Pearson to close apprenticeship unit putting 500 jobs at risk

The media and education group, which also owns publisher Penguin Books, said that changes to the way apprenticeship schemes are funded had had a “radical” impact on demand for the courses offered by Pearson in Practice, which are tailored to specific industries and each last between three months and a year.

Around 5,000 apprentices signed up to the schemes will be farmed out to other providers, and around 500 staff, largely based in Nottingham, Manchester and Banbury, have been put into consultation over their jobs.

Pearson paid £95m for Pearson in Practice, then called Melorio, but is expected to take a £120m hit from the closure of the business.

John Fallon, who took over as chief executive of Pearson at the start of this year, said: “We very much regret the decision to plan for closure but we believe we have explored and exhausted all alternatives.”

The company said in October that it would put Pearson in Practice under review because of the changes to the industry.

For a long time, companies hiring apprentices were effectively forced to use third-party providers like Pearson in Practice in order to secure Government funding. However, they are now allowed to bid for funding for an apprenticeship scheme and use that money to pay a third-party company to provide the training, or organise the training themselves.

The change in policy was introduced in a pilot scheme last year and is expected to be formalised shortly.

Pearson is in talks with further education colleges to take on some of Pearson in Practice’s assets, as well as its students.

Separately, Pearson has denied a report in the South China Morning Post that the company has started sounding out potential buyers in China to buy the Financial Times.

Speculation that the group will sell the newspaper has stepped up a gear since Mr Fallon’s predecessor, Dame Marjorie Scardino, announced last year that she would be stepping down.

The group has been clear that it wants to focus on its fast-growing education business, but the Financial Times muddies the waters for investors.

The newspaper is thought to be worth around £1bn, but could go for as much as double that as a trophy asset, despite its falling readership.

Source: 7 January 2013, The Telegraph by Katherine Rushton, Media, Telecoms and Technology Editor

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/9785531/Pearson-to-close-apprenticeship-unit-putting-500-jobs-at-risk.html