A mega-college in Nottingham has been placed in formal FE Commissioner intervention after hitting “serious cashflow pressures”.
The Education and Skills Funding Agency published a financial notice to improve for Nottingham College on Wednesday.
The ESFA letter, dated July 2020, states that there is a “need for cashflow support in November/December 2020” and there was an agreement that an independent business review (IBR) was required in order to consider the ongoing viability of the college’s finances.
A spokesperson for Nottingham College said they discovered over the summer that they were “likely to experience financial difficulties largely as a direct consequence of the coronavirus pandemic”.
“Our cashflow position was particularly exposed, not least because of adverse pressure on key income streams, including higher education income, apprenticeship and other adult income and the short-term collapse of key markets including the hospitality and tourism sectors,” they added.
“We agreed to an IBR to confirm the need for financial support.”
The spokesperson told FE Week the college has not required any emergency funding to date but anticipate a “package of support” over the coming months to “ensure the long-term financial stability of the college”.
Nottingham College, which has around 16,000 learners, was created from a merger of New College Nottingham and Central College Nottingham in 2017. It has been through a tough couple of years that saw lengthy staff strikes, votes of no confidence in the leadership, and a grade three Ofsted report.
Last month the college completed a major £58.5 million build – funded in part by a £3.2 million loan from the Department for Education’s transaction unit. Plans are in motion to sell four of its properties to help balance the books.
The college’s 2018/19 accounts show a £6 million deficit.
The FE Commissioner has now intervened at the college to assess its “capability and capacity to make the required changes and improvements”.
The college has been told to prepare a financial recovery and quality improvement plan, which explores “further staff savings” for 2020/21 and 2021/22.