The Education and Skills Funding Agency has handed a financial health notice to improve to Macclesfield College.
It follows an assessment of the college by the FE Commissioner in November and the Education and Skills Funding Agency (ESFA) grading the college’s financial health as ‘inadequate’.
The notice, dated 14 January, instructed Macclesfield College to prepare a draft financial recovery plan to be shared with the ESFA by today (Friday 15 February).
The final plan, including a strategy for managing the college’s reliance on subcontracted delivery and actions to implement savings, must be submitted to the ESFA by 8 March.
The college also has to submit monthly management accounts for the ESFA to review on the 25th of each month and the agency may observe governor meetings until it is satisfied there is sufficient oversight of the financial position.
Further action could be taken, the ESFA has warned, if “the college fails to take the necessary actions, in whole or part, within the timescales set out, or if evidence of progress is not appropriate or not available”.
The college principal, Rachel Kay, said: “The college has had a strong financial record over the past three years, and has been graded officially ‘good by Ofsted, as stated in their inspection report in November 2017.
“Like many other colleges, the demographic decline in 16-18 year-olds has impacted on the enrolment numbers over the past two years.
“The college has worked hard to make efficiencies and to continue on its academic journey to be an ‘outstanding’ college.
“The college’s financial health is forecast to be ‘good’ at the end of this academic year and moving forward into 2019/20 and beyond.”
To have the notice lifted, the college must improve, financially, from the ‘inadequate’ rating in 2017/18 (calculated by scoring its profitability, solvency and total debt as a percentage of reserves and debt) to ‘satisfactory’.
The college must maintain a ‘satisfactory’ rating through 2018/19, up to 2019/20.
And even then, the ESFA will look at whether, beyond 2019/20, there is a significant risk of decline in the college’s financial health.
- Easton & Otley College has been placed in administered status today by the ESFA, following its second grade 4 Ofsted report in a row.