Financial mismanagement and substandard teaching provision are often co-symptomatic. Enhanced financial transparency will help address financial mismanagement among poor-performing colleges, as well as improve educational experiences and outcomes, says Lawrence Barton.

Barely a week goes by without news of yet another further education college navigating its way into financial difficulty, either through mismanagement or impropriety. It really is time for concerted action to prevent it, for the good of the sector.

Less than a fortnight ago saw the conclusion of FE Week’s own year-long Freedom of Information (FOI) battle with Highbury College. The findings shed light on the lavish chauffeur-driven lifestyle of its principal, Stella Mbubaegbu, and the splashing of college funds on first-class flights, five-star hotels and lobster dinners – all at a time of salary freezes, job cuts and plummeting Ofsted ratings for the college.

Last Wednesday offered news of the latest rescue bid to save the ailing City College Southampton, which has been limping from one taxpayer-funded bailout to another.

The next day, the government revealed that it is “carefully monitoring” an independent investigation into allegations regarding the management of Hull College Group, including reports of nepotism and inappropriate use of college funds by management staff. It has subsequently been revealed that this “independent” investigation is to be led by the college’s own lawyer.

This culture of financial mismanagement and aversion to public accountability is unsustainable. Not only is it unfair on the thousands of learners who pass through the college system every year, but it also paints an unfair picture of the college system as a whole. Despite the multitude of negative stories, the bulk of our country’s FE colleges are in good financial health and offer quality teaching to their students. Reform is needed to address the minority of colleges who let the rest of the sector down.

The Department for Education’s pledge that there is to be an end to the long-term bailouts available to colleges is a much-needed step. Hadlow College represented a watershed moment for the sector. For too long, the attitude of further education colleges being “too big to fail” only fostered an attitude of financial irresponsibility among some college chiefs, safe in the knowledge that further funding was just a phone call away.

The expansion of education minister Lord Agnew’s brief to include financial oversight of colleges and his commitment to improve college governance structures is also needed. Similarly, proposals for financial ratings reports to form part of Ofsted’s inspection remit will help to identify the financial health of all providers. But the department needs to go further.

Financial mismanagement and substandard teaching provision are often co-symptomatic

Financial mismanagement and substandard teaching provision are often co-symptomatic. Beyond their weak financial health, a common thread linking Hull, Southampton City and Highbury colleges is their poor teaching standards. It is not just the public purse that suffers; students and communities are being let down too, with knock-on effects on long-term prosperity.

The unwillingness of colleges such as Highbury to disclose senior management spending is unacceptable. Action is needed.

Just as enhanced transparency of MPs’ spending in the wake of the 2009 Westminster expenses scandal has done much to restrict irresponsible spending and restore public confidence, the college sector needs an equivalent.

The Department for Education should mandate the automatic public disclosure online of all senior management spending above a given threshold for colleges in receipt of significant public funding who have an Ofsted rating below that of “good”.

This enhanced transparency and improved public oversight would do much to deliver a culture shift among poorly performing colleges and their management. Incentivising college leaders to show greater financial discipline will increase the likelihood of financial wrongdoing being spotted sooner.

Such a culture change within the sector will benefit taxpayers for sure, but it must be driven by more than financial probity to capture broad support. There is a strong case to be made for the betterment of learners’ education and the sustainability of the skills industry as a whole.