North Hertfordshire College has been placed in administered college status by the skills minister, following a report by FE commissioner Richard Atkins.
The report also calls on the college to “review the structure and mission of the college and consider divesting themselves of non-core business elements”. “This would result in a smaller GFE college with integrated apprenticeships serving its locality and could result in management savings,” the report, published today, states.
It explains that the college has “suffered a financial crisis, culminating in a request for [Exceptional Financial Support (EFS)] that was made in August 2018”. “The corporation has run out of cash and is projected to need £4.6 million of support.”
However, it does stress that “the college can repay this EFS and other debts, carry out some redevelopment and have some working capital if it concludes a land sale. This deal has not been concluded and there are risks that could materialise. However, current indications are that the deal is likely to be concluded and that a tranche of cash will be available to the college in December 2019.”
Quality of provision
While the commissioner goes on to say that college leaders and managers have failed to scrutinise sufficiently the quality of provision delivered by subcontractors and have “presided over a decline in overall and timely achievements of subcontracted apprenticeships”, there are now “good processes in place for monitoring and evaluation and a more rigorous curriculum plan is emerging”.
“The apprenticeship operation is now concentrating on direct delivery and is closer to the heart of the college. This should result in a more integrated and well-planned approach in the future, capitalising on good relationships with some major clients. The current chief executive is trusted and respected by staff and is capable leading recovery.“
The report also calls for the college’s board and the chair to “reassure themselves that the principal and key members of the senior management team (SMT) are able to lead the college to financial recovery by closely monitoring and challenging them. They should also review the [senior management team’s] role in the recent corporate failure which resulted in the need for EFS.
'Appetite for risk'
“Historically, the board has displayed an unacceptable appetite for risk, resulting in corporate failure and this approach must cease. The use of public money demands measured responses from the board based on accurate and well-analysed officer information,” says the report.
Skills minister Anne Milton said it was “clear from the commissioner’s report that for a number of years the college had a history of poor forecasting alongside a culture of pursuing significant ambitious growth that failed to materialise”.
“This declining financial performance resulted in a request for Exceptional Financial Support from government. The commissioner has made a number of recommendations including that the college review’s its structure and mission and consider divesting themselves of non-core business elements. The college should also put in place a ‘plan B’ should the land sale fail to proceed as planned. Given the significant challenges now facing the college, I am placing the college in administered college status with immediate effect.”
Notice to improve
The college was brought into scope for referral to the FE commissioner when it was issued a Notice to Improve (NTI) by the Education and Skills Funding Agency last October.
This set out additional conditions of funding that North Hertfordshire College is required to comply with in order to continue to receive ESFA funding.
The letter said the college had been assessed as having inadequate financial health by the ESFA, based on the financial plan 2017-18 to 2019-20 and the college had requested Exceptional Financial Support (EFS).
'Improvements in quality'
A spokesperson for the college said: "Over the last three years, we have improved the overall quality of provision and outcomes for our students. We are really proud that this was recognised by Ofsted who judged us to be a good college with outstanding provision for learners with high needs and traineeships.
"These improvements have however required considerable investment. Like others in the sector we have faced difficult market conditions including a more challenging than anticipated apprenticeship landscape following the introduction of the apprenticeship levy."
The spokesperson added a robust recovery plan was now in place and the college had taken a number of actions to strengthen its financial position, including making substantial cost savings and "exiting from non-core activities".
"We are now looking forwards, and putting teaching and learning at the heart of our mission. Despite the financial challenges we have an immensely positive, supportive culture at North Hertfordshire College with everyone from the governors and leadership team down doing their very best for our students, the communities we serve and the businesses we work with."