Second college merger postponed due to Covid-19

A merger involving a college that previously warned it was dependent upon the move for survival has been delayed by a year due to the coronavirus pandemic.

Southampton City College is now set to join Itchen Sixth Form College in August 2021, having scheduled the move for this summer.

It is the second college merger to be delayed because of Covid-19 this month.

As previously reported by FE Week, Southampton City is currently keeping afloat on government bailouts.

It received around £2.5 million in emergency funding last year and the college’s 2018-19 accounts warned that cash would run out by October.

It also stated that if a merger attempt failed, then the college would “require additional financial assistance” to stay open.

Sarah Stannard, principal at Southampton City College, claimed the college’s financial position this academic year is now “secure” and said the Department for Education is providing financial support.

However, she refused to say whether the DfE has stumped up any new bailout funding this year to keep the college running as a standalone until next summer.

Stannard would only say that the college is reassured by the department making it “very clear that colleges are essential community institutions” when looking ahead to 2020-21.

She added: “Covid-19 has had a small negative impact on our income but we can manage this.”

A Department for Education spokesperson would also not say whether it has given the college any new emergency funding but said: “We continue to work closely with City College Southampton and other key stakeholders to achieve a sustainable solution for further education in the city.”

The college’s 2018-19 accounts were signed off on a “non-going concern” basis and stated the “current intention and most likely outcome” would be for a merger on August 1, 2020, whereupon the college would “dissolve after the transfer of trade, assets and liabilities at carrying value to another FE organisation”.

Stannard said that Southampton City and Itchen College are committed to merging but have had to prioritise responding to the outbreak and are likely to have to organise continued changes to the teaching and training of students and apprentices this autumn.

“Both colleges believe it’s appropriate that they focus on delivering the best student experience possible at this difficult time and give themselves time to prepare an effective and high-quality merger in the summer of 2021,” she added.

The move would affect more than 6,000 students and a consultation is due to start at least four months before the merger.

Alex Scott, principal at Itchen College, told FE Week: “Itchen College continues to work with City College in preparing a merger proposal, although the current pandemic has understandably had an impact on timescales as we have switched to supporting our learners remotely.

“We are working towards a provisional date of August 2021, but will move more quickly should the proposal be agreed and circumstances allow.”

Stannard added Richard Taunton Sixth Form, another college in Southampton, could also join the merger at a later date.

The FE Commissioner has been assisting with the merger after conducting a local provision area review last summer.

Southampton City College was re-issued with a financial health notice to improve by the ESFA in February, which it first received in 2016, while its financial health was rated as ‘inadequate’.

The college generated an income of £13 million and a deficit of £1.65 million in 2018- 19 – a significant increase from £585,000 in the previous financial year and £257,000 the year before that.

In addition, it lost an agreed £500,000 overdraft after Santander withdrew the facility in August 2019 when loan covenants were breached.

Southampton City College has had two other merger attempts with different partners fail.

The first proposal, with Southampton Solent University, fell through in 2018, while a plan to join Eastleigh College collapsed at the 11th hour in March 2019 after an application for emergency funding was rejected by the ESFA.

The other college merger to be delayed this month because of coronavirus involved Cheadle and Marple Sixth Form College and Trafford College Group. They had planned to join up by August but have now pushed this date back to October 31.