Credit Crunch Hits The IT Training Sector Because Of Absurd Legislation

The tidal wave of the ineptitude caused by the incompetent world of banking has come crashing into the IT training industry with potentially catastrophic effects.

The cost of training has continued to rise, so a substantial number of people hoping to join the industry need assistance with funding. Over the last few years, the primary lending sources providing funding within the training sector have been offering loans to about 20 percent to 25 percent of the students who apply.

Recently, more stringent credit checking has raised the bar. Greater numbers of eager learners are being turned away, as the pendulum of sub-prime lending inevitably starts to swing the other way. Banks have become more cautious, and judge many trainees who are out to better themselves as too high a risk!

But the story has taken a new turn in the run-up to Christmas, due to one of the rules of the Financial Services Act. You may be aware of this rule when using your credit card to purchase goods - the loan company is liable for a refund on faulty goods bought with credit if the purchaser is unable to get compensation from the company who sold the goods. An understandable and worthy protection for the hapless consumer.

But consumer protection has become a double-edged sword in this time of economic downturn. The kicker to this rather clumsy legislation is that if a training company folds, it's the banks responsibility to complete the training. Obviously they can't do this, so would have to refund the money should the training provider get into trouble. Therefore, without any regard to how efficiently an IT training company is currently operating, the banks have decided to withdraw funding facilities to a huge number of their potential students just in case the company goes bust in the difficult times ahead. The removal of finance can only create more challenges for IT training companies, and probably be the very cause of some IT training companies going down that otherwise would have survived.

So much for Gordon Brown's pressure on our bailed-out banks to support small businesses! At the most critical time in the financial history of our country, when we need to trade our way out of the problem, how can it possibly be a good idea to dramatically reduce the number of students training for a career in IT? Could it be that the powers that be have forgotten just how vital computers are to almost every business in the United Kingdom

(C) 2009 LearningLolly