The government is looking to procure £9 million worth of services to support the new insolvency regime for colleges.
According to procurement documents published yesterday, the Department for Education is seeking the services of restructuring professionals to conduct independent business reviews (IBRs), and the services of licensed insolvency practitioners (IP) to provide what it calls “supplementary activity”.
In the case that an IBR recommends that an education provider should enter an insolvency process, the government may require the services of licensed insolvency practitioners, who can be appointed as education administrators, according to the tender document.
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'Cost-effective restructuring solutions'
The estimated value of the contracts, it states, is £9 million excluding VAT, and the duration is 24 months.
The new insolvency regime came into force only a fortnight ago. The government’s response to the consultation on the new regime for colleges, published last June, estimated that over the next 10 years, 63 colleges could be given a notice to improve for their financial health, in addition to the 37 subject to a notice at that time.
Due to the change in legislation and the implementation of the new insolvency regime, says the tender document, the DfE is “adopting a standard practice of commissioning an IBR of FE colleges when necessary”.
“The IBR would look at the financial, educational and estates position of the college and would set this in the context of local and/or regional market and economic conditions to consider cost-effective restructuring solutions,” it adds.
A new infrastructure regime was needed to allow "financially distressed education providers" to be assessed and, if necessary, managed through insolvency, the tender adds.