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Rescue squads to bail out colleges

Colleges in crisis will soon pay other institutions to send in trouble-shooting "rescue squads" of managers to get them back on course, further-education chiefs are predicting.

As increasing numbers of colleges face growing deficits and dire financial forecasts, FE leaders expect to see governors at some of those in most difficulty opting to fire their own top management and borrow experts from elsewhere, The TES has learned.

The concept would provide an escape route for struggling colleges from the worst-case scenario of closure - a last resort widely rumoured but still not yet seen in the FE sector.

It would also free those in difficulties from having to enter full-scale merger - often seen as a takeover - with a neighbour. Under the "rescue squad" principle, colleges could choose to pair up with successful institutions in an entirely different region of the country. The governing body would contract with the rescuing team to take over for a fixed period in return for a fee. The incoming managers would continue to head their own college while helping the partner get back on its feet.

The predictions were being made this week as Sir William Stubbs, out-going chief executive of the Further Education Funding Council, acknowledged that a college bankruptcy is nearer now than ever. He admitted: "Yes, there are colleges that could go bankrupt."

A struggling college would find a partner by putting the contract out to tender and setting down a price it was prepared to pay. It might buy in outside managers for a period of three to five years, during which it would build up confidence and develop a home-grown management team. The governing body of the weak institution, which would vanish in a full merger, would remain in place.

Sir William, who leaves the FEFC this week to become director of the London Institute, is understood to believe the rescue squad concept is an inevitable development.

He said: "The sector family providing from within it recovery skills for institutions in difficulties could well emerge. The goal of the national common good is driven by collective self-interest. It is in the interests of the sector to have colleges working as efficiently as possible."

One college in the FEFC's West Midlands region has come closest to putting the scheme into action. It has sought a partner institution specifically to help it out of difficulties.

The rescue squad scheme might also provide a model for some FE college links with higher education. While a full-scale legal merger between a college and university has yet to happen, colleges in trouble could potentially benefit from HE partners' skills and expertise.

If the concept of flying management catches on, it could lead to successful colleges becoming "centres of excellence" which supervise the recovery of a number of weaker institutions. They might even become "brand names", with a string of partner colleges following their distinctive style.

The FEFC believes that poor performance by colleges is largely down to managerial failings rather than external factors, despite complaints from both high and low-funded colleges that they are particularly badly hit by the formula for FE funding.

Sir William this week admitted he expected there to be no let-up in the Government-imposed cash squeeze on colleges.

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