Ofsted criticises ‘financial mismanagement’ at college preparing to join with university

Ofsted criticises 'financial mismanagement' at college preparing to join with university

Governors have been criticised for being slow to recognise “financial mismanagement” at Lambeth College, in new report unveiled by Oftsed.

The grade three across the board report, published by the inspectorate today, recognised that “clearer and firmer arrangements” had recently been put in place to ensure governors’ “oversight of the college’s corporate functions”.

But it warned: “In the last academic year, governors were slow to recognise key indicators of financial mismanagement at the college.”

A spokesperson for the provider, which had over 6,000 learners at the time of the inspection, told FE Week today: “The governors and senior managers accept the findings of the Ofsted inspection and are pleased to have had the opportunity to demonstrate that errors made in the past are not being repeated in the present.”

The report comes three days after Lambeth announced it was pushing ahead with plans to join forces with London South Bank University.

“Following the recommendations of the government area review of post-16 education for central London, Lambeth College is delighted with the decision…to join the London South Bank University family in principle and subject to the development of a full business case,” a spokesperson said.

Minutes from a meeting of the college corporation held in July indicated problems.

“The 2015/16 deficit forecast brought to the board on March 10, 2016, had been at £500k, but had now gone up to £5.6 million,” it said.

FE Week subsequently asked the Department for Education if the Skills Funding Agency had bailed out the college.

A spokesperson for the agency said in response that “exceptional financial support” had been provided.

The LSBU family consists of the university, UTC and academy, together with a company called South Bank University Enterprises Ltd.

The college, which was allocated just over £11m from the adult education budget for 2016/17 as of September, said joining the group would offer it operational stability, while also helping to build clear learning pathways for students.

FE Week asked a spokesperson if the move would mean Lambeth would no longer be an independent corporation.

She said in response: “The exact structure of the college within the LSBU family is not yet decided upon.”

Mary McCormack, chair of governors, said: “We are confident this exciting and innovative partnership will broaden and increase the opportunities for Lambeth College students to progress from FE into higher level apprenticeships, higher education and employment.”

Professor David Phoenix, vice-chancellor at LSBU, added: “Post-16 education is a critical part of the fabric of our society and employers are calling for a more highly educated and skilled workforce.

“Welcoming Lambeth College into this exciting and innovative model with the LSBU family is an excellent opportunity to enhance the provision of FE across south London.”

It comes after FE Week reported in November that Lewisham Southwark College, which last year became the first college ever to receive two ‘inadequate’ ratings from Ofsted in a row, had explored a number of what it called “potential options” to improve in the wake of the London (central) area review, according to a spokesperson.

Options under consideration included separate mergers with two nearby institutions: London South Bank University and Lambeth College.

Both options were deemed unviable by the bosses at Lewisham. The college said at the time it was instead revisiting its “preferred” proposal – of merging with Newcastle College Group, based in the north-east of England.