More than 100 colleges in England are being monitored due to concerns about their finances, according to Skills Funding Agency chief executive Peter Lauener.
Mr Lauener told yesterday's Public Accounts Committee hearing on financial sustainability in FE that 41 colleges were undergoing a formal financial intervention, while another "60 or 70" were being "looked at closely to try and help them prevent themselves [from worsening] financially”.
By the end of 2013/14, 29 out of 244 colleges had an inadequate rating for financial health. Mr Lauener told the committee that this dropped to 24 colleges in 2014-15. In March 2015, a checklist was compiled by FE commissioner Dr David Collins of ‘warning signs’ in FE institutions that could trigger an intervention.
He added that while some colleges had “deep-seated problems" that could necessitate a lengthy intervention, in other cases a "quite quick turnaround" was possible. "It’s not a single problem," he added.
Last month, TES reported that a briefing compiled by the Association of Colleges revealed that colleges owed £1.6 billion in long-term loans. It added that colleges reported an overall operating deficit of about £60 million in 2014-15, about 1 per cent of their total income. This was the second consecutive year in which the sector as a whole was in deficit.