UK Learning Academy Ltd v The Secretary of State for Education

A contractual maximum funding value cannot be displaced by informal assurances where the contract requires variations to be agreed in writing and signed by both parties. A contractual power to adjust payments must be construed in the context of the agreement as a whole and may not be used to remove a substantive funding cap where it was intended only to reconcile profile payments. Estoppel against contractual formalities requires an unequivocal representation that the variation was valid despite informality, together with something more than the informal promise itself. A learner starts when the first lesson or structured learning takes place, not ordinarily on induction or enrolment.

UK Learning Academy Limited claimed payment from the Secretary of State for Education under contracts and purported contract variations relating to Train to Gain education funding formerly administered by the Learning and Skills Council.

The principal claims concerned funding above a maximum contract value for learners said to have started before 1 April 2009, a 2009–2010 Yorkshire letter of intent, and alleged North East contracts. The Defendant disputed the variations, contractual formation, learner starts and entitlement to payment, and advanced an audit-based counterclaim.

1. The 2008 Yorkshire Contract. The contract, read as a whole, imposed a maximum contract value. Schedule 2, paragraph 4.4 concerned the reconciliation of profile payments for learner-responsive provision. It did not permit the unilateral removal of the maximum value for the employer-responsive Train to Gain programme. Any variation of the maximum value therefore required mutual agreement, writing and signatures by both parties.
2. None of the letters, emails, website material or newsletters relied on by UKLA amounted to an offer to vary the contract so as to remove or increase the cap. Nor did UKLA communicate unequivocal acceptance of any such offer. In any event, the contractual formalities were not satisfied.
3. Applying MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] 2 WLR 1603, the evidence did not establish an unequivocal representation that the variation was valid despite informality, or the additional element required for an estoppel. The claim for £800,553.24 therefore failed.
4. If the variation had otherwise been established, a learner would ordinarily have started when the first lesson or structured learning session took place. Induction, enrolment or an initial assessment was insufficient. An SFL start did not constitute an NVQ start because the relevant learning aims were different.
5. 2009–2010 Yorkshire funding. The 2009 Yorkshire letter of intent was countersigned and posted on 25 June 2009. Applying the postal rule, it varied the existing three-year contract by fixing a £130,000 maximum value for 2009–2010. UKLA was entitled to payment for 21 learners who had their first lesson before 18 September 2009, calculated by reference to the applicable start payment and the assumed 70:30 split between higher and lower payment rates. The parties were directed to agree the principal sum, failing which further submissions or an inquiry would be required.
6. The North East clarification form did not create an enforceable contract because essential terms remained to be agreed and the surrounding documents showed no immediate intention to be bound. The 2009 North East letter of intent likewise did not create a contract where no existing agreement or terms were identified.
7. The audit counterclaim failed. Under clause 12.3, the LSC had finally determined that the recoverable amount was nil, and no basis was shown for resiling from that decision.

UKLA’s claim succeeded only to the limited extent of the 2009–2010 Yorkshire start payments. Otherwise the claim and the Defendant’s counterclaim were dismissed.