The FE Commissioner has warned Redcar and Cleveland College that its “very risky” growth strategy has got just a few months to pay off before its future independence becomes “unlikely”.
Dr David Collins (pictured above left), whose May visit was triggered by the Skills Funding Agency (SFA) assessing the grade three-rated college as inadequate for financial health, has already ordered a structure and prospects appraisal (SPA) while it pursues a “strategy around growing income — both funding body and commercial income — supported by an improved Ofsted grade in autumn 2015.”
He warned that without a “dramatic rise in numbers in September” it was “unlikely the college will be able to survive as an independent institution” — and so he would return in October to see if the college needed to be put into administered status.
Acting principal John Chance (pictured above centre) declined to comment on the FE Commissioner’s report, which was published yesterday (Monday).
However, Dr Collins recognised in his report on 3,800-learner Redcar and Cleveland, which was allocated £6.8m from the SFA as of April, that it had “improved the quantity and quality of management reporting in the last nine months” and was “working towards devolving accountability and increasing the understanding of managers and directors”.
But he warned that it “faces a number of very difficult financial challenges over the next few years”.
“The college is pursuing a growth strategy to achieve financial stability which is very risky given recent past performance, demographic decline and the lack of tangible contracts to support commercial growth,” the report said.
It added that the college should not progress “certain recommendations” made by Ofsted, through latest support and challenge arrangements, until the SPA had been completed.
Ofsted had recommended, according to the FE Commissioner’s report, that the college should “confirm and secure senior leadership arrangements immediately” and “confirm over-all strategic direction including collaboration or merger with other institutions” by September.
An Ofsted spokesperson said: “Ofsted has acknowledged the FE Commissioner’s visit and plan for an SPA. There is no conflict.”
Skills Minister Nick Boles said: “Given the severity of the challenges facing the college, I have agreed that the FE Commissioner should undertake an SPA to consider whether there are better arrangements available to meet the needs of learners and employers in a more efficient and effective way.
“I have also agreed that he should review the progress of the college in October to assess whether it remains viable or whether other options, such as administered college status, should be adopted immediately.”
The report came out the same day as an FE commissioner report on Knowsley Community College, in Merseyside, said it should “begin to explore partnership arrangements with neighbouring organisations”.
Dr Collins was sent in three months ago to inspect the college, which received a good Ofsted rating in May 2013 and was allocated £6.4m by the SFA as of April, after it was assessed as inadequate for financial health by the SFA.
His report recognised “many positive aspects in the college’s recent performance” including, for example, good board involvement and clerking, experienced senior managers, and positive teaching and support staff. But it said that the 5,200-learner college faced “a very difficult situation”.
“At a time of falling numbers, government cuts and increased competition, it has a long way to go to match what would be considered to be an average level of efficiency,” it said, adding: “If enrolments in September fall below plan, the college should conduct its own SPA”.
Mr Boles said: “The college is facing falling numbers, reduced levels of funding, increased competition and staff costs which are exceptionally high compared to sector norms. All these factors present significant risks and challenges that the college needs to address quickly and decisively.
“Taking account of this, I would urge the college to begin to explore partnership arrangements with neighbouring organisations to ensure that it delivers a high quality learning offer that meets the needs of learners and employers.”
Knowsley principal Anne Pryer (pictured above right) said: “The commissioner’s visit provided an opportunity for the board and the senior team to review progress against a broad range of issues that we have been dealing with over the past 12 months. The college has significantly improved the quality of apprenticeship delivery and addressed a number of the commissioner’s recommendations.
“We are currently working in partnership with St Helens College to develop a Logistics Academy through the Liverpool City Region local enterprise partnership. The partnership provides both colleges with an opportunity to address a major skills for growth priority for the region.”
FE Commissioner reports round-up
Dr Collins called for the first-time principal of a Suffolk College to be mentored in her new chief executive role as he praised her “determination and flair” in efforts to deliver a financial turnaround.
He acknowledged the “tireless” work of Jo Pretty, whose interim principal appointment a year ago became permanent in May, had boosted the “case for a college-led recovery” at Lowestoft College after he had been sent in five months ago due to a financial notice of concern issued by the SFA in December.
And his report added: “The interim principal is dealing with a number of complex financial, quality and staffing issues, and given her short experience in some aspects of these roles, professional mentoring and advice should be a key part of the board’s support for the principal in undertaking her chief executive role over the next year.”
Dr Collins criticised “weak” financial management at the 4,000-learner college, allocated around £4.2m by the SFA as of April, over the previous three years in light of three consecutive annual operating deficits.
He added that “well intentioned” governors had acted “precipitously before full consultation with other members of the board and on at least one occasion without full board approval” over key financial and strategic decisions.
He also called for a review of the “strategic decision to buy the Lound campus [situated around five miles from Lowestoft]”.
However, Dr Collins concluded that the “new management team” led by principal Ms Pretty [click here for her expert piece on college efforts to turn the college around], who took over as interim from Simon Summers a year ago, was “inspiring staff to deliver”.
A letter to the college from Skills Funding Agency chief executive Peter Lauener, relating to the commissioner’s findings, said: “The college is beginning to taking the necessary steps to address the issues which have led to the financial and quality difficulties of the college, and I am encouraged to read about the determined approach of the new interim principal.”
Ms Pretty said: “When I found myself in my new role as principal my direction was clear — I had to stabilise a £15m income college while moving it forward in terms of quality.
“The challenges faced at the college were quality, short term liquidity, caused by an over stretch in capital works, poor financial planning and control.”
She added: “The college has undergone substantial restructuring resulting in significant cost savings to date, with around £1.4m of savings to be realised next year, we now have robust control over college expenditure.”
It was one of four FE Commissioner reports released on June 19 covering New College Nottingham, as previously reported by FE Week, Darlington College and Wandsworth Borough Council.
In April Dr Collins was sent to 5,000-learner Darlington College, which was allocated around £6.8m by the SFA as of April, after its Ofsted rating slumped from outstanding six years ago to inadequate across-the-board in March. However, his report acknowledged the college also had “significant financial issues that it needs to address” having lost a key Ministry of Defence contract in 2011/12.
“Its total projected income for 2014/15 is two thirds of what it was in 2011/12,” the report said.
He called for a “full review” of the governing board and recommended student attendance and punctuality should be “more rigorously reinforced”. He also said more “consistent tracking measures” to “monitor student performance” were needed.
Mr Boles praised the “renewed energy Darlington College has taken to identify the necessary improvements following the Ofsted inspection”.
“However, considerable further work is required to restore the college’s position as ‘outstanding’ and to improve the level of efficiency to sector norms,” he said.
Kate Roe, principal of Darlington College, said: “We have already made significant progress with changes and improvements since the FE Commissioner’s visit and many of his specific recommendations in the report are already very much in hand.”
The FE Commissioner’s team in February also inspected Wandsworth Borough Council’s Lifelong Learning Service (WLLL), which was allocated around £3.7m by the SFA as of April, after it fell from a grade two Ofsted rating in April 2010 to inadequate in January, when it had around 3,100 learners.
The commissioner’s report criticised the council’s development plan for the service for having “too great a focus on participation and little on quality or impact”.
It called for a review of the “strategic decision to accelerate apprenticeship growth through sub-contractors operating outside of London”.
A council spokesperson said: “The council has set up a special working group, including representatives from the opposition group, which is conducting a detailed review of the service.”
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