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Picking up the cost of failure

The tangled finances of a closed college have come back to haunt the body which killed it off, writes Harvey McGavin.

THE DECISION to close Bilston Community College could end up costing the Further Education Funding Council tens of millions of pounds, a TES investigation has revealed.

Figures compiled by a former senior manager at the college estimate the true cost of closing Bilston to be as high as pound;65m - five times what the college was said to owe when it closed.

The Midlands college closed its doors in April last year on the recommendation of an FEFC inquiry team, led by its former chief inspector Terry Melia.

The team, called in after the college received the worst inspection report in FE history, proposed a merger with nearby Wulfrun College, which went ahead in October, forming the Wolverhampton College.

The report concluded that Bilston had "insurmountable debts" of more than pound;10m.

That figure is disputed by Paul Goddard-Patel, former finance director of the college, who says more than half of this figure relates to courses being ruled ineligible for funding.

"But most of the work had been passed as eligible for funding by auditors working for the college," he said.

In addition, Mr Goddard-Patel says the college was overpaid by more than pound;11m on its main revenue allocation because it only met a fraction of its projected targets in its final year.

It will also have to repay pound;4m in grants from bodies other than the FEFC for work which it was unable to carry out.

Redundancy costs add up to nearly pound;8m. The college laid off 350 of its 700 staff. Only nine of the 58 senior management positions at the new college have been filled by former Bilston staff.

The FEFC's rules guarantee that a college will receive at least 90 per cent of its previous year's funding.

This applied to Bilston, despite a fall in stdent numbers, which led to a disproportionate average level of funding of pound;55 per unit - the building block of college funding. This has been carried forward into the finances of the new merged institution and will add pound;29.8m to the college's running costs over the next five years.

Other rationalisation and merger costs amount to an estimated pound;750,000 while the auditors' bill, as previously revealed in The TES, was pound;1.1m.

"The enormous costs of the Bilston closure raise a number of serious questions," Mr Goddard-Patel said.

"Was the closure of the college, at a huge cost, the best option available to the FEFC?

"In an area of educational deprivation, is this really the best way to spend pound;65m of public money?"

In a separate pamphlet published last week, the Friends of Bilston Community College said the FEFC "engineered" debts and audits and inquiries were "biased".

The Friends dispute allegations of mismanagement.

The pamphlet, titled "Who Killed Bilston Community College", says the college was "one of the best and most effective practitioners of open access, equal opportunities and community education" but was run down by successive years of underfunding.Eventually, the Friends claim, it was destroyed by the FEFC's opposition to its style of education.

The Friends calculate that, between 19934 and 19967, Bilston received pound;7.2m less than it would have done if it had been funded at the average level for the sector.

If the high proportion of Bilston's students who were funded at the lower demand-led element had been funded at the average level over the same period, the college would have been pound;27.2m better-off.

The pamphlet is the first in a series which, the Friends say, will "demonstrate that the real reason for the destruction and closure of the college was opposition to its equal opportunities policies".

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