Foundation shakes merger process

10th March 2000 at 00:00
The fate of a charity set up by defunct Bilston is causing confusion. Ngaio Crequer reports

A LEGAL and financial wrangle over the dissolution of Bilston Community College has embarrassed the funding council, perplexed the Department for Education and Employment and led to an investigation by the Charity Commissioners.

Bilston was formally closed last September and was merged with Wulfrun to create Wolverhampton College. Its assets and liabilities were assigned either to the Further Education Funding Council or the new college. But it seems nothing was done about the Bilston Community College Foundation, which as a charitable trust is exempt from the dissolution order. It now languishes while various bodies fight over it.

The foundation's main income came from franchising work in education and training it undertook under contract from the college.

But other funds include donations from staff members of the former college, who established standing orders to help impoverished students. Estimates of how much is in the account vary up to pound;80,000.

Now the funding council has written to the DFEE for advice on what should happen to the foundation. There are at least seven known subsidiaries. Three are insolvent and creditors have approached both Wolverhampton College and the funding council for money.

Belatedly the funding council has discovered that "it was not satisfied that the terms of the order transferred the assets and liabilities of Bilston Community College Foundation or its subsidiary companies to the council".

It roposes that the DFEE asks the Department for Trade and Industry to liquidate the companies, or that the department confirms the foundation's interests have gone to the FEFC, or the dissolution order is extended.

But there is confusion about who the trustees are, whether they have met, their present address, and where their accounts are held.

Moreover, those who donated money believing it would help students in need are appalled at the idea that the funding council can simply take over "their" money.

Sim Wignall, a former clerk to the corporation said: "I am a trustee, I have never resigned. I have the chequebook, which I should not have. No one knows what is happening."

A funding council spokesman said there was no embarrassment. At the time the dissolution order was made the legal situation was clear. "We have simply written to the department to ensure the situation is clarified. We have had informal talks with the Charity Commissioners and eventually it will be a matter for them."

Meanwhile the funding council, concerned about college malpractice, and conscious of Government pressure to halt it, has established a special investigations unit.

Pauline Tilly, FEFC chief auditor, has been appointed head of an "inquiry and review" team to investigate allegations of mismanagement or irregularities over funding claims.

It will cover all issues involving governance which might allow the Secretary of State to intervene in a college's affairs. It will also recommend good practice, particularly in financial areas.

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