The private company that has a multi-million pound contract to run education in Walsall is to be hit by around 100 job losses, it can be revealed today.

Walsall Children’s Services, part of Serco Group, has undergone a government inspection that revealed it is only meeting its minimum requirements.

The organisation, which employs around 400 people in Walsall in non-teaching jobs, is now facing tough questions into its ability to turn around educational standards in the borough.

Posts are to be axed due to the re-negotiation of the contract between Serco and Walsall Council, which is looking to reduce the cost by £7.5m over three years.

An Ofsted report which looked into the service, based at the Education Development Centre, in Pelsall Road, Rushall, branded it ‘adequate’, saying standards needed to be raised in the borough’s schools as only half of primaries and a third of secondaries were officially rated as good or better.

It comes just days after Walsall came 151st out of 171 local authorities for GSCEs and A-levels. The organisation was awarded a £345m deal to run education services in the borough for 12 years in July 2008.

But Councillor Mike Bird, the leader of Walsall Council, said he was not satisfied with its performance.

“If they cannot improve themselves, how can they improve education in Walsall?” said Councillor Bird.

“The standard of education is still far, far short of what we want it to be. The issue needs to be taken into account more strongly. I’ve been told 100 jobs are now at risk. I keep saying this — I can’t believe Serco are doing a good job,” he said.

Graham Talbot, interim managing director, said a reduction in workforce was “likely” but could not confirm numbers. “Discussions will be held with the council and staff,” he said.