West Kent and Ashford College (WKAC) has become the second college to be placed in education administration.
At the High Court this morning, insolvency and companies court judge Sally Barber approved a petition brought by the Department for Education. This means that WKAC is the second college to go through the insolvency regime, which was created by the Technical and Further Education Act 2017.
It follows Hadlow College – part of the Hadlow College Group alongside WKAC – which entered administration in May this year. Both colleges were issued with financial health notices to improve by the Education and Skills Funding Agency in the same month.
WKAC will have the same administrators as Hadlow College, BDO LLP.
FE commissioner: 'High risk' of college insolvency, warns FE commissioner
Yesterday, WKAC revealed that it had asked the government to take the necessary steps in order to secure the long-term future of further education for the communities it serves.
In July, further education commissioner Richard Atkins recommended that East Kent College Group should take on WKAC’s provision and facilities in Ashford, and North Kent College take on its provision and facilities in Tonbridge.
In March, the FE commissioner told Tes that there was a “high risk” of a college insolvency within 12 months.
The court heard that at WKAC £1.6 million in loans was overdue by three months, and that on the 31 May 2019, the net liability of the college was £17.5 million. It also heard that in 10 out of the 13 weeks between 29 July and 27 October, the college had insufficient cash reserves.
Giving her ruling, the judge said that the college had cleared the insolvency threshold.
She said: "Learner protection is a highly significant factor, and it is at the forefront of the minds of those who put forward the proposals. This is the best option for the college as matters stand."
"As education administrators, in each case, our priority is to maintain the stability of the college and to minimise disruption for existing students. At WKAC, we will be examining the recommendations made by the FE commissioner in order to implement a sustainable solution for the college and its students while also considering the best outcome for creditors," BDO told Tes.
A DfE spokesperson said yesterday: “Following a request from West Kent and Ashford College, we have applied to the court to place the college in education administration. This is now a matter for the court. This process is designed to specifically ensure that learners’ interests are protected and continue their studies with minimal disruption.”
Today, the DfE added: “Following a request from West Kent and Ashford College, the college has today been placed into education administration. The ESFA will continue to work closely with the administrators and with West Kent and Ashford College to minimise disruption to staff and students, and to deliver a longer-term solution to protect the provision of further education in Kent.”