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College facing £6m deficit plans to cut jobs

A London college has announced plans to cut staff costs in a bid to save £1.5 million a year

KCC is predicting a £6 million deficit and plans to cut teaching and management jobs

Campaigners have hit out at plans by a London college to save £1.5 million through what they call “brutal restructuring plans” in a “crisis" they say is threatening its survival.

Board minutes from Kensington and Chelsea College (KCC) show that the college has had to revise its forecast deficit for this year – from £4.4 million to £6 million.

The Save Wornington College Campaign (SWC) is asking for immediate intervention to stop the plans, with a spokesperson saying staff and the local community were “frustrated at having to fight continually to safeguard this vital institution”, close to the site of the Grenfell Tower disaster.

“This college must be saved as reparation for Grenfell,” said the spokesperson, adding that the “eyes of the North Kensington community are watching what happens at Wornington”, and a failure by the government to deliver on the future of the college would "provoke further anger”.  

More news: College interim leader earned £143,000 for seven months' work

Read more: College apologises for 'shameful' £28m campus sale

Background: Kensington and Chelsea College reveals merger plan

Forecast deficit

The board minutes for a meeting held in March said: “Following detailed analysis by the new vice-principal (finance), the forecast deficit to 31 July 2019 now stood at £6 million: £1.6 million greater than the previous forecast figure (excluding exceptional items)”. This, the minutes said, was the “consequence of lower than planned direct delivery student numbers”.

This is not the first time the college has hit the headlines this year. In February, it was revealed interim principal Elaine McMahon, who ran a college for a period during which a proposed merger was called off, had earned £143,000 for seven months of work. Had she stayed a year, her pay would have been £245,142. That makes her one of the highest paid principals in the country in this period, despite being at a small college with an income of just £8.59 million in 2017-18.

Ms McMahon took up the helm at the college at a time of significant uncertainty. At the time, the college was involved in merger talks with neighbouring Ealing, Hammersmith and West London College. However, the merger was called off in January 2018 following a diagnostic assessment by FE commissioner Richard Atkins, who was called in by skills minister Anne Milton following concerns expressed by the local community in the wake of the Grenfell Tower disaster. These focused on the effect of the proposed merger on provision at the college’s Wornington Road site in North Kensington. At the time, the college reported an underlying operating deficit of around £3 million. 

'Under severe strain'

In March, it was announced KCC was working towards a merger with Morley College. The plans would lead to the colleges joining together as Morley College London, with three main centres in North Kensington, Chelsea and Waterloo. The proposed merger is designed to secure and improve the Wornington Road North Kensington Centre after years of uncertainty about its future while maintaining and developing provision at college centres in Chelsea and Waterloo.

A spokesman for the college group said today that current pay expenditure was “significantly above the sector average at 88 per cent of all income", and "the college’s income is under severe strain due to the prevailing under-performance against its planned direct delivery, both in respect of its 16-19 allocation and in particular its [adult education budget] allocation”.

At its meeting in April, the board had given the chief executive a “clear mandate to deliver ‘significant savings’ through the development and delivery of a framework that seeks to bring both pay and non-pay costs closer to the sector norms, in particular to reduce the pay costs as a percentage of college’s income derived from direct delivery”, said the spokesman. 

Significant improvement

He explained the board wished to see a significant improvement on the £4 million-plus deficit budget set in July 2018 for the coming year 2019-20, stressing that as part of its oversight responsibilities, the Education and Skills Funding Agency also required a recovery plan to return the college to a balanced budget within three years.

“Management proposals launched last week are aimed at bringing pay costs closer to the sector average whilst protecting provision at both its sites. With the exception of two small curriculum areas generating income of less than £75,000, it is proposed to retain all provision at existing income levels."

Savings of £1.46 million were being targeted, he said, “the largest element being secured through reductions to executive, management and consultancy expenditure. Direct savings in the teaching budget of around £500,000 were proposed, equating to around eight full-time positions.

“Cash reserves, as of 31st July 2019, are projected to be circa £7.4 million. However, with the introduction of the new college insolvency regime, the college is acting now to best ensure it is financially viable into the future,” the spokesperson added.

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