College suspends principal just two months before merger

A college being forced into a merger after an audit revealed a £5.35 million over-claim has now suspended its long-serving principal.

FE Week has seen an email to Ruskin College staff saying its principal of nine years, Paul Di Felice, has been removed.

And a college spokesperson today confirmed he had been “suspended from his post pending investigation”.

The college added it was “unable to provide further comment on this matter at this time”.

Former interim principal for Hadlow College, Graham Morley, has been recruited to lead the college during the investigation, ahead of its merger with major college group Activate Learning at the end of July.

Ruskin’s heavily delayed 2018/19 accounts have been filed with the Charity Commission 311 days late.

They reveal the college is not operating as a going concern and there are “inadequate resources to continue in operational existence for the foreseeable future.”

The Education and Skills Funding Agency is clawing back £5.35 million, the accounts state, including £1.5 million for that year, £1.85 million for 2017-18, and £1.98 million for 2016-17.

The clawback follows an audit which found overclaims for adult education budget and residential bursary funding. England’s three other adult residential colleges have been stung by a similar audit which alleges they have misapplied an uplift that has been in place since the 1990s.

The Ruskin accounts stated they had “consistently applied the same methodology over many years, so was unaware of the need to align to a different scenario”.

Ruskin College has also sold off one of its bases of operations, the listed Stoke House, in March 2021 – using the proceeds to settle a debt with the Co-operative Bank after it committed a breach of its covenants. This breach had meant the college owed a £2.3 million loan within a year, but this has been paid off in full.

The accounts say “critical issues” including the clawback and a “significant” fall in HE learners from 214 in 2017/18 to 161 in 2018/19 “have significantly and adversely impacted on the overall financial and solvency position of the college and the outlook is challenging”.

However, the ESFA and the college are in “continuing discussions” about its financial position, and the provider believes “a solution to the cash shortfall prior to the merger will be found” – leaving the door open to a government bailout.

The college hopes Morley can shepherd them through the merger, with the all-staff email, from Paul Di Felice’s personal assistant, reading: “Graham is a very experienced individual who has extensive experience in college oversight and management, and I’ve assured him that you will give him your support whilst he is with us.”

Morley took over Hadlow and its sister provider West Kent and Ashford College in February 2019, after the departure of former principal Paul Hannan and ahead of the colleges being the first to go into education administration.

Previously, he was interim principal at Ealing, Hammersmith and West London College, and principal of Cannock Chase Technical College and South Staffordshire College.

FE Week understands the investigation into Di Felice is being led by Evan Williams, the Association of College’s former director of employment and professional services, who now works as a governance and industrial relations consultant.

This management shake-up is another blow to the Ofsted grade two Ruskin, which has been subject to a financial notice to improve since 2014.

The notice was reissued in November 2020 and the Department for Education placed the college in supervised status following a report by then-FE Commissioner Richard Atkins, published in October, which said the provider faced an “uncertain future”.

The Oxford-based college, originally founded in 1899, currently focuses on adult learners and its offer includes Access to HE diplomas, English for speakers of other languages courses, and trade union courses accredited by the TUC.

It has historic links to its city’s famous university and is itself renowned for educating working class people, especially those in the trade union movement.

As of July 2020, the FE Commissioner reported, enrolments were just over 50 per cent less than in 2018/19.

A structure and prospects appraisal was ordered in the wake of the report, which is what led to the merger with Activate Learning being announced in February.

Paul Di Felice has been approached for comment.