First notice of concern issued over ‘significant deficit’

A Kent college has become the first provider to get a government warning that could lead to the withdrawal of Skills Funding Agency cash, FE Week can reveal.

Financial worries were said to be behind an agency official notice of concern, issued to K College in August. The college was allocated £11.7m for the 2012/13 academic year

The notice of concern is the first step in a three-stage SFA risk management process, introduced following the government’s New Chances, New Challenges review.

It is issued to colleges that “fall below standards in relation to financial health, financial control, Ofsted judgment or minimum levels of performance”. SFA funding is withdrawn at stage three, although it is understood improvement measures have already been agreed.

An FE Week Freedom of Information request has revealed K College is the first and only provider to have been handed the official notice.

It comes as college staff plan industrial action in protest at proposals to axe almost 150 jobs.

The college is working with the SFA and bankers to agree a long term arrangement to establish financial security”

Principal Bill Fearon said: “The college deficit for 2011/12 is a significant factor in the SFA’s view.”

He refused to go into detail about the college’s financial situation, but conceded that the notice was justified.

“It’s fair and reasonable . . . we’re working with the SFA to resolve the situation,” he said.

“The SFA is looking to be supportive under the circumstances that we find ourselves in.”

In an e-mail to staff seen by the Folkestone Herald, Mr Fearon said accounts showed an “operating deficit (recurrent) of £11m”, which was “clearly substantial” and would involve “an increase in required savings in staffing and non-pay”.

A spokesperson from K college said: “There is going to be a budget deficit from last year, the second year of merger, of c £11m, and, through a development plan, we will return to a balanced budget within two years. The college is working with the SFA and bankers to agree a long term arrangement to establish financial security.”

Staff action was expected to take place on October 8, in a move backed by 93 per cent of University and College Union (UCU) members at the college. The UCU said more than 1,000 people were at risk of redundancy.

Adam Lincoln, UCU regional support official, said: “Strike action is never entered into lightly, but the overwhelming mandate from members at K College demonstrates how determined they are to fight these ill-conceived and unjustified proposals.

“Staff from all five sites will gather ahead of the afternoon governors’ meeting to make it absolutely clear that they oppose unnecessary job cuts, which would see 200 staff leaving the college in one calendar year.”

Nick Childs, National Union of Teachers regional officer, added: “Teachers enter the profession to help children and young people and are not prepared to stand aside as their education is put at risk by short-sighted and ill-conceived cutbacks.”

The threat of industrial action follows the loss of 50 jobs two months ago. In a letter to staff at five college campuses, Mr Fearon said the losses followed funding cuts and falling student numbers.

Bill Fearon, principal of K College. Picture courtesy of the Folkestone Herald