Leading college starts redundancy process after finding a shock £6m deficit

A high-profile college that uncovered a shock £6 million deficit when the finance director went on sick leave has put 26 jobs at risk and says it is considering an application for emergency funding.

Gateshead College has remained tight-lipped on how the shortfall came about. However, it has confirmed a new interim finance director was appointed last month and that the principal Judith Doyle CBE retired with immediate effect.

Deputy principal Chris Toon has taken over as acting principal of the grade one college.

“These proposals will help us address some short-term financial pressures”

He announced a redundancy consultation is underway today.

“Currently 26 posts are at risk, mainly from business support areas, however no final decisions will be made until consultation concludes,” Toon said. “We have opened a voluntary severance scheme to mitigate as far as possible the number of compulsory redundancies.

“These proposals will help us address some short-term financial pressures the college is facing at the moment.”

A team of independent forensic accountants was drafted in after the unexpected deficit was found “to establish the explanation” and its investigation will be completed by the end of January.

A spokesperson for Gateshead College said: “We appointed a highly experienced interim financial director just before the Christmas break and he and the executive team, supported by governors, are working on the college’s recovery plan.

“This includes options for short-term funding loans and we are in close dialogue with the ESFA while we assess what is required.

“Our absolute focus is on retaining the highest standards of teaching and learning while addressing the current financial situation.”

It was previously confirmed that a new three-year financial plan, which is hoped to return the college to a surplus by 2020-2021, is to be delivered with the support of the ESFA and FE Commissioner.

The college declined to comment on the details of the deficit until the investigation is concluded. Governing board minutes do not offer any mention or explanation of the shortfall.

Gateshead recorded a surplus of £748,000 in 2017-18, according to its latest accounts. They add that the financial objectives for 2018-19 had included achieving a surplus of £535,000 and continuing to improve the college’s financial health score to reach ‘outstanding’.

In the latest minutes from the college’s audit committee, which met on June 19, 2019, a number of items, including the risk-management plan presented by the finance director, were withheld as confidential.

There were also confidential items in the most recent meetings of the board of governors on July 4, 2019, such as the draft budget for 2019-20 presented by the finance director, and on October 10, 2019, including the principal’s strategic update.

Judith Doyle

Judith Doyle retired with immediate effect on December 31.

The college said she had previously informed the board of her intention to retire at the end of this academic year.

A spokesperson for Gateshead said the decision to bring this forward was “hers, in the belief that it was in the college’s best interests to step aside now, enabling the new three-year plan to be delivered by the team with the support of the ESFA and FE Commissioner”.

Prior to this, Doyle was the highest-paid principal in the country, receiving a salary of between £340,001 and £350,000 in 2017-18.

The college’s financial statements for the year ended July 31, 2018 also showed six other key management staff were paid between £110,001 and £190,000.

Doyle spent 33 years in the FE sector and was appointed principal of Gateshead in 2013, having previously held the position of deputy principal. She was one of seven principals to be chosen by the FE Commissioner to advise government officials on skills policy in 2018.

Gateshead received an ‘outstanding’ grade from Ofsted following a full inspection in July 2015.