FE Commissioner intervention report exposes financial turmoil at Hull College Group

FE Commissioner intervention report exposes financial turmoil at Hull College Group

A new FE Commissioner intervention report has exposed the grave financial problems facing Hull College Group.

Commissioner Richard Atkins’ (pictured) team was sent in to carry out their assessment, after the Skills Funding Agency issued it with a notice of concern in November last year.

The report, however, only emerged on gov.uk this evening.

It comes after FE Week reported a week ago that the Department for Education was remaining tight-lipped about the cause of the apparent hold on reports, as none had been published since October.

The report on Hull explained that the notice was issued because the college had been rated inadequate by the agency for financial health (based on its 2016 to 2018 financial plan) and as a result of the college’s request for exceptional financial support.

It warned that the senior leadership team had not succeeded in addressing key issues facing the college, including steady decline in financial performance and loss of market share.

There was said to be concern at all levels of the organisation that it “lacks strategic vision and strong, resolute leadership and that this is frustrating and demotivating for staff”.

The section on the college’s financial position warned that “its operating performance, as measured by ‘surplus/deficit after interest, tax, depreciation and amortisation costs’ has amounted to a cumulative deficit of around £10 million over the past four years, and a further deficit in excess of £1 million is forecast for the current year.

“The college has not achieved its budgeted income for any of the last three years.”

It concluded that a “substantial amount of work needs to be done” to secure a sustained financial recovery.

Commenting on the relationship with the board, it said: “Governors do not appear to have been advised on a timely basis, that falling student numbers have not simply caused by adverse demographic trends, but are also the result of loss of market share.”

Concern was also expressed about slow reaction to the many problems faced by the college.

“There is criticism from the corporation and staff that ‘bad news’ is not reported to the corporation with sufficient speed or candour, thus slowing down the ability to take the rigorous actions required to ensure sustainable financial recovery,” the report said.

It also raised concern about staff costs.

“Despite a number of years of staff cuts, on the SFA’s definition, the college’s staff costs are high, at around 78 per cent of income for 2015/16 and a forecast 72 per cent for 2016/17 (as a comparator, the area review benchmark is 60 to 65 per cent),” the report said.

“This level of cost is unaffordable.”

There has been a long-running dispute between the college and the University and College Union, as the college has tried to force through redundancies.

UCU members at the college had been set to walk out on October 13 over planned job losses.

But the union announced the day before that it had suspended the industrial action after “positive talks”.

This followed the college’s announcement that it would make around 70 redundancies and close its three nurseries before the end of the year, to address a £2.6 million deficit.

Since 2011, the college has seen more than 380 job losses through redundancy, according to the UCU.

FE Week reported last week that a stop appeared to have been put on publication of FE commissioner intervention reports.

The previous intervention report, into City of Liverpool College, had been published in October, although the document itself was dated August 2016.

FE Week believes that up to 18 colleges should have been subject to intervention by the FE commissioner and his team since then.

But when we asked about the missing reports, the Department for Education was unable to give any reason for the hold-up, and would only say at the time that these would be available in due course.