A college was bailed out twice in December, to the tune of £1.5 million each time, FE Week has learned.
Figures revealing the amount of exceptional financial support dished out to Bradford College – which is currently in FE commissioner intervention – were published accidentally by the Department for Education last week.
No reason is given for the bailouts, and the college didn’t provide one when asked for a comment – nor has it published its 2016/17 financial statements.
The grade three-rated college was hit with a financial notice to improve in November, after requesting an unspecified amount of EFS.
The FE commissioner was then sent in to carry out an assessment of the college’s “capability and capacity to make the required changes and improvements”, and shortly after it was announced that its chief executive, Andy Welsh, would be stepping down at the end of the academic year.
But, according to its website, Chris Jones – a former adviser to the FE commissioner – was appointed interim chief executive in January to focus on “student experience, the college’s strategic recovery plan and financial sustainability”.
Bradford’s finance director, Chris Malish, is also new, having replaced former post-holder David Hambleton in August last year.
Minutes from a meeting of the college corporation in July reveal little sign of the trouble to come; the college had self-assessed its financial health as ‘satisfactory’.
But the college’s 2015/16 accounts revealed it had £43 million in bank loans taken out to fund a number of capital projects, and concerns were raised that it would be in breach of covenant on one of these by the end of 2017/18.
And accounts for the college-sponsored Bradford College Education Trust show it to have had an operating deficit of almost £1.3 million in 2016/17, although the college is in the process of withdrawing its sponsorship of the trust.
Bradford College, which had a turnover of £53.3 million in 2015/16, slipped from ‘good’ to ‘requires improvement’ in November last year. It emerged from the west Yorkshire area review, which completed in June 2016, with a plan to remain standalone.
But, according to last November’s financial notice to improve, one possible outcome of the FE commissioner’s involvement is a structure and prospects appraisal, which could see the college paired with another.
A spokesperson for the college told FE Week it had been “working closely with the ESFA and the FE commissioner to formulate a robust financial recovery plan”.
“As that work is ongoing, we will not be making any further comment at this time,” they added.
EFS is only available to colleges that are “encountering financial, or cash-flow, difficulties that put the continuation of provision at risk”, and which have “exhausted all other options”, according to ESFA policy. Any request leads to an automatic ‘inadequate’ financial health rating and a referral to the FE commissioner.
It’s set to be phased out with the introduction of the new FE insolvency regime later this year, proposals for which are currently under consultation.
The accidental publication of the EFS figures – which were quickly retracted – comes amid growing concerns over transparency, as a number of colleges have received multimillion-pound bailouts from the restructuring facility.
“The department does not normally publish information relating to EFS to ensure the college’s financial position can be managed effectively during the period of support,” a DfE spokesperson said. “Where appropriate, EFS is declared in colleges’ accounts.”