St Helens College handed financial health warning

St Helens College has been served a financial health notice to improve by the Education and Skills Funding Agency.

The notice was handed after the college was assessed as having ‘inadequate’ financial health in 2017/18.

St Helens College’s accounts for 2017/18 show it generated a surplus of £8.8 million, with a total income of £43 million, a total expenditure of £34 million, and long-term debts of £10 million.

In December 2017, St Helens College merged with Knowsley College, to form SK College Group and had to shoulder a number of costs, including £3.8 million in loans that needed to be repaid and £1.5 million of staff restructuring costs, according to the accounts.

Before the merger in June 2017, St Helens was rated as ‘requires improvement’ overall by Ofsted, but ‘inadequate’ for apprenticeships.

It was found making ‘reasonable progress’ in a monitoring report published in November 2018.

As a result of the ESFA notice, the college had to prepare a draft financial recovery by 31 May, for review by the agency, and has to submit a final plan to secure the college’s financial position by 30 June.

College leaders will have to attend regular meetings with the ESFA, submit monthly management accounts to the agency, and allow its representatives to sit in on governor meetings.

The notice also means St Helens will come into scope for intervention by the FE Commissioner, and it has already been subject to a diagnostic assessment in January and March.

The terms of the notice to improve could be varied, depending on what the commissioner’s report says.

The ESFA will lift the notice when the college’s financial health grade has improved from ‘inadequate’ in 2017/18 to a sustained position assessed as being ‘requires improvement’.

A spokesperson for SK College Group said: “SK College Group, like many other further education colleges across the country, is facing continued financial challenges.

“This has never been more so than following our recent merger.”

They explained the merger process was “complex and lengthy”, which impacted upon its completion timescale.

This delay had made planned adjustments “more difficult to achieve”, the spokesperson said.