KEEPING THE cashflow going and headhunting top-class staff should be the priorities for anyone wanting to rescue a college in crisis, a workshop session at the Association of College Management conference was told.
John Rockett, principal of Rotherham College, drew on his experience of rescuing the college. In the financial year 1995-96, it was running a Pounds 3.2 million deficit on an annual turnover of around Pounds 10m - including a bank loan of Pounds 1m in cash. The payroll was 105 per cent of the college's income, he said.
This led to large-scale redundancies in a management team overloaded with "burnt-out local education authority managers". Mr Rockett arrived at the college in mid-1996 to find that the bank was considering foreclosing on its loan and the administration was reduced to the clerk and the caretaker.
This created difficulties, but also an opportunity. Mr Rockett was able to hand-pick his senior management: "I found six key national experts, targeted them and harvested them. People make the organisation. You have to find them, and let them loose in order to do the jobs you have chosen them to do."
Tom Johnson, executive director of the college, said one important appointment had been a City of London banker as director of finance: "She knew how to deal with bankers."
This, combined with the support of the local authority, the training and enterprise council, trade unions and other local institutions, helped to persuade the bank to reschedule the outstanding loan.
Mr Rockett pointed out that the hand-picked managers had to be prepared to accept risks: "There was a very high risk. If the college had gone down, what would their career prospects have been then?" He identified cash flow and the right senior staff as the key issues in a list of 20 - others included reducing the staffing budget, reviewing the curriculum offering, starting a major marketing campaign, refurbishing estates, creating a high-quality information infrastructure and visiting secondary school heads to restore confidence.
He said: "The answer is that they all have to be addressed. But you have to make some money to keep going and you have to recruit the right people. The other issues will pan out as you work on them."
He said that the initial strategy was explained in a quotation from management guru Aaron Wildavsky: "Promise a lot - deliver a little. Teach people to believe they will be much better off, but let there be no dramatic improvements. Avoid any attempted solution remotely comparable in size to the dimensions of the problem you're trying to solve." But Mr Rockett emphasised: "You don't sell it to people in those terms."
Now the college has expanded and moved into the black, it is moving away from dependence on the Further Education Funding Council: "Around 30 per cent of our income is now non-FEFC."
The college has achieved spectacular growth in European Union funding, up from Pounds 84,000 in 1996-7 to Pounds 1.2m in the current academic year, with bids in for Pounds 2.5m next year.