An East London council has given out a £2m loan to “help safeguard” the future of its local college.
Newham Council cabinet approved the cash for Newham College of Further Education, which it said had been put in an “extremely difficult position” by government cuts.
The college described the council’s support, agreed at a meeting on Thursday, November 20, as “invaluable”. The loan will be repayable over two years at an unspecified “commercial” rate.
Newham councillor Lester Hudson, cabinet member for finance, regeneration and planning, said: “Newham College has been placed in an extremely difficult situation by Government cuts to its funding, which has seen almost £5m cut from its budget.”
He added: “As a council we want to ensure that changes to funding for FE do not harm our education establishments and that they can continue to meet the needs of the borough’s young people.
“This is why the council’s cabinet approved a loan of £2m to help safeguard the college’s future.”
He said the loan would “ensure the college can aid in the skills development of the borough’s young people and adults, as well as supporting the council’s aim to provide tailored programmes to help people into work”.
Around 60 per cent of the college’s 20,750 students are Newham residents.
Principal Di Gowland said: “The council’s support is invaluable given the level of cuts throughout the FE sector and the impact these will have on the Newham community.”
The loan proposal was initially put to a full council meeting on September 29 as part of the Mid-Year Review of the 2014/15 Budget and Overall Financial Position. A ruling was then delegated to the cabinet.
Ms Gowland said: “The borough has one of the most diverse populations in the country and the wide range of education and training offered by Newham College is giving our residents the skills they need to boost the borough’s economy.
“This short term loan will ensure we are positively engaged in developing and delivering the training needed to support the local skills and employment agenda.”
An Association of Colleges (AoC) spokesperson said: “There have been many loans, grants and in-kind contributions from councils to colleges over the last 20 years, which reflects their joint work in meeting community need and fostering local economic growth.”
However, she said AoC was unable to give specific examples of such agreements and could not offer advice on seeking local authority loans.