A leading education charity suing the government after it lost out on the flagship Institute of Teaching contract wants £750,000 in damages to cover “wasted costs”.
The Ambition Institute has lodged a High Court legal challenge against Nadhim Zahawi over the £121 million contract, Schools Week revealed on Friday.
Court documents show Ambition believes the Department for Education’s decision to hand the contract to a consortium of leading trusts was “manifestly erroneous”.
This means the contract award to the School-Led Development Trust – comprised of leading trusts including the Harris Federation and Star Academies – was “unlawful”, they claim.
Ambition has now demanded the government hands them the contract or pay up £750,000 for “wasted bid costs”, court documents seen by Schools Week show.
We also understand the government has applied to get an injunction on naming the winning bid dropped. The injunction was imposed as part of the legal challenge.
The court documents show the bid from Ambition – a teacher training charity largely funded by government grants – was rejected because of its “unacceptably high level of financial risk”.
DfE said the majority of Ambition’s delivery partners – which include the Ark academy trust – would need to outperform their three-year recruitment average and “grow very significantly” to meet the proposed volumes under the IoT.
Ambition bid would ‘take trainees from top unis’
The IoT will be the country’s “flagship teacher and leader development provider”. It is supposed to have 500 trainees from September 2023, and 1,000 the following year.
But from this September it will also support 2,000 early career teachers and their mentors, 1,000 national professional qualifications and train more than 400 national leaders of education.
The legal action means the institute is well behind schedule. It was supposed to start a period of “set-up and mobilisation” from February, but three months later the winners have not even been publicly announced.
The DfE also said Ambition’s bid would “very likely” need to “claim some of the existing market share of established providers”, including “reputable” universities to meet its first-year targets.
As a result, it is “considered likely that the Institute could suffer a significant financial distress event from which it may not recover”, the DfE told Ambition in a February letter.
The subsequent impact “may undermine the overall sustainability of both the Institute” and Ambition, DfE said.
However the charity said it could use operating reserves and call on loans from its partners, including Ark and Delta Academies Trust, if low numbers were recruited.
Ambition told the government the additional measures meant it would not generate a loss unless recruitment volumes fell to 32 per cent of those proposed, which it said was “very unlikely”.
The charity thought it had given the DfE the “necessary information to address its concerns about its financial model” after a meeting.
Ambition challenges DfE loss claims
But the government said it had not gained “sufficient confidence” the quality offer could be sustained on lower recruitment numbers.
It predicted a deficit of between £6.9 million and £10.1 million over the IoT contract term, based on the current three-year average for Ambition’s delivery partners.
The court documents stated Ambition was told the “Institute would be at risk of being unable to continue trading and the Defendant’s investment would be lost unless it provided additional financial support, and in such a scenario the Claimant’s wider relationship with the Defendant would be jeopardised”.
Ambition’s lawyers argue it is “extremely likely that the contractor” would be able to achieve greater volume given Institute’s ‘unique and special position’. They have a dedicated marketing team, and Ambition scored 5 out of 5 for question on ‘delivering programmes at scale’.
Even if they achieved 50 per cent of proposed ITT volume, the Institute would not suffer a deficit, the claim states.
Charity also says DfE got bid scores wrong
Ambition also claims DfE made an error in its scores for the bids. Ambition scored 70.08 per cent on quality, compared to 59.92 for SLDT. But Ambition says this should be 71.3 per cent.
Ambition wants the contract award overturned and handed to itself “on the basis that it submitted the most economically advantageous tender”.
If not, Ambition believes it is “entitled to damages for the wasted costs of preparing its tender” totalling £750,000.
Work on the bid covered 12 months, with three months of negotiations following the contract award in February.
The court fees will cost Ambition £10,500, documents state.
Schools Week understands the department it still working towards the IoT launching in time for the new school year. They are confident of a “robust” procurement process and that they have a strong case.
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