The administrator’s report on West Kent and Ashford College has been published today.
In August 2019, the institution became the second college to be placed in “education administration” under the insolvency regime created by the Technical and Further Education Act 2017.
The move came three months after Hadlow College entered administration. Both Hadlow College and West Kent and Ashford College are part of the Hadlow College Group.
West Kent and Ashford College was appointed the same administrators as Hadlow College, chartered accountants BDO LLP.
Background: West Kent and Ashford College to go into administration
College finances: ‘High risk’ of college insolvency, warns FE commissioner
Quick read: Hadlow College placed into education administration
The new report lists £108,234,853 in liabilities - £87 million of which was in grant funding received from the Education and Skills Funding Agency (ESFA).
Salix Finance, which provides interest-free government loans to the public sector for improving energy efficiency, is owed £437,500, and £230,563 is owed to BAM Construction Limited.
College debts
The report estimates that the joint education administrators will be owed £756,977 in total remuneration. Hourly rates range from £320 for a partner to £127 for a senior associate. These rates, the report says, have been agreed with the Department for Education.
Value of college assets
West Kent and Ashford College’s Tonbridge campus has a “book value” (the value entered in the institution’s accounts) of £73.1 million but an “estimated to realise value” of £21.3 million. At the time of the administrators’ appointment, the college owed £13.2 million to Barclays Bank for loans in relation to the campus.
The Ashford campus has a book value of £21.2 million, but an estimated to realise value of £7.6 million. There are two outstanding fixed charges on the campus: £2 million to Barclays Bank and £1.1 million to Ashford Borough Council.
The Wooten Road campus has a book value of £1.3 million, and the land and property at Court Lane have a book value of £4 million. Together they have an estimated to realise value of £1.6 million.
Claims owed
The report states that, to date, the administrators have received 64 unsecured claims totalling £4.9 million. No claims have yet been adjudicated on, and they recommend that creditors who believe they have a claim submit a debt form providing a detailed account of the sum owed.
Formal proposals
The administrators propose that they continue to manage the business, affairs and property of the college to achieve the objective of the education administration by either:
- Rescuing the further education body as a going concern.
- Transferring some or all of its undertaking to an another body.
- Keeping it going until existing students have completed their studies.
- Making arrangements for existing students to complete their studies at another institution.
The report says: “Due to the significant levels of liabilities the college has, it is unlikely the college could be rescued as a going concern.”
At the beginning of January, it was revealed in a report by the administrators that the Ashford site will be transferred to East Kent Colleges Group on 31 March and the West Kent Tonbridge campus will be transferred to North Kent College on the same date.
A statement from administrators BDO said: “As joint education administrators of West Kent and Ashford College, we have maintained the stability of the college and minimised disruption for existing students as a whole. The steps taken to date are in accordance with our legal duties as education administrators are documented in the latest creditors report, including the progression made in regards to the proposed merger transactions, which will ultimately determine the likely outcome for unsecured creditors.”
