South Devon College has been placed under government intervention after securing emergency cash from the Department for Education.
The college announced it received a financial notice to improve, which has not yet been published, triggered by its request for short-term cashflow support.
Chief executive Laurence Frewin told staff the FE Commissioner would scrutinise its financial plans during a college visit on July 10, which include cutting up to 65 jobs as part of a £2.75 million savings target.
He added emergency funding – understood to be a £1.5 million loan over two years – was needed to cover the “cost of the restructure” and to ensure the college had “sufficient cash in the bank”.
Reclassification into the public sector in 2022 means the college can no longer access “traditional forms of public borrowing” from banks, the CEO explained.
Under the two-year intervention, South Devon College will agree an improvement plan with the commissioner, which could include measures such as a merger with another college, sale of property, curriculum changes or further staff restructuring.
The commissioner is also likely to publish a summary report outlining the issues the college faces, and its recommendations.
South Devon College joins a group of five other colleges under financial intervention measures including Warwickshire College Group and SMB College Group.
Financial record
In the past five years South Devon College has consistently scored ‘requires improvement’ under the DfE’s financial health rating and ended the last financial year with an operating deficit of £793,000 on an overall income of £36 million. The college has outstanding loans of £8 million from three lenders, including Torbay Council.
Frewin said it was operating in an “increasingly challenging financial and competitive environment” resulting in “difficult decisions”.
“We welcome the additional oversight and support from the DfE and FE Commissioner’s team as we implement our recovery plan,” he added.
“With this in place, we remain fully focused on delivering for our students, communities and employer partners.”
A ‘tough year’
The college announced a round of up to 65 redundancies in April in a bid to secure its “long term financial stability”.
It said the staff cuts decision came after a period of “rigorous financial planning and review” earlier this year.
This week, Frewin paid tribute to staff directly after an “incredibly tough year”, adding: “Throughout everything please remember we are a college with excellent quality teaching and learning, a strong reputation for being innovative, we are resilient and we are on the front foot with our plans”.
‘Rich curriculum’
The college has about 6,575 students of various ages at its four main campuses, which include a specialist automotive engineering centre, marine academy, university centre and high school for 200 pupils aged 14 to 16.
In 2024 Ofsted inspectors rated the college ‘good’ in overall effectiveness and said it provided a “calm and exceptionally purposeful environment” with a “rich curriculum”.
According to its accountability statement, 70 per cent of its students live in the Torbay area, which includes seaside towns Torquay and Paighton, with the remainder in the more rural Teignbridge and South Hams districts.
The Torbay council area has a population of about 136,000 people, nearly half of whom are aged 50 or over, with only about eight per cent of residents aged 16 to 24.
It “suffers from several issues common to coastal towns” including a low-wage, low-skill economy that is “over-reliant on seasonal tourism and is now “one of the weakest in the country”, the college said.
I think the college are trying to do too much. Instead of focusing on it’s core post 16 further education, it tried to be a university, a 14-16 hub for those struggling in school, sports academy, ect.