A three-way merger is on the cards to help secure the long-term future of a college that has been surviving on government bailouts.
City College Southampton, Itchen Sixth Form College and Richard Taunton Sixth Form have all agreed the move would be a “positive” step following a local area review by the FE Commissioner.
It comes six months after City College Southampton saw its second proposed merger, on that occasion with Eastleigh College, collapse at the eleventh hour.
The situation threatened the solvency of City College, which received an unknown amount of exceptional financial support from the Department for Education in 2018/19 to enable it to “continue in operation in the short term”.
In a joint statement, Sarah Stannard, principal at City College, Alex Scott, principal at Itchen, and Dr Liz Lee, principal at Richard Taunton said they are at the “very early stages” of the merger even being an option and there is no timescale in place for this to happen.
Further details about the move, whether that is closer collaboration or a merger, are expected to be released by the FE Commissioner in the coming weeks.
“All three colleges are already working together to share best practice in areas such as student support and safeguarding, and we will obviously continue with this close working relationship going forward,” the statement said.
“It is widely agreed that a formal merger between the three colleges would be positive for students and the communities they serve.
“Nationally colleges have been encouraged to merge to be as financially efficient as possible and if this were to happen in Southampton it would be in line with the wider national agenda.”
A spokesperson for the Department for Education said details of the potential merger and publication of the FE Commissioner’s local area review will be published “in due course”.
The merger with Eastleigh College was so close to completion that City College Southampton principal, Sarah Stannard, had already announced plans to stand down.
But the plug was pulled in March after the government refused a request for an unknown amount of funds from the Restructuring Facility – a £726 million pot of cash that is used to support college mergers that closed in September.
City College Southampton’s accounts for 2017/18 warned that if this merger failed, it would “require a standalone application to be approved to ensure it is able to continue operations into 2019/20” and it would have to “seek additional long-term funding from the ESFA in order to remain in existence in the long-term”.
The DfE has made clear there will be no more long-term bailouts available to colleges following the introduction of the insolvency regime on January 31, which will allow colleges to go bust for the first time.
City College Southampton owes Santander over £6 million. A spokesperson for the bank told FE Week in March it would “remain supportive” despite the situation.
The college’s first merger attempt, with Southampton Solent University, fell through in 2017, after the move had been recommended in the Solent Area Review.
City College, which is rated ‘requires improvement’ by Ofsted, has seen its financial health deteriorate to ‘inadequate’ in recent years.
Its 2017/18 accounts show that its cash deficit deepened from £257,000 to £585,000. The college teaches around 5,000 students.
The joint statement from the principals at City College, Itchen and Richard Taunton said: “Whatever structure the colleges may take in the future, our number one focus remains to ensure that young people and adult learners in Southampton have the best possible further education provision and opportunities to learn the skills they need to be successful in their chosen careers.”