Analysis: where did it all go wrong for Scottish digital skills academy CodeClan?

It set out promising to “allow Scotland’s vibrant digital sector to flourish and drive the economy” – but having just abruptly collapsed, leaving staff, students, and the broader tech sector dumbfounded, where did it all go wrong for CodeClan?

The flagship digital skills academy notes on its website that it kicked things off in 2015, opening its first campus at Edinburgh’s CodeBase, and welcoming its inaugural class of professional software development students, looking to produce a steady pipeline of graduates.

But its website now leads with the statement that caused shockwaves at the end of last week, announcing that the organisation – a jewel in the crown of Scotland’s tech sector and backed by the Scottish Government – had gone under, and was already beyond the point of rescuing. “It is with extremely heavy hearts that we announce that CodeClan has gone into liquidation and will cease all operations as of 4 August 2023. Sadly, that means all our [57] staff have been made redundant,” it says.

There has been much understandable gnashing of teeth in response, with Polly Purvis, who was pivotal in getting the organisation off the ground, saying on LinkedIn that she was “devastated” to hear of its liquidation. “My thoughts go out to all the staff and students on this very sad day.”

Among those affected are 34-year-old CodeClan student Stuart Ure, who said he signed up after having “moved from one low-paid, low-skilled job to the next, unfulfilled and knowing I was capable of more”.

He explained that enrolling in a software-development course felt like a “new lease of life”, having ploughed his entire savings of £7,000 into undertaking the 16-week bootcamp, and after needing to take a break he completed five weeks of this before the plug was pulled. “I felt numb, and then absolutely furious,” he said of his reaction to the news. “Not only for me, but all seven other immersive cohorts that [were] ongoing.”

Ure has now set up a JustGiving page to try and raise £50,000 – with more than £20,000 promised so far – to help instructors come back and help finish the bootcamp, and secure a workspace to learn in person. “It was a real community feel – and we don’t want to lose that,” he said.

Business model

As for how CodeClan ended up in this situation, several arrows point to a tightening of purse strings by its corporate partners. One source said that to keep the fees for students low (it “charged less than it cost to run”) it relied on hiring fees from companies signing up its students and also from corporate training income. “Both of those had almost completely disappeared over the last six months as companies tightened their belts due to the economic situation,” they added.

CodeClan in fact said in March that almost 90 per cent of its students could not afford a place without the support of industry partners (including Skyscanner, FanDuel, and Baillie Gifford), with this model credited with helping it place more than 2,000 students into tech roles with some 300 companies. However, many tech giants have instead been laying off rather than hiring.

The digital skills academy in June of this year said in a Companies House filing that projected revenue was being hampered by firms pushing back their training plans due to a strong pool of candidates. The skills academy however said it had “more than adequate resources to continue as a going concern for the foreseeable future”, complementing this painting of a rosy picture with many positive announcements in recent months, including a tie-up to deliver on demand, self-paced digital courses, helping those needing to fit training around, say, childcare.

Sources told The Scotsman they feel CodeClan was tackling societal issues as well as helping fill the much-publicised skills gap. “It’s a tragedy, really,” one said regarding the ramifications of its collapse. Laura Bosworth, chief executive of Worket – Inclusive Search and Consulting, told The Scotsman that CodeClan “made it accessible and achievable for people of all backgrounds and levels of experience to develop skills in a sector that can feel pretty exclusive and scary.”

Contender

She added: “It was another piece of the puzzle when it comes to upskilling and ensuring that Scotland has the skills and knowledge to be a real contender on the global stage. I personally know a number of people that have found the CodeClan experience to be pivotal in helping them into their next career, so I knew it worked.”

CodeClan, which had also expanded into Glasgow and Inverness, but had quietly shuttered the latter operation in 2021 to reduce overheads, was a product of the Scottish Government’s well-expressed desire to help push the digital agenda and tackle the skills gap. Now, questions have been raised by various parties about whether it should have stepped in to save the organisation, having bankrolled its creation.

Ceri Shaw, latterly chief product officer at CodeClan, told The Scotsman that most staff were shocked at the news of its closure – “many had believed there was no way the Scottish Government would let us fail due to how important we were to the tech ecosystem”.

A Scottish Government spokesperson said: “CodeClan has for many years played a valuable role in Scotland’s tech scene, and [its closure] is deeply regrettable. The Scottish Government and Scottish Enterprise worked intensively with CodeClan, including employing independent financial consultants, to explore every possible option to help the organisation secure a sustainable future.”

“Skills Development Scotland is already making arrangements to support staff during this extremely difficult time. We are also working closely with the liquidator and other interested parties to develop solutions for impacted students.”

Still, the crisis has bought out benevolence, including by Bosworth, who has offered to help CodeClan's redundant staff or recent graduates. “They will be an asset to organisations looking at how they can bring some of that CodeClan ethos of upskilling and evolved ways of learning.”