One of England’s smallest colleges has been handed £1.5 million in emergency funding while it explores a potential merger.
Newbury College was placed in government intervention last year following receipt of a funding advance from the Department for Education to cover a “cashflow gap” caused by delayed proceeds from a property sale and its burdensome PFI contract.
It entered into a formal emergency funding agreement with the DfE in December to allow for the outstanding “advance of funding” sums to be repaid and to cover its costs in the short term.
The FE Commissioner’s office is facilitating a structure and prospects appraisal (SPA) to evaluate whether merging with another further education partner is necessary.
A conclusion is expected in May.
Newbury’s recently published 2024-25 accounts explained that “ahead of this decision”, the college “prepared forecasts to July 2027 which shows that, with the emergency funding support agreed with the DfE and the receipt of the delayed land sale proceeds, the college will hold sufficient funds to operate and pay its liabilities as they fall due until July 2027”.
The college is one of England’s smallest, with total income of £15 million in 2024-25. It employs 310 people, and enrolled 1,076 learners aged 16 to 18, alongside 373 apprentices and 2,197 adults last year.
Accounts also reported a deficit of £1.6 million for 2024-25, compared to a deficit of £1.5 million the year before.
Newbury is one of only a few FE colleges to operate under a PFI (private finance initiative) agreement. The contracts, greatly expanded under New Labour, saw private firms build and operate public sector infrastructure and facilities, with above-inflation repayments scheduled over many years.
The college entered into its PFI contract in 2002 and has since been crippled by “very high” repayments costs. This contract is due to end in 2027, at which point Newbury will own its building.
Around eight acres of land were sold in September 2023 for the development of a “mixed-use” facility to be known as Mayfield Point, as part of its “strategic plan to ensure the college’s financial health”.
The first capital payment was received that month, the second was in February 2025 and the remaining payments are due in three tranches over the next three years. Accounts reveal the timeline was extended due to “logistical and contractual difficulties”.
Principal Lee Probert said: “We are committed to securing a sound and sustainable future for Newbury College and continue to be focused on delivering excellence and developing skills for our communities providing ‘careers, not courses’.”
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