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FE commissioner criticises colleges for poor financial health

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Two colleges have been warned that their futures as independent institutions could be under threat unless they take urgent action.

The latest reports published by the FE Commissioner focus on Knowsley Community College on Merseyside and Redcar and Cleveland College in North Yorkshire.

Knowsley was issued with a Skills Funding Agency notice of concern for inadequate financial health in June 2014, and an additional schedule for failing to meet minimum standards in apprenticeships in March of this year.

Success rates for apprenticeships were just 40.5 per cent in 2013-14, which the report blames on poor systems, the overzealous recruitment practices of the college’s sales team and high levels of withdrawals prior to completion.

Student numbers have plummeted by 37 per cent since 2010-11 and the college’s financial health has declined, leading to major staffing restructures, although a significant improvement is forecast for 2014-15.

Although the report says that there are many positive aspects to the college’s recent performance, it also warns that the institution faces a very difficult situation and “has a long way to go to match what would be considered to be an average level of efficiency”.

“High staff costs and levels of pay, very small class sizes, large numbers of support staff in some areas and high levels of subcontracting all present risks and challenges that still need to be met,” the report concludes.

“Apprenticeship performance still requires significant improvement and decisive action will be necessary, and quickly, if the college wishes to remain as an independent institution in the medium to long term.”

In his recommendations FE commissioner David Collins says the college should explore partnership arrangements with neighbouring organisations and bring staff salaries in line with what is offered elsewhere in the sector.

Meanwhile, Redcar and Cleveland College was issued with a financial notice of concern in March this year after a decline in its financial position, which was partly the result of a significant decline in learner numbers.

The report criticises the college’s board, which it says until recently was “largely ineffective” and was described by one member as a “tea and biscuits” operation.

It says the college faces a number of very difficult financial challenges over the next few years, and adds: “Unless there is a dramatic rise in numbers in September, it is unlikely that the college will be able to survive as an independent institution.”

The report recommends that the college urgently completes a “robust, realistic and costed” curriculum plan and refreshes its board. It warns that the college could face administered status.

Dr Collins will review the progress of both colleges in October.

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