(2) what assessment was made of the potential purchasers of the skill centres, with regard to

(a) previous experience of training, (b) financial viability and (c) involvement with other companies.

[holding answer 25 June 1990]: In assessing the final offers for Skills Training Agency training businesses, the Department's professional advisers, Deloittes, undertook an analysis of the individual bidders' background, viability, their business plans and their compatibility with the Government's objectives for the sale. This analysis formed part of Deloittes' final recommendation to the Secretary of State.

To ask the Secretary of State for Employment whether companies or individuals who had unsuccessfully bid for any or all of the skill centres were contacted about the further sales of four skill centres which were subsequently transferred to the Lakin consortium.

[holding answer 25 June 1990]: Apart from the Lakin consortium, three companies which had put in final offers made inquiries about some of the four skill centres eventually sold to Lakin, but did not pursue this interest or put in a bid.It was not judged necessary to approach bidders who had sought to purchase a large network of skill centres as during earlier negotiations it was apparent that they were interested only in purchasing large networks.

To ask the Secretary of State for Employment if any of the bidders for any of the skill centres was asked to resubmit bids after the final bids were received by his Department; and if he will make a statement.

[holding answer 25 June 1990]: The final bids received by my Department were subject to some modifications during the negotiations.After the announcement of the main sales on 13 February 1990, negotiations took place between my Department's advisers and some companies that had made unsuccessful bids, but that subsequently expressed interest in unsold centres.

To ask the Secretary of State for Employment what is the total amount of employment training expenditure to the Skills Training Agency skill centres in 1988–89, the outturn expenditure for 1989–90 and the estimated expenditure for 1990–91 and 1991–92.

[holding answer 25 June 1990]: When employment training was first introduced in September 1988 contracts for the provision of training were awarded by the Training Agency on the basis of free competition. Contracts won by Skills Training Agency skill centres resulted in expenditure in 1988–89 and 1989–90 by the Training Agency of £8.6 million and £16.8 million respectively. Contracts extant at the time of the sale were transferred to the purchasers of STA skill centres or renegotiated, at which time they moved out of the public sector domain. Payments on contracts in 1990–91 for employment training still held by skill centres up to the date of sale and those not included in the sale to the private sector are expected to amount to £3.2 million. Unsold skill centres are to be wound up once their contract liabilities have been discharged; no expenditure is expected beyond the autumn of 1990.

To ask the Secretary of State for Employment if there were any positive cash amounts bid for any of the four skill centres subsequently transferred to the Lakin consortium.

[holding answer 25 June 1990]: At the final offer stage a positive bid was received for one of the skill centres (East Lancashire skill centre) which were eventually purchased by the consortium headed by Mr. Lakin. This bid formed part of a network offer which was unsuccessful, and the potential purchasers were not prepared to buy the single skill centre alone. No other positive offers were received at the final offer stage of the sale.

To ask the Secretary of State for Employment if he will list (a) meetings held with potential bidders for the skill centres and (b) the dates on which letters were sent to prospective bidders, about the privatisation of the skill centres, in the period 19 February 1988 to November 1990.

[holding answer 25 June 1990]: I regret that the full information asked for can be obtained only at disproportionate cost, and some, including details of negotiations, must be regarded as commercially confidential. However, letters were sent to all bidders between 2 October 1989 and 27 October 1989, and also on 17 November 1989, 21 November 1989, 6 December 1989, 11 December 1989, 19 December 1989, 20 December 1989, 22 December 1989, 4 January 1990, 5 January 1990, 11 January 1990, 22 January 1990, 12 February 1990 and 13 February 1990.

To ask the Secretary of State for Employment if he will give the dates on which the bids from (a) Astra Training Services Ltd., (b) METEL, (c) Training Business Group Ltd. and (d) the Lakin consortium for the purchase of skill centres were accepted.

[holding answer 25 June 1990]: The offers from the successful bidders for STA training businesses were accepted on the following: Astra Training Services Ltd.—12 February; Merseyside Education Training Enterprise Ltd.—12 February; Training Business—2 March; the Lakin consortium—28 February.

To ask the Secretary of State for Employment who were listed as shareholders of Astra Training Services Ltd. in its bid for the purchase of skill centres.

[holding answer 25 June 1990]: Astra Training Services Ltd. set up a company prior to the indicative offer stage of the sale. It was formed solely as a vehicle to enable the management buy-out team to launch a bid and was called Vetin Ltd. The shareholders were listed as:

  • Stuart Bishell
  • Trevor Kent
  • Phillip Wells
The name of this company was later change to Astra Training Services Ltd.

To ask the Secretary of State for Employment what representations have been received from Edinburgh chamber of commerce concerning the Edinburgh skill centre; and if he will make a statement.

[holding answer 25 June 1990]: I have received one letter about the STA privatisation from the Edinburgh chamber of commerce and manufacturers.

To ask the Secretary of State for Employment what were the operating deficits of each of the skill training centres for each of the standard regions of Wales and Scotland.

[holding answer 25 June 1990]: Provisional unaudited figures for 1989–90 indicate that the following operational deficits were incurred by skill centres in Wales and Scotland:

£'000
Wales
Cardiff310
Gwent302
West Glamorgan65
Wrexham323
Scotland
Bellshill329
Dundee219
Dunfermline344
Edinburgh659
Hillington611
Irvine151
The figures relate to skill centres only and take no account of the contribution which skill centres were normally expected to make towards the cost of STA's head office and regional offices. The true deficit is therefore understated.